The state Senate reached a compromise Thursday to maintain tipped earnings while significant changes to Michigan’s earned sick leave and minimum wage regulations, which are problematic for the restaurant industry, are scheduled to go into effect next week.
It’s one piece of the puzzle, but supporters of the Senate’s tipped wage compromise say reaching a consensus in Michigan’s politically divided legislature is essential to saving restaurants throughout the state, following days of testimony and frequent rallies at the Capitol Building by representatives of the service industry pleading with lawmakers to step in.
After the session, Sen. Kevin Hertel (D-St. Clair Shores) told the media that the changes to Michigan law would go into effect on February 21 unless the legislature reached an agreement. “I’ve heard loud and clear from the people across my district, whether they are small business owners, whether they are waitresses, waiters, or bartenders, that this was going to impact them in a negative way, and they wanted something to change here,” he said.
The state Supreme Court declared last summer that the state legislature’s 2018 ballot efforts that would have increased the minimum wage to $15, phased out sub-minimum tipped wages, and established requirements for mandatory sick leave for workers were unconstitutional because they were watered down after the election. Although lawmakers have the option to enact various regulations, the court’s ruling required that the modifications in the ballot efforts be enacted. This would allow for hours of testimony to get opinions from Michigan employees and company owners.
Since many claim they make significantly more money under the current tipping system than they would at minimum wage, hundreds of professionals in the service industry have gathered at the Capitol to support Republicans in both chambers who have been outspoken in their support of keeping Michigan’s tipped wage for servers and bartenders at 38% of the minimum wage.
Senate Bill 8, which boosts tipped earnings to 50% by 2031, was the result of politicians reaching a compromise after Senate Democrats suggested progressively raising tipped wages to 60% while House Republicans supported keeping the minimum wage at 38%.
With five senators excused, it passed 20–12.
After the vote on the legislation, Senate Minority Leader Aric Nesbitt (R-Porter Township) told the media that while it’s not a comfortable compromise, Republicans carried it to the end because Democrats, who control the Senate majority, only provided eight of the yes votes, while 12 Republicans supported the bill.
Republicans in the Senate led the charge, and we will keep defending diligent small business owners, Nesbitt stated. We are stating today that Senate Republicans will support small business owners. Republicans in the Senate are on your side, hardworking people in the hospitality sector.
Hertel was one of eight Democrats who supported the bill, along with Sens. Sam Singh (D-East Lansing), Veronica Kleinfelt (D-Eastpointe), Jeremy Moss (D-Southfield), Dayna Polehanki (D-Livonia), Sue Shink (D-Northfield Twp.), Paul Wojno (D-Warren), and Senate Majority Leader Winnie Brinks (D-Grand Rapids).
With House Speaker Matt Hall (R-Richland Township) praising the Senate’s actions Thursday, Senate Bill 8 offers the clearest route to passage. It also permits the minimum wage to reach $15 by 2027, two years sooner than the plan the Republican-led House has passed.
Hall stated in a news release on Thursday that while tonight’s vote is a positive step, Michigan workers cannot afford any more delays. It’s time for Senate Democrats to contribute to the sick leave benefits plan I proposed, which benefits everyone. We can finish this right away because the transaction is on the table.
But the deal did not sit well with everyone. One Fair Wage President Saru Jayaraman described the bill as a willful attempt to deprive Michigan’s lowest-paid workers of their money.
Workers in Michigan will remember clearly who stood with them and who betrayed them by reducing their pay. This is a clear betrayal and a pay cut. Jayaraman said, “We applaud the majority of Senate Democrats who listened to working people and condemn the eight Senate Democrats who still chose to side with Republicans and corporate lobbyists to strip wages from the lowest-paid people in this state after an election cycle where workers made it clear that politicians must stand with them.” If you vote against a minimum wage rise that was won in court and was only a few days away from going into effect, what does it even mean to be a Democrat? These senators will now be held accountable for their decision.
Legislators are currently negotiating sick leave policies, and changes to minimum and tip earnings still need approval from both chambers.
While the Senate’s plan would impose different sick leave rules for companies with less than 25 employees than for those with 25 or more, the House’s plan would remove companies with fewer than 50 employees from the sick leave statute.
It will take a lot of discussions and effort to bridge the sharp ideological gaps in Lansing for the benefit of everyone, but Nesbitt and Hertel told reporters that the nonpartisan character of the minimum wage deal speaks well for reaching an agreement on sick leave next week.
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.