On the heels of a Michigan Supreme Court ruling that will impact local job providers, their employees and consumers across the state, state Rep. Greg Alexander called on the Legislature to act immediately to find a practical, workable way forward.

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.

The court’s changes are set to go into effect Feb. 21, 2025. Alexander said it is critical in the meantime for Democrats who hold majorities in the House and Senate to join Republicans in working toward common-sense reforms that will protect against people being put out of work and economic disruption.

“We only have a few months to get this fixed. There needs to be urgency in Lansing in working toward a solution,” said Alexander, of Carsonville. “Small businesses are facing the likelihood of layoffs, limited hours, shutting for good, or price hikes that will impact consumers. That’s not a roadmap to success for hardworking people across our region and our local economies.”

A recent survey found that 82% of Michigan restaurant servers wanted to keep the tipping system in place, and 79% worried about losing their job if the tip credit were eliminated. Another recent survey found that two-thirds of restaurant operators expected to lay off employees if the tip credit were eliminated, 94% would raise menu prices, and one in five full-service restaurants would close permanently.

Alexander 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.

“Hardworking small business owners and their many hardworking employees have been through a ton the past few years, with COVID shutdowns impacting their ability to stay open and inflation sending costs through the roof,” Alexander said. “This would be another terrible development for our vital small business sector. I am committed to a way forward that protects our job providers and workers while keeping costs low for consumers who are already struggling.”