Michigan Gov. Whitmer agrees to limit wages for tipped workers amid minimum wage hike
The Michigan State Capitol stands in Lansing, May 24, 2023. (AP Photo/Carlos Osorio, File)
LANSING, Mich. (AP) — Minimum-wage workers in Michigan started getting a pay raise Friday as Democratic Gov. Gretchen Whitmer and Republican legislators agreed to a compromise that scales back sick leave and wages for tipped workers in an effort to appease businesses.
Although Friday’s minimum wage increase was already scheduled to take effect, enough Democrats agreed with Republicans in the Legislature to speed up subsequent hikes while making the concessions to businesses that had warned of potential job cuts.
“This commonsense compromise was made possible by the Republicans and Democrats who worked together to forge a fair, bipartisan deal,” Whitmer said in a statement provided by her office.
More than 280,000 people originally signed petitions in favor of the major changes to the state’s minimum wage seven years ago. But instead of putting the issue on the 2018 statewide ballot, the Republican-controlled Legislature approved the changes, then weakened them before a new governor and new members of the Legislature took office. The Supreme Court said the actions were illegal in a ruling last year and reinstated the original changes, a decision praised by labor unions.
One Fair Wage, a nationwide group that advocates for raising minimum wages, staunchly opposed the laws signed by Whitmer. The group said it will spearhead a referendum process to reverse the law again to what the court ordered.
“We’re mobilizing to ensure voters—not politicians—have the ultimate say in whether these protections are upheld,” Saru Jayaraman, President of One Fair Wage, said in a statement.
Michigan’s minimum wage was $10.56 per hour as of January 1, 2025; less for workers in restaurants and others in tipped industries.
As a result of the court ruling, the minimum wage will rise to $12.48 an hour Friday. Under the compromise signed into law by Whitmer, the minimum will increase to $15 an hour by 2027, speeding up the timeline ordered by the court. Annual inflation adjustments determined by the state treasurer will follow each year thereafter.
But lawmakers struck provisions that would have entirely phased out lower minimum wages for tipped workers. Instead, the rate will increase to be 50% of the state’s minimum wage by 2031.
Some bartenders and restaurant waiters worried that customers would tip them less if customers knew they were being paid more. John Sellek, spokesperson for a group in favor of keeping the lower wages for tipped workers called Save MI Tips, said in statement Thursday night, “Michigan servers and bartenders can sleep a little easier knowing a bipartisan legislative solution to the impending tip credit crisis is a big step closer to reality.”
Under a deal struck late Thursday, businesses with 10 employees or fewer will either offer five days of paid sick leave per year or one hour for every 30 worked. Other businesses will offer nine days of leave. Small businesses have until October to implement the new rules, moving back the court-ordered deadline, and they will no longer have to allow employees another 32 hours of unpaid leave.
While concessions were ultimately made by both parties, Republicans largely voted to approve the changes in the end while Democrats were split.
“It is urgent that we have a deal,” Republican Speaker of the House Matt Hall said on Wednesday. “If we don’t get a deal by five, people will blame the Democrats.”
In December, House Republicans walked out of the final days of session in protest that Democrats would not take up legislation on the wage changes ordered by the court, among other issues. When one Democrat joined them, the House chamber lacked a quorum to conduct business and the session ended, effectively killing a number of priority bills for Democrats.
House Republicans then became the majority caucus in the chamber with the new year after flipping it in the November election. Democrats still hold a majority in the Senate.
The laws are written to be retroactive to just after 12:00 a.m. Friday, covering the deadline ordered by the court.