GRAND RAPIDS, Mich. (Michigan News Source) – The Michigan Restaurant and Lodging Association (MRLA) is warning that one in five restaurants could close after the Michigan Supreme Court issued a ruling that eliminated the tip credit for servers and bartenders and opted for paying them a minimum wage.
The MRLA met with lawmakers in Grand Rapids and asked them to try to prevent the change from taking effect in February. The state Supreme Court ruled this summer that the 2018 then-Republican controlled legislature violated the law by adopting and amending a ballot proposal to raise the minimum wage and eliminate the tip credit.
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The GOP modified the proposal to keep the tip credit in place and lower the minimum wage hikes.
Justin Winslow, President & CEO of the MRLA, said the tip system is used in 43 other states. He said eliminating the tip credit will spiral into layoffs, price increases, and outright closures.
“The tipped minimum wage (loss) is so abrupt, so significant, and so a major part of this industry, that’s where the real chaos comes in,” Winslow said.
The minimum wage is currently $10.33 per hour and a tipped employee rate is $3.93 per hour.
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