MI Lawmakers Propose Keeping Tipped Wage System In Minimum Wage Hike

MICHIGAN — Michigan lawmakers on both sides of the aisle made it clear Wednesday they are planning to address a mandatory minimum wage hike that will take effect on Feb. 21 and alter the state's tipped wage system.

Michigan's minimum wage is scheduled to jump to $12.48 an hour and to about $15 an hour by 2028. The tipped wage will jump to $5.99 an hour and eventually to 100 percent of the minimum wage by 2030.

Those increases are because the Michigan Supreme Court reinstated the Wage Act, which was originally approved to appear on the ballot in 2018. But before it could reach voters, Republican-led lawmakers adopted it and later watered-down the proposal, violating the state's constitution.

On Wednesday, Michigan Senate Democrats proposed a bill that will that would gradually raise the state's minimum wage to $15 an hour by 2027, while keeping the tipped wage at $4.01 for 2025. Then the state's tipped wage would eventually reach 60 percent of minimum wage over a 10-year period.

The House Republican plan also gradually increases the minimum wage to $15 an hour by 2029, but they want to keep the tipped wage at 38 percent of minimum wage.

They say business owners and servers have warned that removing the sub-minimum wage will reduce tipped worker earnings, put jobs and businesses at risk and drive up prices for customers. In other words, tipped workers will earn less because people will be tipping less.

"We’ve heard from countless hardworking small business owners and their dedicated employees about what this ruling would mean for them," Jay DeBoyer (R-Clay Township) said. "Many small businesses would close, their employees would be out of work, and the places that remain open would have to significantly raise their prices on people who go out and support businesses in their community, which will lead to an even bigger fight to stay open."

Others, such as the organization One Fair Wage Michigan, has argued that eliminating tipped wages will provide workers with greater stability and a livable income, especially women, people of color and immigrant workers.