LANSING — Michigan lawmakers advanced a bipartisan deal on tipped wage reform late last week, potentially alleviating some of the worst fears of the restaurant industry.
The bill — SB 8 — maintains Michigan’s tipped wage as a portion of the hourly minimum wage, but increases it from 38% to 50% over the next six years.
“It’s definitely workable,” said Sarah Van Horn, president of the Charlevoix Chamber. “I think it does show a good balance of implementing pieces of the law where that was meant to benefit employees, while also taking into account the actual implementation on businesses and what that does to consumer prices and business operations.”
The proposal comes ahead of the Feb. 21 enactment of tipped wage and sick time policies approved last year by the Michigan Supreme Court.
If passed into law, the proposal would increase both Michigan’s minimum wage and tipped wage, though differently than currently planned.
The hourly minimum wage would increase this week as expected, moving from $10.56 to $12.48.
The tipped wage would still increase on the 21st, though by a lesser amount. It would jump from $4.01 to $4.74, down from the previously expected $5.99.
The proposal would speed up the implementation of a $15 hourly minimum wage to 2027. That change would bring the tipped wage to $6.30 in two years, significantly lower than current state policy, which would set the wage at $9.91.
After 2027, the hourly wage would be increased with inflation each year, calculated by the consumer price index and delayed if unemployment rises to a certain level. And in 2031, the tipped wage would be capped at 50% of the hourly wage.
”I think what has been passed for that regard is a good balance, a good middle ground, to still allow that tipped wage system and allow our servers and those in the tipped wage to continue to make that that heavier wage when they are getting those tips,” Van Horn said.
Still, lawmakers are entering the week with significant questions on sick time policies unanswered.
The policies currently set to go into effect would require small businesses to provide at least 40 hours of paid sick time per year and larger businesses at least 72 hours. A small business currently is defined as one with less than 10 employees.
The Democratic proposal — SB 15 — would raise that to 25 employees, while the Republican plan — HB 4002 — would only require paid sick time be provided by businesses with 50 or more employees.
In current policy, employees can miss three consecutive days of work before being required to provide some form of documentation for their illness or situation.
The Democratic-Senate plan maintains the three-day rule but allows some industries like nursing to impose their own policies, while the Republican-House plan says that businesses can put their own requirements into place and discipline employees if those policies are broken.
Both plans would allow employers to front-load their employees with 72 hours at the beginning of the year, after which accrual wouldn’t need to be tracked.
It remains uncertain which policies — if any — could be signed into law by the end of the week.