With minimum wage boost pending, tipped workers rally against changes

(This story has been updated.)

LANSING — On the same day the Michigan Supreme Court issued a follow-up order clarifying its noteworthy ruling that will boost the state's minimum wage next year, hundreds of servers and bartenders took to Lansing Wednesday to call on lawmakers to preserve the current tipped minimum wage scale, arguing that pending changes will dramatically hurt their earnings.

In the clarifying order issued Wednesday afternoon, which follows up on a seismic July ruling to increase minimum wage in Michigan next year, justices wrote their initial ruling correctly established a timeframe for raising the minimum wage but pushed back the year the so-called tip credit will be eliminated to 2030, one year later than it had initially ordered.

Michigan's minimum wage is still slated to increase to $10 plus an inflation adjustment on Feb. 21, 2025. The tipped minimum wage will be 48% of the standard minimum wage, beginning that date.

The initial ruling was also at the forefront of a rally at the state Capitol Wednesday afternoon, where tipped workers said they never asked for a standard minimum wage. Rallygoers argued they take home substantially more pay through tips earned waiting tables or working shifts behind the bar.

"We haven't asked for this, we don't want this. If this does change, me going from $40-$50 an hour right now off tips down to $15-$20 an hour, a standard wage, I'm not going to be able to support myself," said Angelo Hawkins, a 21-year-old business student at Michigan State University who works at a Buffalo Wild Wings in Lansing.

The rally was organized by Save MI Tips, a group calling on Michigan lawmakers to address pending changes to the state's wage scales before they can take effect next year.

In July, the Michigan Supreme Court struck down the state's existing minimum wage laws, which currently set the standard minimum wage at $10.33 an hour and the tipped minimum wage at $3.93 an hour. The tipped minimum wage is the lower hourly wage paid to workers like servers and bartenders who are expected to make the bulk of their earnings through tips.

The court's ruling directs the state treasurer to establish a new hourly minimum wage to take effect Feb. 21, 2025. That minimum wage will be $10, plus an adjustment for inflation, per hour. The tipped minimum wage will also rise to 48% of the standard minimum wage.

Both minimum wage and the tipped minimum wage will gradually increase until 2029, when the state treasurer will be tasked with determining an inflation-adjusted minimum wage. That year, the tipped minimum wage will rise to 90% of the standard minimum, before being eliminated altogether in 2030, under a follow-up ruling issued by the court on Wednesday.

But tipped workers are calling on lawmakers to address wages in Michigan before the court's ruling can take effect. Restaurant servers worry patrons will be less willing to tip if workers make a flat hourly wage.

"Tipped employees, servers and bartenders, rely on our tips as a significant portion of our income," said Mckinna Goerner, a bartender at a Buffalo Wild Wings in Port Huron. "Many of us already earn well above the minimum wage when our tips are factored in."

Restaurant advocacy groups have also sounded the alarm on the ruling's potential effect on small businesses in Michigan. In June, a survey published by the Michigan Restaurant and Lodging Association found a majority of the 186 restaurant operators surveyed said they would increase prices and lay off employees to accommodate for the rise in wages.

Justin Winslow, MRLA president and CEO, said in July the "ruling by the Michigan Supreme Court strikes a likely existential blow to Michigan’s restaurant industry and the nearly 500,000 workers it employs."

Supreme Court issues follow-up ruling, timescale for wage increases

The Michigan Supreme Court's July ruling came after years of back and forth over minimum wage in Michigan. In 2018, organizers launched a petition initiative to raise Michigan's minimum wage to $12 an hour by 2022. That year, the state Legislature adopted the petition's language, but amended it to delay the increase to $12 an hour until 2030.

Organizers of the petition sued the Legislature over the maneuver, eventually landing the case at the Michigan Supreme Court.

In a 4-3 ruling, justices said the Legislature, controlled by Republicans at the time, did not have the authority to adopt and amend the petition's language in the same session. But since the 2022 target for a $12 an hour minimum wage had already passed by the time they weighed in, they directed the state treasurer to account for inflation up to July 31, 2024, to determine what minimum wage should be next year.

On behalf of Michigan State Treasurer Rachael Eubanks, Attorney General Dana Nessel's office filed briefs with the Michigan Supreme Court in July seeking clarity on the ruling.

