Michigan Legislature seeks final votes on earned sick time and minimum wage

Michigan Capitol | Susan. J. Demas illustration

It’s decision day for Michigan lawmakers where elected leaders from across chambers and political divides will either come to an agreement on new minimum wage and sick leave policies for the state or allow court-mandated changes members of the restaurant industry have railed against to be implemented Friday.

It’s been a multiyear debate, starting in 2018 when ballot proposals to raise Michigan’s minimum wage and implement new sick leave policies were adopted by the state Legislature, keeping them off the ballot, only to be watered down by lawmakers following the election. In 2024 the state Supreme Court ruled that the adopt and amend maneuver by the Legislature was unconstitutional and ordered that the original measures outlined in the 2018 proposals be implemented by Feb. 21.

The first major task of Michigan’s 103rd Legislature, which began in January, is to deal with legislation to alter the impending rules as hundreds of restaurant owners and servers have beseeched elected officials to intercede. Stakeholders have argued that the impending changes will lead to mass layoffs, decreased take home pay and the death of the small business economy in Michigan.

Meanwhile, groups behind the legal effort to have the state Supreme Court review the 2018 Legislature’s decisions are hopeful that lawmakers will allow the original proposals to remain, declaring that they work to raise the wages of all workers and would offer paid sick leave policies that are pro-worker and pro-family.

After much debate, and a boycott from House Republicans from voting in session, the Legislature worked out half of the puzzle Wednesday, passing a compromise on minimum wage.

The court order mandates that sub-minimum tipped wages be phased out in favor of a uniform minimum wage which would reach nearly $15 by 2028.

After many servers and business owners decried the phasing out of Michigan’s tipped wage set at 38% of minimum wage, lawmakers came to a compromise with Senate Bill 8 which got mixed approval from both parties. Under the bill, minimum wage would reach $15 sooner, now in 2027, and tipped wage would be gradually raised, but capped at 50% by 2031.

“This bill will help save the tip credit. It will allow our wait staff and bartenders to continue to make a good living,” Nesbitt said. “This bill isn’t perfect. It’s not what I would pass if I was the only one making the decision. It’s not what we would pass if there was a Republican majority in the Senate… but when it comes to saving Michigan jobs and keeping our local restaurants and bars and businesses, we can’t make the perfect the enemy of the good.”

The bill will have to get approval in the state Senate Thursday to gain immediate effect and circumvent the state Supreme Court decision. The path to immediate effect isn’t clear, considering the bill cleared the Senate last week with only 20 votes of approval and will require 25 votes for immediate effect.

Senate Bill 8 only represents part of the changes and its tie barred to House Bill 4002, which addresses the other half, amending the court ordered paid sick leave policies. With the tie bar, both bills have to pass or neither of them passes.

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Under House Bill 4002, proposed by the Republican-led House, businesses with 50 or fewer employees would be exempt from sick leave rules, qualifying as small businesses. The Democratic-led Senate is in favor of maintaining mandates for businesses to provide paid sick leave, but would allow businesses with fewer than 25 individuals to offer less paid days off.

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