By now you probably have heard that the democrat majority Michigan Supreme Court went partisan last July to strike down the Workforce Opportunity Wage Act (2018 PA 368) and Paid Medical Leave Act (2018 PA 369) arguing that they are unconstitutional because they amended ballot initiatives that had been adopted into law within the same legislative session.

This results in two never-voted-for, never-debated, anti-business laws coming into effect starting February 25, 2025.

There is still time to legislate modifications to these laws.  Many legislators of both parties and the Governor have expressed willingness to listen to changes but our industry must put the pressure on.

As it stands now:

The new minimum wage and tip credit law

In addition to the normal minimum wage increase starting January 1, 2025, the new law requires a second increase starting February 21, 2025.

As of February 21, 2025 (see article), the second new minimum wage increase goes to $12.48 per hour.  Tipped employees must be paid $5.99 per hour.  Youth minimum goes to $10.60 per hour.  (This is an increase of $2.06 per hour for tipped employees.)

Please note that starting February 21, 2025 the tip credit which allows you to pay tipped employees less than the minimum will gradually phase out until in 2030 when it will no longer exist.  This increases your labor cost dramatically.

This is a job killer.  Can you imagine?  Our payroll data show tipped employees make at least $20 per hour.  Add a $15 minimum wage to that and they are making $35 per hour.  That’s crazy.

The new Paid Sick Leave law.

The following will be effective on February 21, 2025.

• All employers in Michigan must provide an accrual of 1 hour of paid sick leave for every 30 hours worked.
• Employers with less than 10 employees must provide up to 40 hours of paid sick time per year.
• Employers with 10 or more employees must provide up to 72 hours of paid sick time per year.
• Employers must allow for a carryover of unused paid sick time from one year to the next with no cap.
• Employers can only require a doctor’s note after 3 consecutive sick days off.
• There are no eligibility exceptions to the law – everyone is eligible regardless of their employee status. Part-time, seasonal, temporary, exempt or non-exempt.
• All employers must provide the paid sick leave regardless of number of employees.
• Employer must pay tipped-employees based on base wage plus average tips from the prior week.
• Employer must allow for paid sick leave to be taken on the smallest time increment that the HR software allows.

Call to Action

This law, especially the elimination of the tip credit and the entire sick pay law is unworkable.  We must push hard to get this law modified or eliminated.

1. Call your state senator and representative and voice your concerns.
2. Write your state senator and voice your concerns.
3. Vote pro-business this November. (The two pro-business Supreme Court Justices up for election are Andrew Fink and Patrick O’Grady.)
4. Go to the Michigan Chamber of Commerce, Michigan Manufacturers Association, and Michigan Restaurant and Lodging Association websites. They have letters they will send on your behalf.
5. Many of you have legislators that eat at your restaurants. Voice your concerns to them.
6. Talk to other restaurant owners. Let’s band together.
7. Whatever publicity you can generate about this is important. What will a table service meal- out cost if tipped employees are making $35 per hour?  This paid sick leave law is unworkable.  Your labor costs will be uncontrollable because, as currently written, employees can game the system.