Michigan Legislators Propose Increasing Tipped Minimum Wage

Michigan is the latest state to consider raising the tipped minimum wage. At a press conference on Tuesday Senator Coleman A. Young II, a Democrat from Detroit, and Representative Pam Faris, a Democrat from Clio, announced they would introduce joint legislation to incrementally increase Michigan's tipped minimum wage. The proposal follows similar legislation in other U.S. cities and states that has either raised the tipped wage or eliminated it completely.

"A majority of these sub-minimum wage jobs are held by minorities, women, and single parents, and they're paid so little that many are still in poverty and dependent on government assistance," said Representative Faris. "This legislation to increase the wages of these workers will create equality, stability, and independence for them while benefiting our economy and state budget as well."

Currently, Michigan's restaurant owners are permitted to pay a tipped minimum wage of $3.10 per hour provided the restaurant worker makes at least $8.15 per hour (the state's hourly minimum). If workers do not make at least $5.05 in tips per hour on average, employers are required to pay the difference.

The bills will call to fully eliminate tipped minimum wage in Michigan by 2018.Young and Faris's proposal would see Michigan's tipped wage raised incrementally over several years with the first increase on January 1, 2016 to 59 percent of the general minimum wage and the second on January 1, 2017 to 80 percent of the minimum wage. Finally, by 2018 the bills will call to fully eliminate tipped minimum wage in Michigan.

Restaurant Opportunities Centers United (ROC-United) has come out in support of the legislation. In a press release, ROC-United points out that of the approximately 160,000 tipped workers in Michigan, 75 percent of them are women. According to the group, tipped workers in Michigan live in poverty at three times the rate of other workers in the state. "The lower, separate minimum wage for tipped workers is unfair and problematic — it exacerbates sexual harassment and discrimination, and because living off tips is incredibly unstable, tipped workers deal with major obstacles like not being able to produce proof of stable income for rental applications," said Alicia Farris, director of ROC-United's Michigan chapter.

In contrast, the Michigan Restaurant Association (MRA) released a statement condemning the proposal: "Apparently Senator Young and Representative Faris saw the lowest unemployment in Michigan in over a decade and decided something must be done to stop it. Eliminating the tipped minimum wage is a surefire way to kick the second largest private employer in the teeth and quickly shed some of the 415,000 jobs it provides."

Michigan's tipped minimum wage was raised last September from $2.65 per hour and is currently set to increase alongside the hourly minimum wage yearly with inflation.

"Eliminating the tipped minimum wage will dramatically increase their overhead and unequivocally cause some restaurants to shutter their doors," the MRA stated.

Are you a restaurant owner or worker? What's your take on the proposed tipped minimum wage increases?  Let us know in the comments or drop us a note at the tipline.