UP Gazette

State Rep. Dave Prestin issued a statement on Thursday in response to the Michigan Supreme Court's ruling mandating an increase in the minimum wage to $15 by 2030, the elimination of the tip credit, and new paid leave benefits for employees. These changes are set to begin on February 21, 2025.

“The hospitality industry is as American as baseball and apple pie. These systems have been in place forever, and this decision upends all of it,” said Prestin, who has worked in, owned, or operated restaurants for 27 years. “Every one of my friends in the industry who are still hanging on were just dealt a killing blow by the Michigan Supreme Court. There is no way to modify policies or procedures within your traditional sit-down restaurant model and make these changes work. Everything about this ruling is 100% catered to the fast-food industry. Your waitstaff will be left unemployed, as classic sit-down restaurants won’t have any customers left because the cost of a beer and burger will be so high that everyone will just stay home.”

During the 2018 session, the Legislature adopted two citizen-initiated laws that increased the minimum wage and created a new paid sick leave rule. In the same session, lawmakers amended those laws to prevent mass layoffs and business closures throughout Michigan. Later, progressive groups sued the state, arguing that the “adopt and amend” practice was unconstitutional.

“This decision reflects the weaponization of the legal system by shady special interest groups working against hardworking hospitality professionals,” said Prestin, R-Cedar River. “These changes will devastate tipped employees across the board. From golf caddies and valets to waitstaff and bartenders, they’ll see their take-home pay obliterated because of this decision. That’s if they keep their jobs, as the never-ending business closures and staff layoffs that started during the pandemic will only continue to get worse. The consequences of not fixing this are unacceptable. If we do nothing, the Legislature will be destroying the income source of students and working moms who need this money to survive. We have no other option. Lawmakers must return to Lansing and find a solution.”

A recent survey by the Michigan Restaurant and Lodging Association highlights potential consequences if these changes stand:

- 66% of restaurant owners say they would be forced to lay off employees.

- 20% would be forced to shut their doors.

- 42% would be forced to cut operating hours.

- More than 92% of restaurants would need to hike prices significantly by early 2025.

“These survey results are just a snapshot of what you will see statewide,” said Prestin. “When you get into rural communities, especially here in the Upper Peninsula, you’ll see small independent food and beverage establishments close at probably twice the rate of the rest of the state. This decision will affect their ability to get loans to improve their business or buy necessary equipment. We’re going to see businesses in our community affected far more egregiously than other places.”

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