Republicans, Democrats offer bills to fix upcoming tip credit, minimum wage changes

Legislation before the Michigan House will fix imminent harmful change to the state’s paid sick leave and tipped wage law, supporters say, and lawmakers of both parties claim they have a solution to changes that could devastate restaurants, stores, nonprofits and others.

The Republican-controlled House could vote on House bills 4001 and 4002 as early as today.

Voter-initiated laws passed in 2018 force all businesses to provide paid sick leave and a higher minimum wage starting Feb. 21, though current legislative activities could modify those requirements.

Proposals to modify the impending changes are bipartisan, with Democrats offering Senate Bill 8 and Senate Bill 15 in the upper chamber, which they control.

Rep. Jamie Thompson, R-Brownstown, posted a side-by-side bill comparison on social media Jan. 12.

“Tip workers and restaurants testified today in committee that keeping (the law) as is, is crucial to the worker and the business,” Thompson told Michigan Capitol Confidential in a Jan. 14 email.

The looming laws don’t provide business owners flexibility, Thompson said.

A new law will require employers to give paid sick leave to all employees, CapCon has reported. Only state agencies are exempt.

House Bill 4002, introduced by Rep. Jay DeBoyer, allow employers to discipline employees for missing three or more consecutive workdays without notice. It also defines paid leave to include vacation, personal days, sick leave or paid time off.

HB 4002 exempts from sick leave law seasonal employees who work 25 weeks or fewer per year and part-time employees who work 25 hours or fewer per week. State employees, and certain employees of airlines or railroad companies

House Bill 4002 exempts small businesses and employers with fewer than 50 employees. It does not redefine what constitutes a small business.

The Senate version of the sick-leave bill, SB 15, redefines a small business to include employers with fewer than 25 employees. Current law defines a threshold of fewer than 10 employees.

House Bill 4001 and Senate Bill 8 both increase the minimum wage, though the House uses a slower schedule.

House Bill 4001 would use this schedule:

• Jan. 21, 2025: $12.00
• Jan. 1, 2026: $12.50
• Jan. 1, 2027: $13.00.
• Jan. 1, 2028: $14.00.
• Jan. 1, 2029: $15.00.

Senate Bill 8 would increase the minimum wage on this schedule:

• Jan. 21, 2025: $12.48
• Jan. 1, 2026: $13.73
• Jan. 1, 2027: $15.00.

Both House and Senate bills call for automatically increasing the minimum wage. The Senate version’s automatic adjustment take effect earlier (2028) than the House’s (2030).

The two bills differ in the mechanism for calculating inflation adjustments. The Senate bill calls for using the consumer price index for urban wage earners while the House bill uses a measure of inflation for the Midwest, which generally reflects the region’s lower cost of living.