Many Michigan workers would make at least $15 an hour within the next two years under a plan passed Thursday in the state Senate.
Under the bill, the minimum wage for tipped workers would eventually rise to half of what others are making. Tips are supposed to make up the difference.
That’s still different, however, than a court-restored minimum wage law set to take effect next Friday.
That law would incrementally grow the state’s minimum wage for both tipped and non-tipped workers so both camps are making the same amount by February 21, 2030.
Service industry groups had long decried that. They argued being forced to cover a tipped worker’s full wage without any accounting for tips could put them out of business.
Restaurants worry paying workers more out of pocket would lead to higher menu costs and lower tips.
During a committee hearing Wednesday, the Michigan Department of Labor and Economic Opportunity shared a presentation that found tipping habits across the country were within the 15-20% range, regardless of how much a worker made.
Still, State Senator Kevin Hertel (D-St. Clair Shores) sponsored the bill to change that policy before it takes effect.
“I've heard loud and clear from people across my district, whether they are small business owners, whether they are waitresses, waiters, bartenders, that this was going to impact them in a negative way, and they wanted something to change here,” Hertel told reporters. “That's why we worked so hard to get Senate Bill 8 passed.”
Hertel’s bill only passed the Senate because most Republicans in the Democratically-controlled chamber voted for it. Most Democrats did not.
“I think this shows that in a divided legislature, we're going to have to agree to disagree sometimes, but move important issues forward. This is a good start to a divided legislature. This is a really important policy, I think. But we did it in a bipartisan way,” Hertel said.
Groups opposed to the bill argued lawmakers should let the minimum wage law take effect as is to see how things go before making any changes to it. They say tipped workers should be making more in base pay anyway.
Despite the bipartisan vote, Republicans in the Senate largely said they were reluctantly supporting the measure just to keep things moving forward.
Senate Minority Leader Aric Nesbitt (R-Porter Twp) said he’d rather keep the minimum wage for tipped workers at 38% of the base rate of the regular minimum wage, as it currently is.
“Our full-service restaurant model that has been built up over the last several decades is built on this. And so, it's one of those things where, do you live to fight another day? And, today we're saying, ‘Small business owners, Senate Republicans are going to have your back,’” Nesbitt told reporters after Senate session Thursday.
Democrats in the Senate had originally proposed capping the minimum pay for tipped workers at 60% before compromising at 50% in what Hertel described as a “framework” for a deal with the House. The bill will still need to make it past that chamber to become law.
Earlier in the day, House Speaker Matt Hall (R-Richland Twp) called on Democrats to meet him in the middle with that 50% number.
“This is a good first step for Michigan’s tipped workers and their small businesses all across our state. If it gets done, this agreement would keep thousands of people on the job, help them make more money to support their families, and keep many of our beloved local businesses open for generations to come,” Hall said in a press release following the Senate vote.
While the Senate passed a minimum wage proposal Thursday, it held off on possible changes to the state’s sick leave law, which is also supposed to take effect next Friday.
Wording in the Senate minimum wage bill stops it from taking effect unless lawmakers also pass a House sick leave proposal too.
That House bill has been before the Senate for weeks. But negotiations on what a final version will look like are still ongoing.
