The Michigan legislature is racing to pass policies to manage the incoming increase to the state minimum wage and new mandatory paid sick leave. The state Supreme Court set a date for those changes to take effect this month.
In 2018, two ballot initiatives to increase the state minimum wage and implement mandatory sick leave received enough signatures to go on the ballot. The GOP-led state House adopted a pair of bills intended to meet the ballot initiative requirements, the state Supreme Court ruled that the changes were illegal and implemented new guidelines.
Tipped workers in the state make around $4 an hour, plus tips. Employers must make up the difference for workers if they don't bring home the minimum wage.
Under the new rules, that tipped wage will be slowly phased out, and by 2030 workers will make the minimum wage of around $15 an hour. Workers who earn tipped wages include servers, bartenders and other service industry workers.
Seante Watts, 23, is a server at the Molasses BBQ and Grill in Midland. He's been a server there for three years and has been working in the food and hospitality industry since he was 18. He said tips from customers keep him around.
“I definitely do make a lot more than I would if I was working a different job. That's kind of why I'm still here right now,” Watts said.
Watts says without the tip credit, which allows him to count tips toward minimum wage requirements, he might make less money than he does now.
“Tips may go down as well, because people would know that you're getting paid minimum wage or at least you know, the ten or whatever they're paying,” he said.
Watts is one of many servers concerned about the future of the tipped wage. The Michigan Restaurant and Lodging Association says that 79% of servers fear their jobs will be at-risk if the tipped wage goes away.
Lawmakers are looking to amend incoming changes to minimum wage and sick leave mandated by the state Supreme Court.
"It's going to be a huge pay cut for them because they're already making way more than minimum wage," said state Sen. John Damoose (R-Harbor Springs). He’s among many in Lansing advocating for a carveout that would protect tipped wages, arguing customers would tip servers less and workers would make less money.
Late last month, the state House passed a bipartisan bill package that would restore the tipped wage. State Sen. Mallory McMorrow (D-Royal Oak) says legislation has problems.
McMorrow says the state Senate has legislation that will protect the tip credit. "The restrictions they've made on paid sick leave in particular are really challenging,” she said.
Still, despite the differences, McMorrow supports the tipped credit. She says the state Senate has legislation that will protect it.
"It would bring the $15 minimum wage up a year earlier while also preserving the tip credit and capping the tip credit at 60%. So, giving service workers a raise while also ensuring they keep their tips because that's something that we've heard loud and clear,” McMorrow said.
In addition to the minimum wage change, business owners and activists are preparing for the changes are preparing for mandatory sick leave, which would require all businesses to provide paid sick days.
Business leaders recently met at a Traverse City resort for the annual Northern Michigan Policy Conference, statewide politicians attended.
Lori Lapp is the Director of Business Development for Axios HR, a Grand Rapids based HR consulting firm. She says businesses she's heard from want to provide sick leave, but the new rules would hurt small companies that already provide sick leave.
"If you have an in-home health care worker, they call in sick you need to provide another in home health care worker to cover for them while also paying this person on sick leave,” Lapp explained. “Where profit margins are very thin in some businesses, it's incredibly hard to follow the letter of the law the way that it's written.”
As for policy solutions, Lapp suggested paid time off should be included as meeting the requirements for the act.
Danielle Atkinson is with Mothering Justice, who are advocating for the minimum wage increase and paid sick leave requirement to be unchanged. She says that the policy can be implemented and is crucial to keeping workers and the public safe.
"There are several states that also have earned sick time laws, and the sky has not fallen once, and it's extremely important that workers have this protection,” Atkinson said. “It would be an adjustment, but it's extremely doable and it's so incredibly important…to public safety that we have people not feeling like they have to come in when they're sick or they won't be able to pay their rent.”
Atkinson says that the solution to the tipped wage issue should include a livable wage for all servers, with tips on top. She says it would help address wage theft.
“Everyone who goes to work and puts in a full day's work should have enough to make ends meet,” she said. “One fair wage is a guarantee that everyone makes minimum wage and then tips on top.”
The state Senate has begun its public hearings on the earned sick time minimum wage changes. The minimum wage and earned sick time changes are set to take effect Feb. 21.