In an Aug. 21 filing, Solicitor General Ann Sherman wrote while the court set a July 31 end date for an inflation calculation, it did not set a starting point for the calculation.

Without a starting point to calculate inflation, there is confusion on how to set the new minimum wage in Michigan, Sherman wrote. Sherman's filing contained five different scenarios for calculating inflation, but listed a favored starting point of Jan. 1, 2019.

The Michigan Supreme Court agreed with the starting date. On Wednesday, just after the Save MI Tips rally concluded, the court issued a clarifying ruling stating the state correctly interpreted Jan. 1, 2019, as the starting point.

The Supreme Court also ordered Eubanks' office to determine next year's minimum wage by Nov. 1.

In their follow-up ruling, the court also pushed back by one year the date which the tipped minimum wage will be eliminated. In their initial ruling, justices wrote the tipped minimum wage will reach 100% of the minimum wage in 2029, after being 80% of the standard minimum wage in 2028.

They amended that scale in their clarifying ruling. Now, the tipped minimum wage will remain 80% of the standard minimum wage in 2028, but increase to 90% of the minimum wage in 2029 before being eliminated completely in 2030.

Time dwindling to address minimum wage changes

It's unclear if the Michigan Legislature, where Democrats currently hold narrow majorities in each chamber, will take up bills to address minimum wage before its session wraps up at the end of the year.

In July, both Speaker Joe Tate, D-Detroit, and Sen. Majority Leader Winnie Brinks, D-Grand Rapids, applauded the court's ruling against the adopt-and-amend tactic, but said their offices were reviewing the full court rulings.

Amber McCann, a spokesperson for Tate, said in an email that Tate is aware of calls to pass laws preserving the tip credit, but a decision on whether to take up legislation has not yet been made.

"The Speaker has heard from multiple stakeholders on both sides of the issue. We know there are those in favor of preserving Michigan’s existing tipped wage rate and those who want to see upcoming changes in the wake of the Court ruling take effect," McCann said.

"The Speaker has encouraged his caucus members to gather input from their constituents on what, if any, action should be (taken) in the wake of the Court’s ruling on 'adopt and amend,' but no decision has been made regarding potential legislative action. "

Alex Rossman, a spokesperson for Senate Democrats, referenced similar remarks made by Brinks on the Senate floor Tuesday, when she said, “(W)e’re gathering input from everyone that’s been impacted. We’ve been hearing from constituents, business owners, employees, and communities, and we continue to take in that information.”

Sen. Thomas Albert, R-Lowell, introduced legislation to gradually raise minimum wage to $12.05 by 2030, while maintaining the tipped minimum wage at 38% of the standard minimum wage.

"I am concerned if (minimum wage) was moved too abruptly, too high, you're going to be cutting out certain jobs from the market," Albert said in a Sept. 5 interview with the Free Press.

Other Republicans have also called for lawmakers to address the pending changes.

Sen. John Damoose, R-Harbor Springs, told the rally Wednesday that session days have been limited in recent weeks largely due to campaigning for the upcoming Nov. 5 election. While Senate elections are not for another two years, every House district is on the ballot this fall.

Backers of the petition initiatives have called on Democratic leadership to not undo the pending wage increases established by the Supreme Court. Christopher White, director of the Restaurant Opportunities Center of Michigan, said the ruling is a benefit to Michigan workers, particularly those in underserved communities. The Restaurant Opportunities Center of Michigan was among the plaintiffs in the case.

Organized labor groups are also calling on Democratic leaders to not undo the pending increases.

Several prominent unions in the state, including the Michigan Education Association and the Michigan AFL-CIO, sent a letter to Brinks and Tate urging them to "stand firm in support of these worker gains and reject any efforts to obstruct or undermine them."

"We write to reject any attempt to undermine this historic worker victory, and state emphatically that any effort to obstruct, slow down, divide workers, or otherwise undermine tangible benefits secured by workers, would be similarly unprecedented and improper," the joint letter stated. "Michigan legislators should honor the court’s recent decision and allow minimum wage increases to proceed without interference."

Seven states — Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington — plus Washington, D.C., do not currently have a tipped minimum wage, according to human resources platform Paychex.

Contact Arpan Lobo: [email protected]

This article originally appeared on Detroit Free Press: Hundreds of tipped workers rally at Michigan Capitol over wage ruling