LANSING, Mich. (Michigan News Source) – Two bills aimed at saving the tip credit and protecting small businesses from new sick time mandates passed the Michigan House on Thursday with bipartisan support.
Order up.
House Bill 4001 ensures the tip credit is maintained at 38%. It aims to protect the livelihoods of servers and bartenders who prefer the tipped wage over increased minimum wage because it gives them more potential earning power. It protects businesses from new expenses that many in the hospitality industry said would lead to massive layoffs and closures.
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Its companion bill, House Bill 4002, allows workers and small businesses to retain the paid leave options that work for them.
Check please.
The Democrat majority refused to take up the issue in the waning days of their lame duck session last month. The Michigan Supreme Court issued a ruling in 2024 that would change tipped wages and mandate new sick time policies if the legislature did not intervene.
Republicans said then House Speaker Joe Tate reneged on his promise to address the issue. After that, Republicans walked out of session. Democrats refused to move that legislation forward, and one of their own, Rep. Karen Whitsett (D-Detroit) refused to come to session because her own bills were not getting taken up by her own party. That kept the Democrats from a quorum and the lame duck session ended with a thud.
Republicans took over the House majority on Jan. 1.
Lawmakers weigh in.
Democrats offered a dozen amendments to the bills, but none of them were taken up.
One lawmaker, Rep. Dave Prestin (R-Cedar River), spent some time as a worker in the service industry. He voted in favor of the bills base on his experience. “It’s simply impossible to take your budget from last year – probably already razor-thin considering inflation right now – throw in a 50% increase in expenses and still expect to operate successfully,” Prestin said, referring to the tight budgets most restaurants and small businesses in Michigan are facing currently. “Without legislative action, independent restaurant and small business owners across Michigan, especially in the U.P., will be forced to make these excruciating decisions or shut down entirely. It cannot be allowed to happen.”
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Fellow Rep. Parker Fairbairn (R-Harbor Springs) also voted in favor of the bills. He said he used his “large chunk of time” between election day and taking office on Jan. 1 to talk with constituents. “I spent every second I could meeting with tipped workers and small business owners,” Fairbairn said. “The stories I heard and input I received from folks across Northern Michigan and the U.P. were invaluable when it came time to consider the legislation we passed today.”
Rep. Cam Cavitt (R-Cheboygan) wants to send a clear message to small businesses and restaurant owners: “Republicans in the state House are fighting for you.”
What’s next?
Both bills now move to the Senate for further consideration. Time is of the essence, since the bills have to pass the Senate and make it to Gov. Gretchen Whitmer’s desk before the rules take effect on Feb. 21.
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