Thumb Reporter

State Rep. Matthew Bierlein this week led a roundtable discussion in Frankenmuth addressing hurdles facing Michigan’s small businesses, including the potential elimination of the tipped wage credit and new mandates for wages and sick leave.

Over 20 different restaurants and small businesses from throughout the region were represented at the meeting. Bierlein was joined by Wendy Block, Senior Vice President of Business Advocacy at the Michigan Chamber of Commerce, and John McNamara, Vice President of Government Affairs at the Michigan Restaurant and Lodging Association.

“There has been a tremendous amount of concern with what these new laws will mean for our vital restaurant industry and small business sector,” said Bierlein, of Vassar. “I have heard from many hardworking people who wonder if they’ll still have their doors open this time next year, or if they’ll have to lay off staff who have been with them for years. I want to keep small business owners and workers throughout our area informed as to what these laws mean, the impacts they’ll have and what we should be doing legislatively to fix it – and I remain committed to working with all sides in the Legislature to make sure we find a fix that respects both workers and local businesses.”

One concerned business owner in attendance, Monica LeValley of Thumb Meat Market in Caro, said changes to Michigan’s sick time laws will undoubtedly force her to close her family-owned country market that has been a tradition in the community for nearly 45 years. Amy Zehnder-Grossi of Frankenmuth Bavarian Inn Restaurant also laid out the dire nature of the changes set for February.

“Who wins in this situation? If these laws go into effect, service levels will suffer, prices will increase, businesses will close, jobs will be eliminated and our tipped team members will earn less,” Zehnder-Grossi said. “We are asking our lawmakers on both sides of the aisle to come up with a viable solution that will benefit our entire state.”

A recent Michigan Supreme Court decision will raise the minimum wage and eventually eliminate the tip credit for servers, bartenders, and other workers who frequently make more with tips than they would through a higher minimum wage. In 2018, the Michigan Legislature took action by adopting 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 struck a balance by fostering economic growth while protecting workers from layoffs or slashed hours.

A recent survey conducted by the Small Business Association of Michigan (SBAM) found that 78 percent of those surveyed said they’ve already increased pay at least five percent for their employees in the past year and 26 percent report pay increases of 10 percent or more – even as inflation has raised costs and created uncertainty. Additionally, seventy-nine percent of small business owners surveyed said they already offer flexible paid time off.

“Michigan’s small business community and restaurant industry have sounded the alarm about what these one-size-fits-all changes will mean,” Bierlein said. “We can’t keep our heads in the sand and pretend this won’t be a disaster for our local economies as businesses close and livelihoods are idled. We need a constructive way forward.”