LANSING, Mich. (Michigan News Source) – A Michigan Supreme Court ruling will increase the state’s minimum wage on Feb. 21, 2025 and institute a new paid sick leave rule.

In addition, the justices eliminated the tip credit for servers, bartenders, and other workers who frequently make more with tips than they would with a higher minimum wage.

What case brought about this ruling?

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The 4-3 ruling comes after the court ruled a legislative tactic used in 2018 referred to as “adopt and amend” is unconstitutional. During that session, Michigan’s Legislature adopted two initiatives that increased the minimum wage and created a new paid sick leave rule. The Legislature later changed those laws so the Restaurant Opportunities Center of Michigan, Michigan Time to Care, Mothering Justice and One Fair Wage sued.

Michigan’s current minimum wage is $10.33. It will increase to $12 per hour for regular and tipped workers in February.

The increases adjust to inflation and will continue through 2028.

What’s next?

The Michigan Restaurant and Lodging Association (MRLA) said last month that if the Michigan Supreme Court ruled in favor of increasing the minimum wage, it would plunge an industry “already on the edge” due to Gov. Gretchen Whitmer’s arbitrary COVID-19 rules “headfirst into the abyss.”

“[Wednesday’s] tone-deaf ruling by the Michigan Supreme Court strikes a likely existential blow to Michigan’s restaurant industry and the nearly 500,000 workers it employs,” said MRLA President and CEO Justin Winslow on Wednesday. “As our recent industry operations survey illustrated, 40% of full-servicer restaurants in Michigan are already unprofitable, meaning this decision is likely to force more than one in five of them to close permanently, eliminating up to 60,000 jobs along the way.”

Winslow also called on the Michigan lawmakers to get back to work. “We urgently call on the Michigan legislature to act swiftly, implementing a compromise solution that prevents this impending catastrophe before it is implemented.”

What about lawmakers?

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House Republican Leader Matt Hall (R-Richland Township) called on the Democrat-controlled Legislature to return to work immediately after adjourning on June 27. Hall argued, “This decision will completely disrupt the livelihoods of hard-working Michiganders. Restaurants and other small businesses will have to raise their prices, tipped workers will take home less pay, and some people will lose their jobs.”

Representative Cam Cavitt (R-Cheboygan) said the Michigan Supreme Court “got this wrong.”

“Judicial activists on the court disagreed with the common-sense solutions the people’s representatives developed, so they took it upon themselves to jam through a radical liberal agenda anyway,” Cavitt said.