LANSING, Mich. (WZMQ) – With the new year, Michigan is set to see an increase in its minimum wage standard, but a lawsuit filed earlier this year is pushing to challenge amendments to the 2018 act that set the state’s current increase schedule.
On January 1st, the minimum wage will be raised to $10.33 per hour, but earlier this month, Michigan’s supreme court heard testimony from advocacy groups that questioned the changes to the 2018 Improved Workforce Opportunity Wage Act.
Sean Egan is the Deputy Director of Labor with the Michigan Department of Labor and Economic Opportunity. He explained that in 2018, there was a petition initiative that would have increased the minimum wage to $12.00 an hour by 2022 and slowly eliminated the tip credit that employers receive for those employees who work in tip job classifications.
For tipped workers, like servers, bartenders, or nail technicians, the minimum wage will only see an increase to $3.93. The original wage act would have eliminated the differences in pay for tipped workers, creating a universal minimum wage of more than $13 an hour in 2024.
“Employers are obligated to pay the full minimum wage. the $10.10 currently or the $10.33. however, employers are allowed to take a credit for any money that we leave as tips for those employees against their obligation to pay the full minimum wage.” Egan explained. “So, the tipped wage is set at something like 38% of the full minimum wage. That’s what it will always be the case under the current law. The petition language certainly sought to change that. Places and Cities, Cities primarily already moved to start eliminating tip credit concepts.”
The act was a petition that was originally approved by voters in 2018, but after the proposal was adopted, legislators made amendments. Egan said that shortly after the 2018 election, the legislature amended the petition to slow down the minimum wage increase and get rid of any change to the tip credit altogether.
Advocacy groups like Michigan One Fair Wage and the Restaurant Opportunity Center are now pushing to have the changes made to the act reversed, but some restaurant workers have expressed concerns that the removal of the credit for tipped wage employers will hurt their overall earnings.
“I think that working people that work for tips are concerned that if the minimum wage rate changes for them, it’s going to somehow impact their livelihoods,” Egan said. “I think the evidence that we’ve seen in other states or cities that have already done this is there’s no real change in tipping behavior for those of us that are using those services that require those types of tips so far.”
As the suit progresses, multiple initiatives have already been launched to add proposals to Michigan’s ballot in 2024 that would see the minimum wage increase up to $15 in the state. Under the current law, the minimum wage won’t increase over $12 an hour until 2030, eight years after the original ballot initiative would have achieved that.
