LANSING (WWJ) -- Servers and bartenders in Michigan will soon make the same minimum wage as everyone else, under upcoming changes to state law.
In a 4-to-3 decision, the Michigan Supreme Court ruled the legislature's prevention of a 2018 minimum wage ballot initiative was unconstitutional. Basically, what lawmakers did was sidestep the voter initiative process by adopting the petition measure — preventing it from appearing on the ballot.
Later that year, during a lame-duck session ahead of the end of then-Gov. Rick Snyder’s term, lawmakers extensively amended the measures and Snyder signed them into law.
The court's ruling on Wednesday means a few things, including the phasing out the "tip credit," which allowed a reduced minimum wage for tipped workers.
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 all workers to be paid the same minimum wage as all other workers.
Also as a result of the ruling Wednesday: Michigan's minimum wage will gradually increase — starting at $10.65 next year, then to $12 by 2028 (with future increases for inflation).
In addition, the ruling means every worker will earn up to 72 hours of paid sick leave moving forward.
This all starts to go in effect 205 days from today, on February 21, 2025.
In statement, the group One Fair Wage called the court's ruling a "worker-led victory" marking a new milestone in a nationwide campaign to raise wages and end subminimum wages amid the rising cost of living.
The group, which circulated the 2018 petition, said this ruling is expected to impact 494,000 Michigan workers, who will get a raise.
"We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top," the statement by One Fair Wage reads.
“Back in 2018, we gathered more than 400,000 signatures to support raising wages for all workers in Michigan, including tipped workers, and effectively end the subminimum wage – a direct legacy of slavery. Republicans who controlled the legislature at that time recognized the popularity of raising the minimum wage and its power to mobilize hundreds of thousands of new, unlikely voters. In an attempt to undermine the democratic process, they adopted the measure to remove it from the ballot, and then planned to reverse the wage increase after the election. Thankfully, the court saw through this undemocratic maneuvering and blocked their efforts to suppress the will of the people."
Chris White, director of the Restaurant Opportunities Center (ROC) of Michigan, also lauded this ruling as a good thing for Michigan workers.
“This ruling is the answer to economic opportunities and job protections that every worker, every voter and every person — Black, white, Latino, Asian, gay and straight, binary and non-binary, Democrat and Republican, immigrants and Native Americans, young and senior — deserves. Together with our coalition partners and allies, I am proud of what we have accomplished!” White said.
Among those on the other side of the issue is Democratic Michigan Rep. Noah Arbit, who represents West Bloomfield and Commerce Twp., who said this move will hurt struggling restaurants.
In a post on X, Arbit wrote: "40% of restaurants across Michigan could go out of business when the tip credit skyrockets. Thousands of servers will be laid off. I look forward to working w/ colleagues and partners on a fix that will not leave our beloved community restaurants on a cliff-edge this winter."
Michigan House Republican Leader Matt Hall also reacted negatively to the court's ruling, saying in a statement:
“The Legislature must return to the Capitol immediately, because this decision will completely disrupt the livelihoods of hard-working Michiganders. Restaurants and other small businesses will have to raise their prices, tipped workers will take home less pay, and some people will lose their jobs..."
Michigan's minimum wage is not expected to exceed $12 an hour until 2030.
Also weighing in on these developments is Michigan Attorney General Dana Nessel, who was named in her officials capacity as a defendant in the lawsuit which resulted in the court's ruling.
“This is a landmark victory for Michigan voters and a resounding affirmation of the power of direct democracy,” Nessel said. “The Legislature cannot manipulate its power to undermine the will of the people. This ruling sends a clear message that elected officials cannot disregard the voices of their constituents. I am glad to see the Court recognize and respect that the people reserved for themselves the power of initiative, a crucial tool meant to shape the laws that govern them.”