Restaurants nervous as Michigan lawmakers debate paid sick time ahead of Friday deadline

(FOX 2) - Restaurants and small businesses are holding their breath as lawmakers inch toward a deal that would deploy a scaled-back wage law and replace a different one scheduled to go into effect Friday.

While deals have been struck on the minimum wage and tipped wage rate, there is no final agreement for earned sick time. Unless one is achieved, the original wage law will kick in.

Big picture view:

Lawmakers are getting close to a deadline to replace an incoming wage law that raises the minimum wage, minimum tipped wage, and earned sick time.

While the Michigan House and Senate have approved scaled-down versions of the first two elements, the third remains in limbo. And because one can't go into effect without the other, the Republican-majority House and Democratic-majority Senate are working to secure a deal before midnight.

Caught in the middle are small businesses and restaurants that say they would struggle to stay open if forced to pay the new wage rates.

"It's kind of up in the air right now as to how we're going to move forward with our waitstaff," said Jeremy Banfield, manager of Tavern on the Main in Clawson.

Dig deeper:

On Wednesday, the Michigan House approved a watered-down version of the tipped wage law. That follows the Michigan Senate, which passed the same bill last week.

The law would raise the minimum wage to $15 by 2027 - a year earlier than what the current law scheduled for Friday would do. It would also reduce the tipped wage rate increase, starting with 40% of the minimum wage in 2026. 

Those workers would earn 50% of the minimum wage by 2031 under the modified bill.

Also in play is how a change to how businesses compensate their workers for paid medical leave. The current law would require businesses with two to 10 employees to offer up to 40 hours of paid sick time. 

Businesses with more than 10 employees would be required to offer 72 hours of paid time off.

Speaker Matt Hall (R-Richland Township) has previously said a negotiated bill would ease the pressure on small businesses and protect them "from frivolous lawsuits."

Local perspective:

Without a deal, a tipped wage rate would eventually reach the same level as the minimum wage.

Restaurants like Tavern on the Main would find it difficult to pay workers at that rate.

"Paying minimum wage to every staff member instead of the tipped credit wage is going to make it - I mean it's going to make it almost impossible," said Banfield.

That would lead to layoffs for workers, like server Morgan Colley.

"I'm able to go to school and pay all the bills that I need to while being here right now," she said. "I do need this job."