What minimum wage increase would mean for tipped workers in Michigan

‘I think people would be less inclined to tip’

Michigan’s minimum wage is now above $10 for the first time and many want to know what this increase would mean for tipped workers.

Minimum wage went up from $9.87 to $10.10 as of the new year in Michigan and it may jump even higher. What does this mean for the future of the minimum wage fight for tipped workers?

The Michigan Legislature looked to head off a ballot proposal back in 2018, and they changed what’s known as the “tip credit,” and that’s what sent this issue to the court.

Right now, there is a stay. This means the old tip system stays in place.

The restaurant industry, however, from servers to owners are bracing for big and expensive change.

21-year-old college student, Lauren Rhoney, is a server at Amore’s Grill and Spirits in Chesterfield. She makes the minimum tip wage of just under $4.

Many in Michigan don’t know this, but if servers like Lauren don’t get up to today’s new $10.10 minimum wage in tips, they’re supposed to, according to the National Federation of Business Michigan President Amanda Fisher.

“If they do not get enough in tips, the employer is required to make sure they are making the minimum wage,” Fisher explained.

Should the courts decide to change today’s system to require servers to make $12 or more an hour, it means a roughly $9/hour raise.

“Yeah, absolutely, if it was $9 an hour plus tips, I would be, ‘woah!’,” Rhoney said.

But Fisher warns it’s not that simple. “That is a hit that most restaurants will not be able to sustain. It’s gonna be your local mom-and-pop restaurants and diners. They’re just not gonna be able to afford this extra increase,” she explained.

Lauren isn’t so sure she’d make the same kind of money with the wage increase. “It would help with school, bills I have to pay and things like that, but I think people would be less inclined to tip,” she said.

The entire restaurant and hospitality industry is waiting to see what will happen.

The stay that’s keeping current law in place ends in mid-February so it is likely we will see something happen with a court of appeals ruling before then.

About the Author:

Rod Meloni is an Emmy Award-winning Business Editor on Local 4 News and a Certified Financial Planner™ Professional.