(WWJ) — An Irish pub in Farmington is putting a 20% fee on all bills as a new wage law is set to take effect next month, unless the Michigan legislature takes action.
The Michigan Restaurant Minimum Wage and PTO law is set to take effect on Feb. 21 and many tipped workers and their employers are scrambling ahead of that date.
That includes the John Cowley and Sons Irish Pub on Grand River in Farmington, which announced Thursday it has added a 20% service fee to all their bills as politicians in Lansing introduce legislation to try and rework the law, which has been caught up in litigation for seven years.
Owner Greg Cowley told WWJ Newsradio 950 their “MI Min. Wage Fee” makes more sense than increasing the cost of each menu item.
“As I did the math and started to look at it, with the volatility of meat and chicken and all the things that are going on — eggs; we can talk about eggs forever today — we decided to leave the menu prices where they’re at. It’s much easier from a system perspective to put the 20% surcharge on, number one, and number two, it leaves the menu prices where they’re at,” Cowley said.
Back in July, the Michigan Supreme Court ruled that changes sought by a 2018 ballot initiative — which were adopted by the Legislature and then amended before becoming law — will be rolled out in the coming months.
That includes a phasing out of the tip credit.
Currently, tipped workers are allowed to be paid $3.93 per hour. (Michigan's current minimum wage is $10.33). This change means the law will soon require that tipped workers be paid the same minimum wage as all other workers.
Also as a result of the same ruling: Michigan's minimum wage will gradually increase — starting at $10.65 next year, then to $12 by 2028 (with future increases for inflation) — and every worker will earn up to 72 hours of paid sick leave.
Cowley is one of many worried about the drastic changes.
“I think you’re gonna see a lot of restaurants close,” Cowley said.
But as many Michiganders have spoken out about the law in recent months — and lawmakers grappled over whether to take action during last month’s “lame duck session” in Lansing — the legislature is thinking it over.
As a new legislative session began Wednesday — with Republicans now in control of Lansing — both chambers are already discussing legislation regarding the tipped wage changes.
The Detroit Free Press reported legislation proposed by House Republicans “would preserve the tipped minimum wage at 38% of the regular minimum wage. It would also establish an hourly minimum wage of $12 beginning Feb. 21, lower than the currently planned $12.48.”
Under that proposal, minimum wage would gradually increase until it hits $15 in 2029, as opposed to the planned $14.97 in 2028, according to the report.
Democrats in the Senate, meanwhile, have proposed legislation that would increase the tipped minimum wage gradually every year until it reaches 60% of the standard minimum wage in 10 years, according to the Free Press. It would then be capped at that rate.
The Freep reports the proposal from Sen. Kevin Hertel, D-St. Clair Shores, would also see the state’s overall minimum wage increase to $15 by 2027, a year sooner than planned under the law set to take effect next month.
The Michigan Restaurant and Lodging Association tells WWJ that they are "laser-focused in Lansing to pass a bi-partisan solution which will retain the tip credit before implementation begins on February 21st."
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