Oakland Co. Restaurant Raises Concerns About MI's New Minimum Wage Law

BIRMINGHAM, MI — One downtown Birmingham restaurant believes Michigan's new minimum wage law will have a significant impact on the industry across the state.

Michigan's minimum wage will rise to $12.48 an hour on Feb. 21, 2025. Further adjustments will eventually push the wage to $14.97 in 2028, and then it will increase on pace with inflation.

The new law will also gradually phase out the state's tipped wage, as tipped workers will make full minimum wage by 2030. On Feb. 21, 2025, the tipped workers wage will increase to nearly $6 per hour.

Hazel's Co-Owner Beth Hussey told Patch she believes that most Michigan restaurants will be forced to make drastic changes.

Hussy said one option for her restaurant could be to change everybody's pay, such as raising the servers' pay and lowering the cooks' pay, and all workers share the tips the customers leave. Another option would be to eliminate tipping and raising prices to pay all workers across the board.

"We've already had to raise our prices about as much as we think we can raise them," Huessy said. "So raising them more would make it very difficult for customers to keep coming to my restaurant."

While the new law will significantly raise a tipped worker's wage, Hussy worries that increase can actually push servers out of the industry. She said the lucrative position allows servers to make a lot of money in a short amount of time.

"Servers are making a smaller wage, but when you add their tips up, they're actually making a very high wage," Huessy said. "It's not uncommon for my servers to make $35-$45 an hour."

Without those tips, especially if they're eliminated, Hussey believes servers may want to look elsewhere.

Other ideas that have been tossed around Michigan's restaurant industry to increase payroll include ditching full-service for self-service, meaning customers would place their order at the counter and take their own food to the table.

But Hussey said that would be a major format change that doesn't really work with her restaurant space.

Overall, Hussey believes most restaurants will have to make some kind of changes to keep customers coming in.

"Every restaurant will have to react somehow," Huessy said.