How much should tipped workers make? Michigan court mulls minimum wage ruling

ROYAL OAK, Mich. (FOX 2) - How much the minimum wage increases next year in Michigan hinges on a Court of Appeals decision.

The court is hearing arguments about whether the legislature was allowed to adopt a minimum wage increase and then change it back, a process known as adopt and amend.

In 2018, the petition put together by One Fair Wage was approved which would have raised the state's minimum wage to $12 per hour by the start of 2022. It would also raise the minimum wage for tipped workers to 80% of the standard minimum wage in 2022, 90% in 2023, and ultimately match it in 2024.

Instead, in a lame-duck session pushed by largely Republican legislators changed it before it could go into effect. In 2018, the GOP-controlled Legislature engaged in "adopt and amend," a controversial and unprecedented strategy. To prevent minimum wage and sick time ballot drives from going to the electorate, after which they would have been much harder to change if voters had passed them, legislators approved them, so they could be made more business-friendly after the election with simple majority votes and the signature of the outgoing Republican governor, Rick Snyder.

In July 2022, a judge ruled that this was unconstitutional.

Under the law as originally approved by voters, minimum wage employees would be making $13.03 per hour in 2023 while tipped workers would be making $11.73 per hour. The Court of Appeals has until February to decide if this will happen.

While some workers are happy about the potential wage hike, other people don't want this to happen.

"They make better than you think," said Johnny Prepolec, the owner of Alchemi and Johnny's Speakeasy in Royal Oak. "I know the people at the Coney Island next door to me, and she could make $350 in a day."

Prepolec said he can't afford to pay the potential higher wages. 

The Michigan Restaurant & Lodging Association said the increase would have "disastrous effects" on the restaurant industry.

"The Michigan Court of Claims ‘Adopt-and-Amend’ ruling earlier this year caught many by surprise and has had the unfortunate effect of placing Michigan’s still-recovering restaurant industry in the middle of an avoidable crisis," said MRLA president & CEO Justin Winslow. "Through the release of our operator survey, it is empirically clear that without relief in court or through the legislature, Michigan’s restaurant industry is staring down pandemic-level closures and job loss in February when the ruling takes effect. As we look to the lame duck legislative session ahead, we are encouraged by the governor’s public acknowledgement that a reasonable legislative solution is the best option and are working with the legislature to ensure that such a solution reaches her desk before it is too late."

According to results from a survey the association conducted, 91% of respondents said they would increase prices, while 58% said they would be forced to lay off employees.