(The Center Square) – Two bills, which would adjust minimum wage and paid sick leave legislation set to take effect in February, have successfully advanced through committee in the Michigan state House.
The House Select Committee on Protecting Michigan Employees and Small Businesses voted unanimously Thursday to pass the updated bills, which are part of a bipartisan, last-ditch effort to address business concerns with the new regulations.
“This is a major step in the right direction to protect our workers and local, family-owned businesses. I am grateful to the committee for its work, those who came to testify and proud we could send such a strong, bipartisan message on the importance of this legislation,” said State Rep. Bill G. Schuette, chairman of the committee in a news release. “As we heard over this week, if the Legislature fails to act, the impacts are clear. People will be put out of work, prices will go up and family-owned small businesses will close.”
This continues a controversy which first began in 2024, when Republicans and Democrats failed to compromise in the final days of the lame duck session.
Now in the 2025 session, Republicans have been able to rally some Democrat support for adjusting the legislation. They will need significant support though to successfully pass the legislation, as Democrats continue to control the state Senate and governorship.
Currently set to go into effect Feb. 21, the minimum wage changes would also alter the wages for “tip credit” jobs, which allows employees to be hired for less than minimum wage but earn tips. The tip credit will be eliminated in stages, just as the minimum wage will be raised incrementally to $15-per-hour, starting in 2025 and going through 2029.
The other controversial legislation the committee is hoping to address is changes on earned sick leave policies statewide, which will require every Michigan business to provide paid sick leave to employees. This policy will also go into effect Feb. 21 and would apply to all employees, including seasonal, part-time or temporary employees.
The bill package, House Bills 4001 and 4002, would leave the current 38% tip credit, while still incrementally increasing the minimum wage. It would also adjust the sick leave policy to only apply to businesses with 50-plus employees.
While the current legislation set to take effect has faced a substantial amount of criticism from business owners, advocacy groups and workers, advocates for the legislation say it is necessary to strengthen economic security for low-wage workers.
“Instead of undermining the economic security of tipped workers, Michigan policymakers should take steps to make the phase-out of the tipped minimum wage as smooth as possible for businesses, workers, and consumers,” said Sebastian Hickey of the Economic Policy Institute. “Despite resistance from business lobbying groups and conservative lawmakers, Michigan should maintain the court-ordered path to eliminate the tipped minimum wage and the exploitation it perpetuates.”
State Rep. Mai Xiong, D-Warren, called for a “balanced approach” to address the issue and business concerns, which is especially important in Michigan where its “economy has unique challenges.” She acknowledged that might mean “potentially coming up with new legislation to address these concerns.”
“While this is a win for workers, I know this transition will be challenging for businesses,” Xiong said. “Workers need fair, predictable wages to make ends meet . . . Businesses need solutions that keep their doors open and employees on the payroll.”
