As the current term draws to a close, state Rep. Timmy Beson today called for the Legislature to prioritize solutions for a Michigan Supreme Court ruling that will negatively impact local job providers, their employees, and consumers in Bay County and across the state.

The decision from the court in July raises the minimum wage and eventually eliminates the tip credit for servers, bartenders, and other workers who frequently make more with tips than they would through a higher minimum wage. In 2018, the Michigan Legislature took necessary action by adopting two citizen-initiated laws to ensure that a minimum wage increase and new paid sick leave rules worked for all Michiganders. Amendments to these laws struck a balance by fostering economic growth while protecting workers.

“Our small business sector employs more than 450,000 people statewide and circulates tens of billions of dollars annually. It’s a huge piece of our state and local economies,” Beson said. “They have been clear that this decision will force businesses to shut their doors, lay off workers, or hike prices to make ends meet. A wage increase and additional sick leave as part of a job doesn’t do any good if that job no longer exists.

“There will be several bills discussed over the next few weeks and certain issues will be prioritized. Our job providers and their hardworking employees, including in the service industry, need to be a priority before these changes are effective in February. We need a better way forward that understands all sides of this equation.”

A recent survey by the Michigan Restaurant and Lodging Association lays out the dire consequences of pressing forward with more extreme elements from the original proposal as mandated by the Supreme Court. More than 92% of restaurants said they will be forced to hike their prices, with many anticipating increases of 20-25% by early 2025. Sixty-six percent of restaurant owners said they would be forced to lay off employees, and 20% said they would be forced to shut their doors.

Another survey found that 83% of Michigan restaurant servers wanted to keep the tipping system in place, and 79% worried about losing their job if the tip credit were eliminated. Similar minimum wage laws enacted earlier this year by California for fast food workers have resulted in closures, layoffs, reduced hours and an uptick in self-service kiosks. In September, hundreds of restaurant and bar workers from across our state gathered in Lansing at the state Capitol to demand changes that respect all sides of this equation – as previous legislative efforts did.