Michigan’s tipped wage system is on the brink of extinction, with changes set to take effect next month after a state Supreme Court ruling last year mandated higher wages for tip-reliant workers.
The ruling will eliminate tipped wages below minimum wage and raise the state’s minimum wage to more than $12 per hour.
Justin Winslow, president and CEO of the Michigan Restaurant and Lodging Association, said the almost 250% increase in the wages of tipped workers would be catastrophic and he said it is happening at the worst possible time, as inflation hits his industry more than others.
“You add that difficult environment to this new policy and you have the recipe for the loss of 60,000 restaurant jobs in Michigan and the closure of one in five full-service sit-down restaurants in Michigan,” Winslow contended. “When I say catastrophic I think that’s what we mean.”
Supporters of the change argued it ensures fair pay and reduces income instability for tipped employees, who can face unpredictable earnings. Tipped wages are set to be phased out Feb. 21.
Winslow pointed out servers are currently earning around $30 an hour, with some making even more, all while enjoying flexible schedules. He emphasized roughly 80% of workers want to preserve the current system. On a positive note, Winslow noted bipartisan efforts are in motion, with similar bills from both parties set to be discussed in a hearing today, to protect tipped wages.
“The new House leadership seems to be making it a real priority to try to get something done in advance of February 21st, so we’ll be front and center there making sure they understand and hear from the voices of impacted restaurant workers and restaurant owners.”
The Michigan Restaurant and Lodging Association warned as many as 60,000 jobs could be in jeopardy if businesses are required to eliminate tipped wages.
