State Rep. Greg Markkanen 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.

“These out-of-touch justices just crippled every single small business on our side of the Michigan-Wisconsin border,” said Markkanen, R-Hancock. “What do we expect to happen when these changes take effect? People are going to get laid off. Family-owned businesses are going to close. They’re all going to pack their bags and escape to other states, where they don’t have to deal with these radical new rules. The Legislature must act before the Michigan Supreme Court becomes the single greatest contributor to population growth in Wisconsin.”

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. Later, a collection of progressive groups sued the state, arguing that the “adopt and amend” practice was unconstitutional.

“The vast majority of employees who work in customer service make the majority of their money on tips,” Markkanen said. “They’re rewarded based on the quality of their service. Democrats are worried Donald Trump is going to repeal the income tax on tips. So, to protect their precious tax revenue, they’re forcing wait staff to get their wages directly from the employer and avoid any future tax cut.”

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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