Opinion | Legislature must act to preserve tip credit, save hospitality jobs

The clock is ticking. 

In less than one month, thousands of jobs will be at risk. 

We have known about this looming economic disaster for more than six months. 

Yet the leaders of the previous legislative session failed to even propose a solution. 

Instead of acting, they deflected, issuing statements like, “Our legal team will be reviewing,” and claiming they understand that “stability is essential for workers and small business owners alike.” 

But words alone won’t save these jobs.

And still, the clock keeps ticking. 

In July, the Michigan Supreme Court ruled to force changes to the state’s minimum wage laws and eliminate the tip credit system relied upon by thousands of hospitality industry employees. 

If enacted, these changes will set in motion one of the largest economic disasters our state has ever experienced. 

We know this because we’ve seen the effects of similar policies. In 2023, Washington, D.C., enacted comparable changes that led to the loss of more than 3,000 jobs. On a larger scale, the Michigan Restaurant and Lodging Association estimates that one in every five restaurants would close, and 50,000 jobs — 67% of this workforce — could be lost. 

These changes are set to take effect on Feb. 21.

Thousands of restaurant workers — a vast majority who tell me they are able to earn above the state’s minimum wage because of the tip credit system — have spent months calling on lawmakers to take action to save their livelihoods. 

In fact, the Michigan Restaurant and Lodging Association reports that 71% of tipped servers earn more than minimum wage, and most servers earn, on average, at least $25 per hour.

These aren’t just statistics or poll numbers, though; they’re the stories of real people across the state whose families will be impacted by these devastating mandates.

Following the July court ruling, I was able to participate in local forums where workers expressed their frustrations with the court’s decision. They appreciated the flexibility the job offered and the additional money for providing great service to their customers — proudly boasting that repeat customers ask for their section when they come in again. Bartenders have told me they can make more money in less time under the tip credit than the minimum wage system.

Thankfully, just weeks into the new legislative session, the newly elected House majority acted swiftly, passing bipartisan legislation to avert this oncoming economic disaster. 

Now, those bills will come to the Senate, where Democrats remain in charge of the legislative agenda. 

But time is running out. 

I stand ready, along with my Republican colleagues, to work across the aisle and get this legislation passed as soon as possible for the thousands of hardworking Michiganders who are counting on us. 

These properly scrutinized, bipartisan bills must be considered by the Senate and put to a vote with a sense of urgency. 

The final countdown is upon us. 

Feb. 21 is coming. 

Tick. Tock.