Hundreds of servers rallied at the Michigan Capitol on Wednesday, urging lawmakers to “Save MI Tips” by altering upcoming changes to the state’s labor laws.

Grabbing a takeout meal or eating in Michigan restaurants next year will likely cost roughly 25% more under new minimum wage and paid sick leave rules set to take effect Feb. 25, according to a restaurant industry survey.

Restaurant owners and operators will bear higher costs next year because of a July 31 Michigan Supreme Court decision that let stand a policy of enacting a higher minimum wage, paid sick leave requirements and the phaseout of the tipped credit.

Brooke Champt works at a restaurant in Elk Rapids. She traveled to Lansing to urge lawmakers to fix upcoming changes to paid sick leave policy, the phaseout of the tipped credit and the minimum wage increase,

Champt has worked off and on in the service industry since 2006. Even after getting a master’s degree in social work, she returned to serving once she had a family. “The money is better,” she said,

With a tipped wage in place, Champt could work 30 hours in the service industry and make wages similar to or better than what she could by working 80 hours weekly as a social worker.

“I get to work fewer hours, enjoy more of my time with my family, and still be able to support a household,” she told Michigan Capitol Confidential.

Stores with a long history – not just bars and restaurants – have decided to close in Bay City because of the new rules, Rep. Timmy Beson, R-Bay City, told CapCon in an interview.

Bars and restaurants must offset these new costs by using kiosks or getting more takeout business unless the Legislature changes these rules, Beson said.

“When we lose our hospitality industry, our bars and restaurants, our small businesses because they can’t afford to be here anymore, there are going to be fewer people coming into our state. We’re going to get a bad name for not having enough places open,” Beson said.

Jeff Lobdell owns 22 restaurants and two hotels in Michigan. He said the new paid sick leave and minimum wage rules will devastate the hospitality industry.

“Everyone will have to adapt. Restaurants operate on a razor-thin margin,” usually between 3% and 9% of revenue, Lobdell said.

The new mandates will likely raise costs to restaurants by 20%, forcing restaurants to either dramatically raise prices, cut tipped employees’ hours, or go out of business, Lobdell said in a phone interview with Michigan Capitol Confidential.

He said the Legislature needs to “act swiftly” to keep the tipped credit and “reasonable rules” for paid sick leave.

A Michigan agency that distributes millions of dollars in subsidies is stonewalling a group seeking public records, according to a new lawsuit.

The Mackinac Center for Public Policy and Michigan Rising Action sued the Michigan Economic Development Corporation Sept. 12, alleging a violation of the Freedom of Information Act.

Michigan Rising filed a records request in late May, asking for the economic development corporation’s communications with American Lidar Inc., a Michigan company linked to the Chinese Hesai Group. The state agency distributes taxpayer-funded subsidies.

The MEDC responded on June 20, with a fee estimate of $593.48 and an estimated processing time of 16 hours to produce around 1,200 records.

Michigan Rising paid a 50% deposit on July 2, 2024, and the MEDC cashed the check on July 19, the lawsuit says. The agency did not produce any documents and failed to respond to follow-up inquiries, remaining uncommunicative until Aug. 29. On that date, it acknowledged it received payment but failed to provide an expected completion date.

“This is a willful effort to conceal from public inspection activities and discussions the MEDC is having that the public may not like,” said Abby Mitch, executive director of Michigan Rising Action. “This is a fair concern, as MEDC’s two flagship investments – Gotion and Ford CATL – have received nationwide public backlash. But the simple fact is that it should not take the threat of a lawsuit to get MEDC to follow the law.”

The MEDC’s conduct seems to violate Michigan’s transparency laws, which require official agencies to provide the public with prompt access to government records.

“The lack of transparency shown by the MEDC in this case is deeply troubling,” said Steve Delie, director of transparency and open government at the Mackinac Center. “Public records belong to the public. They should be readily accessible in a reasonable time period and at a reasonable cost. The delays our client encountered make it clear that the MEDC is falling short of that standard.”

The Michigan Economic Development Corporation declined to comment.