LANSING, Mich – In a significant decision, the Michigan Supreme Court has ruled to raise the minimum wage and eliminate the tip credit for servers, bartenders, and other tipped workers, with the changes set to take effect on February 21, 2025. This decision has sparked concern among lawmakers and industry representatives.
The Michigan Supreme Court ruled that the Legislature’s adopt-and-amend approach to a 2018 ballot initiative was unconstitutional. As a result, starting February 21, 2025, the state’s minimum wage for regular and tipped workers will increase to $12 per hour. This change will affect approximately 494,000 workers, according to One Fair Wage, the group behind the initiative.
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State Rep. John Roth, R-Interlochen, issued a stark warning about the potential fallout from the court’s ruling. “This ruling just started the countdown on a ticking time bomb within our restaurant industry,” Roth stated. “Lawmakers have until February to take action and ensure that thousands of Michigan restaurant employees and businesses won’t suffer because of this decision. We must return to work now. This is bigger than elections. We’re talking about people’s livelihoods. If these changes are allowed to stand, locally owned restaurants we’ve been bringing our families to for generations will close their doors forever. We can’t let that happen.”
The Michigan Supreme Court has issued opinions in No. 165325, Mothering Justice v Attorney General, which was argued on December 7, 2023. https://t.co/hJBRIxEEfz pic.twitter.com/X5nlk1SLRH
— MI Supreme Court (@MISupremeCourt) July 31, 2024
The origins of the controversy date back to 2018, when the Michigan Legislature adopted two citizen-initiated laws to increase the minimum wage and create a new paid sick leave rule. The Legislature subsequently amended these laws within the same session, aiming to align them with the initiatives’ intent while preventing widespread layoffs and business closures. Progressive groups later sued the state, arguing that the “adopt and amend” practice was unconstitutional.
A recent survey conducted by the Michigan Restaurant and Lodging Association underscores the potential dire consequences if the 2018 proposals are implemented as originally intended. According to the survey:
- 66% of restaurant owners indicated they would be forced to lay off employees.
- 20% stated they would have to shut their doors.
- 42% anticipated needing to reduce operating hours.
- Over 92% expected to hike prices, with many forecasting increases of 20% to 25% by early 2025.
As the February deadline approaches, the pressure mounts on Michigan lawmakers to address the impending crisis and find a solution that safeguards both the livelihoods of workers and the survival of local restaurants.
One Fair Wage released the following statement Wednesday:
“This is a great day for the more than 494,000 workers in Michigan who are getting a raise. We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top.
“Back in 2018, we gathered more than 400,000 signatures to support raising wages for all workers in Michigan, including tipped workers, and effectively end the subminimum wage – a direct legacy of slavery. Republicans who controlled the legislature at that time recognized the popularity of raising the minimum wage and its power to mobilize hundreds of thousands of new, unlikely voters. In an attempt to undermine the democratic process, they adopted the measure to remove it from the ballot, and then planned to reverse the wage increase after the election. Thankfully, the court saw through this undemocratic maneuvering and blocked their efforts to suppress the will of the people.
“Today’s court decision not only ensures that all workers in Michigan receive a raise; it also makes Michigan the eighth state to end the subminimum wage for tipped workers, the first state East of the Mississippi to end the subminimum wage for tipped workers, and the first state anywhere in over 40 years to do so. It’s clear tipped workers don’t just need a tax exemption – they need living wages with tips on top!!! This is just the first of many more victories to come in a year in which key voter groups, especially young voters and voters of color, have named ‘the rising cost of living’ and ‘jobs with living wages’ as their top electoral priorities!”
