How Michigan's new minimum wage affects tipped workers
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State lawmakers last week reached an 11th-hour deal to preserve a lower minimum wage for workers who earn tips.
Why it matters: The agreement satisfied restaurant owners opposed to paying planned wage hikes and settled a years-long battle over how much the minimum wage will increase in the coming years.
Catch up quick: A state Supreme Court ruling in July set the table for last week's mad dash to reach a compromise.
- Absent new legislation by last Friday, the state's tipped minimum wage — now set at $4.74, or 38% of the standard minimum — would have been eliminated by 2030.
- Groups representing restaurant workers were on both sides of the argument. Those who wanted to preserve the tipped wage said that eliminating it would reduce their pay because customers would tip less. But others who fought for higher pay rates said tipped wages create a lower class of workers.
State of play: Gov. Gretchen Whitmer signed legislation Friday that will preserve the state's tipped wage.
- Instead of being phased out, the tipped wage will gradually increase to 50% of the minimum wage by 2031.
- Employers will have to pay the difference for workers who don't reach the standard minimum wage with tips.
- Employers who don't pay the tipped minimum wage face fines up to $2,500.
Meanwhile, the standard minimum wage will increase to $13.73 next year and $15 in 2027.
- It's now $12.48 per hour.
Between the lines: The legislative package Whitmer signed also allows workers across the state to accrue one hour of paid sick time for every 30 hours they work.
What they're saying: "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. "I hope we can build on this momentum to keep passing commonsense, bipartisan legislation that makes a real difference in people's lives."
- The Michigan Restaurant & Lodging Association celebrated the bill's passage and thanked lawmakers for listening to restaurant owners and servers.
Yes, but: "The fight is not over," prominent Democratic attorney Mark Brewer told the Detroit News after Whitmer signed the compromise.
- Brewer represents two groups who sought the tipped wage's elimination and told the News that a lawsuit or new petition campaign is possible.