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State Rep. Matthew Bierlein today expressed concern over a Michigan Supreme Court ruling that will impact local job providers, their employees, and consumers across the state.

The decision raises the minimum wage and eventually eliminates the tip credit for servers, bartenders, and other workers who often earn more through tips than they would with a higher minimum wage. In 2018, the Michigan Legislature adopted two citizen-initiated laws to ensure that a minimum wage increase and new paid sick leave rules worked for all Michiganders. Amendments to these laws aimed to balance economic growth while protecting workers.

“Unfortunately, this decision will hurt small businesses – especially our restaurant industry – and force them to either cut their hours or lay off hardworking people,” said Bierlein, of Vassar. “It will also force many small businesses to raise prices to help make ends meet, meaning costs will be passed down to Michigan consumers at a time when people’s budgets are tight and the cost of everyday expenditures is already high. This short-sighted ruling will have a chilling effect on our local businesses and our local economies. Workers who are laid off won’t be able to benefit from wage increases or mandatory paid sick leave.”

A recent survey by the Michigan Restaurant and Lodging Association highlights potential consequences of implementing extreme elements from the original proposal as mandated by the Supreme Court. More than 92% of restaurants indicated they would need to hike prices, with many anticipating increases of 20-25% by early 2025. Sixty-six percent of restaurant owners said they would need to lay off employees, and 20% stated they might shut down.

Bierlein also referenced similar minimum wage laws enacted earlier this year in California for fast food workers that resulted in closures, layoffs, reduced hours, and an increase in self-service kiosks.

The changes are set to go into effect on Feb. 21, 2025. Bierlein emphasized that it is crucial for Democrats holding majorities in the House and Senate to collaborate with Republicans on common-sense reforms to prevent significant harm to local job providers and economies due to the Court's decision.

“We have just a few months to stand up for our vital small business sector and their hardworking employees before these changes take effect,” Bierlein said. “Our local job providers have been through the wringer over the last few years. We must act now to avoid this court decision dealing them another blow.”