State Rep. Angela Rigas on Wednesday issued the following statement after a Michigan Supreme Court ruling that will raise the minimum wage, and eliminate the tip credit for servers, bartenders, and other workers who frequently make more with tips than they would with a higher minimum wage. The changes begin to take effect Feb. 21, 2025.

“Democrats continue to kill Michigan small businesses at a record rate,” said Rigas, R-Caledonia. “First with the pandemic shutdowns, then with historic tax hikes, and now this ruling from a partisan court that will be a death sentence for so many locally owned businesses. Democrats are celebrating this ruling as the right decision for Michigan. Only someone without a basic understanding of economics, capitalism, and prior business experience would praise this ruling.”

During the 2018 session, the Legislature adopted two citizen-initiated laws that increased the minimum wage and created a new paid sick leave rule. During the same legislative session, the Legislature then amended those laws to ensure they reflected the purpose of the initiatives and would not result in mass layoffs and shutdowns throughout Michigan small businesses. Later, a collection of progressive groups sued the state, arguing that the “adopt and amend” practice was unconstitutional.

“We cannot let these radical changes take effect. If we do, small businesses that have been staples in our communities for generations will be forced to close their doors forever,” Rigas said. “I worked as a server to pay my way through school. Thousands of young people won’t have that same opportunity if we don’t act. I hope my colleagues on both sides of the aisle can come together and recognize the urgent need to fix this mess. But don’t get me wrong, the radical justices that made this decision are responsible for every single business and job that doesn’t survive this entirely preventable crisis.”

A recent survey by the Michigan Restaurant and Lodging Association illustrates the dire consequences we’ll see if the radical changes in the 2018 proposals are allowed to stand:

• 66% of restaurant owners say they would be forced to lay off employees.
• 20% would be forced to shut their doors.
• 42% would be forced to cut operating hours.
• More than 92% of restaurants would be forced to hike prices, with many anticipating increases of 20% to 25% by early 2025.

Another survey found that 82% of Michigan restaurant servers wanted to keep the tipping system in place, and 79% worried about losing their job if the tip credit were eliminated.

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