(The Center Square) – In nine days, minimum wage and sick leave policies first passed in 2019 will take effect in Michigan, unless the Senate takes action.
This comes after months of controversy, as bills that would adjust the legislation currently sit in Senate committee following passage by the House.
Democrats, who control the Senate, have not taken up the House bills. Yet, the Senate Committee of Regulatory Affairs is in the process this week of hearing testimony on the Senate versions of the bills. It is unclear when the committee will vote on those.
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.
In January, House Republicans were able to rally some Democrat support for adjusting the legislation, successfully passing bipartisan House bills to address business concerns with the new regulations. Senate Democrats also put forward their own version.
“Workers and business owners across Michigan are looking to leaders in Lansing to take action to save our tipped credit,” said Sen. Kevin Hertel, D-St. Clair Shores, who sponsored the Senate legislation in early Jan. “I’m hopeful we can work together to find common ground to support service industry workers and small businesses here in Michigan.”
Since then though, there has been little movement, leading to frustration from Republicans.
“House Republicans were able to bring thousands of tipped workers and small business owners to Lansing, hear their stories, and then get the bills through both committee and the House all in two weeks,” said Rep. Parker Fairbairn, R-Charlevoix, in a statement. “Three weeks later, the Senate has hardly begun the committee process for their own bills, let alone ours.”
Set to go into effect Feb. 21, the minimum wage increases will 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, starting in 2025 and going through 2029.
The other controversial legislation going into effect is changes on earned sick leave policies statewide, which will require every Michigan business to provide paid sick leave to employees. This policy would apply to all employees, including seasonal, part-time or temporary employees.
A decision from the Michigan Supreme Court last July is allowing these proposals to go into effect.
The House 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.
The Senate bill package, Senate Bills 8 and 15, would adjust the rate at which tip credit raises would be made, never fully eliminating them. It would also modify the sick leave policy changes.
While some research shows that businesses and jobs would be negatively affected, advocates for the legislation as-is 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.
