Hearing follows through on House Republican promise from previous term

State Representative Jamie Thompson today heard testimony from small business owners and their workers who are sounding the alarm on a looming Michigan Supreme Court mandate, while leading discussion on plans that keep the state from an economic disaster.

“Workers, small business owners and families are facing a looming cliff if the Legislature does not act,” Thompson said. “All of this heart-wrenching testimony laid that out as plain as possible. It is incredibly important that these voices were here today to fully illuminate the closures, layoffs, slashed hours, increased prices and many other issues that are inevitable if the Legislature does not act. House Republicans will continue to lead on this issue, just as was promised to end last term.”

Several small business owners and workers, including from Thompson’s House District located in Monroe and Wayne counties, detailed their stories and voiced their concerns regarding the dire consequences of the court’s ruling from last summer to the Select Committee on Protecting Michigan Employees and Small Businesses, which Thompson serves on. The decision, which goes into effect on Feb. 21, puts unrealistic mandates on small businesses regarding wages and sick leave while phasing out the tip credit, which provides a key source of income for workers and in often cases is more than an employee would make with an increased minimum wage – notably in the service industry.

Shadi Ayoub, who owns six Leo’s Coney Island locations in the greater Detroit area, said his grandmother came to America from Lebanon in the early 1980s and raised four boys by working in the restaurant industry, eventually saving enough money for them to open up restaurants of their own.

“It’s very important for people to realize what this industry can really provide for people that are coming up through it,” said Ayoub when speaking in favor of reforming the court’s ruling through legislation. “For that reason, I think people should really take a look at the system that we currently have in place and realize it’s worked for so many – and it will continue to hopefully work for so many going forward.”

Bills before the committee, House Bills 4001 and 4002, strike a needed balance between economic growth, protecting livelihoods and keeping Michigan’s vital small business sector from shutting its doors en masse. The plans preserve tipped wages, move toward a higher minimum wage and maintain the status quo for earned sick leave while ensuring businesses with low staff numbers are not harshly impacted by no-notice sick leave that would routinely leave them understaffed and overwhelmed.

Thompson and House Republicans have prioritized solutions to the court’s decision after House Democrats did not take up any legislation on the issue to close out the 2023-24 term.

One survey conducted following the Supreme Court’s decision disclosed that two-thirds of Michigan restaurant operators would need to lay off staff if the mandates are implemented. Additionally, 94% of businesses anticipated significant price hikes for consumers, and one in five full-service restaurants said they could close permanently.

PHOTO INFORMATION: State Rep. Jamie Thompson (right) listens to testimony on House Bills 4001-02 during a hearing on Tuesday, Jan. 14.