Michigan lawmakers strike deal on wages and tips — but not sick leave, yet
LANSING — Michigan’s Democratic-led Senate and Republican-led House appear to have reached a deal to accelerate a court-ordered minimum wage increase but retain the state's lower base pay rate for tipped workers.
But the wage plan, as written and approved by the Senate late Thursday in a bipartisan 20-12 vote, can’t become law unless the two sides strike a separate deal on paid sick leave rules set to take effect Feb. 21.
As part of the wage agreement, the state would not phase out its subminimum wage for tipped workers, as ordered by the Michigan Supreme Court. Instead, that lower wage — currently $4.01 an hour — would rise to 50% of standard minimum wage by 2031.
The standard minimum wage, currently $10.56, would jump to $12.48 an hour later this month, then $13.73 in 2026 and $15 by 2027. The rate could then automatically rise with inflation in future years.
The plan would raise the minimum wage more quickly than required under last summer’s court order, and “that is good for Michigan workers," said sponsoring Sen. Sam Singh, D-East Lansing.
The move to amend Michigan’s wage laws comes nearly one week ahead of the implementation deadline for a state Supreme Court order that would raise Michigan’s minimum wage to $15 by 2029 while slowly phasing out the subminimum wage tipped employees make.
Republicans, restaurant groups and some workers have urged preservation of the "tipped credit," arguing its elimination could force owners to raise costs or close while discouraging tips that many servers rely on.
“This is a first step in finding a solution to save the businesses that make Michigan great," Senate Minority Leader Aric Nesbitt, R-Porter Township, said in a floor speech.
The bipartisan wage deal had materialized over the "last few hours” prior to the roughly 8 p.m. vote, he said, calling for additional negotiations over the paid sick leave rules in the week ahead.
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In a rare move, Senate Majority Leader Winnie Brinks, D-Grand Rapids, put the wage bill up for a vote even though the majority of her caucus opposed it. Ten Democrats voted against the measure, while Brinks and seven others voted for it, joining most Republicans.
The vote infuriated One Fair Wage, the group that had initially proposed the wage rules as part of a 2018 petition drive that was quickly weakened that same year by the Legislature but recently reinstated by state's highest court.
"This is a blatant pay cut and betrayal of working people, and Michigan workers will remember exactly who stood with them and who sold them out and cut their wages," Saru Jayaraman, the group's president, said in a statement.
Others praised the compromise, including John Sellek, a spokesperson for a group called Save MI Tips that fought to preserve the tipped credit.
"Tonight, Michigan servers and bartenders can sleep a little easier knowing a bipartisan legislative solution to the impending tip credit crisis is a big step closer to reality," Sellek said in a statement.
The Senate wage deal is similar to a compromise floated earlier this week by Republican House Speaker Matt Hall, R-Richland Township, who effectively had offered a middle ground between the policy the House already passed and a plan from Senate Democrats.
Hall praised Thursday night’s Senate vote in a statement, but he urged Democrats to also adopt a paid sick leave compromise he floated this week. Among other things, he proposed exempting small businesses with fewer than 10 employees from the pending sick leave law, which will otherwise require all businesses to provide five to nine days off per year.
“Tonight’s vote is a step in the right direction, but Michigan workers can’t afford more delays,” Hall said. “I put forward a sick time benefits plan that works for everyone — now it’s time for Senate Democrats to do their part. The deal is on the table, and we can get this done now.
“No more stalling, no more delaying — let’s protect Michigan workers and solve this crisis before next Friday’s deadline.”
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