State Rep. Matthew Bierlein today expressed alarm regarding a Michigan Supreme Court ruling that will negatively impact local job providers, their employees, and consumers across the state.

The decision raises the minimum wage and eventually eliminates the tip credit for servers, bartenders, and other workers who frequently make more with tips than they would through a higher minimum wage. In 2018, the Michigan Legislature took necessary action by adopting two citizen-initiated laws to ensure that a minimum wage increase and new paid sick leave rules worked for all Michiganders. Amendments to these laws struck a balance by fostering economic growth while protecting workers.

“Unfortunately, this decision will hurt small businesses – especially our restaurant industry – and force them to either cut their hours or lay off hardworking people,” said Bierlein, of Vassar. “It will also force many small businesses to raise prices to help make ends meet, meaning costs will be passed down to Michigan consumers at a time when people’s budgets are tight and the cost of everyday expenditures are already high. This short-sighted ruling will have a chilling effect for our local businesses and our local economies. Workers who are laid off won’t be able to benefit from wage increases or mandatory paid sick leave.”

A recent survey by the Michigan Restaurant and Lodging Association lays out the dire consequences of pressing forward with more extreme elements from the original proposal as mandated by the Supreme Court. More than 92% of restaurants said they will be forced to hike their prices, with many anticipating increases of 20-25% by early 2025. Sixty-six percent of restaurant owners said they would be forced to lay off employees, and 20% said they would be forced to shut their doors.

Bierlein also pointed to similar minimum wage laws enacted earlier this year by California for fast food workers that have resulted in closures, layoffs, reduced hours and an uptick in self-service kiosks.

The changes are set to go into effect Feb. 21, 2025. Bierlein said it is critical in the meantime for the Democrats who hold majorities in the House and Senate to join Republicans in working toward common-sense reforms that will ensure the Court’s decision does not devastate local job providers and economies.

“We have just a few months to stand up for our vital small business sector and their hardworking employees before these changes are effective,” Bierlein said. “Our local job providers have been through the wringer the last few years. We have to act now to avoid this court decision dealing them another blow.”