The Northern Michigan Chamber Alliance, a coalition of business leaders, are raising alarm about the upcoming changes to the state's minimum wage laws. They say the removal of the tip credit, which allows employers to count tip pay to minimum wage requirements, might drive workers away from small, hospitality-based businesses.
“Northern Michigan’s small businesses are disproportionately affected by the implementation of these changes,” said Nikki Devitt, chair of the Northern Michigan Chamber Alliance and president and CEO of the Petoskey Regional Chamber of Commerce in a press release. “Our small businesses, especially those in the hospitality industry, call on our legislators to take action to ensure these businesses can compete for talent and thrive in our regional economies.”
Earlier this year, a Michigan Supreme Court decision ruled that all employees would have to be paid the state minimum wage by 2030. This includes tipped workers; the change would phase out the lower minimum wage they make. The court's decision will likely boost the current $10.33 minimum wage to over $12 by early next year.
Haley Bennett is with the Northern Michigan Chamber Alliance. She said the change would decrease take home pay for some tipped workers and will drive away workers in industries like hospitality who make more than the minimum wage thanks to tips.
“Many people in the hospitality industry are currently making more than minimum wage,” Bennett said in an interview with WCMU. “Many make a very decent living, and are able to have flexibility around their hours, the amount they bring in. If they wanted to be minimum wage workers, they may not still want to be in this industry.”
Several worker's groups praised the court's decision earlier this year, saying it would help guarantee workers, especially ones that rely on tips, make a living wage. In light of existing support for raising the minimum wage, Bennet said the state legislature can still act to keep the tip credit in place.
"It's up to the legislature. They certainly could do that. You could maintain a tips credit and increase minimum wage. The two aren't mutually exclusive," she said.
Bennett also argued that small and seasonal businesses should be exempt from changes to sick time requirements. She argues that many of those businesses already have benefits in place, and the new changes are “difficult to navigate,” for companies with smaller resources.
“Focus on the employers that do not have current benefits. Set a minimum, a clear minimum threshold that employers can not only meet but exceed. Don’t punish businesses who already have systems in place.” she said.
The changes to the minimum wage are set to take effect February 21, 2025.
