(Source: MIRS.news, Published 07/31/2024) Michigan's $10.33-an-hour minimum wage will increase from around $12.25 to $12.30 an hour and tipped workers will see their base wage go up from $3.93 an hour to around $5.90 an hour by Feb. 21, 2025, under a Supreme Court ruling on Wednesday. 

The tipped wage will be phased out over five years. By 2030, all employees should be around a $15-an-hour minimum wage, based on calculations made from the court's decision. 

In ruling that the Legislature doesn't have the constitutional authority to adopt a ballot initiative and then immediately amend it, the Supreme Court laid out an implementation schedule that mirrors what framers of the 2018 initiative had in mind, adjusted for inflation. 

The framers envisioned a $10 minimum wage going into effect 205 days from its adoption. Likewise, 205 days from the decision in Mothering Justice v. Attorney General is Feb. 21, 2025. A $10 minimum wage today is $12.29, according to an online inflation calculator used by MIRS. The inflation rate used to set the wage will be calculated by the Department of Treasury, which is still reviewing the decision, according to a spokesperson. 

The tipped wage in the first year of the One Fair Wage initiative was 48% of the minimum wage. This percentage will gradually increase until it's 100 percent by 2030. That puts the tipped workers at about $5.90 an hour in 2025, about $7.85 an hour in 2026 and onward until about $15 in 2030. 

The above numbers are rough estimates. The Department of Labor and Economic Opportunity (LEO) and the state Treasurer are working together to calculate the official inflationary adjustments to the minimum wage, which will be released at a later time. 

“We are committed to collaborating with the labor and business communities on educational outreach to ensure a thorough understanding and smooth implementation of the court’s ruling,” said LEO spokesperson Jason Moon. 

Likewise, the new paid sick leave policy – which allows all employees one hour of paid sick leave time for every 30 hours worked – will go into effect 205 days from the court ruling, which is Feb. 21, 2025. Under the new policy, an employee can use up to 72 hours or about nine eight-hour days of paid sick leave a year. 

“This is a great day for the more than 494,000 workers in Michigan who are getting a raise," said One Fair Wage President Saru Jayaraman. "We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top.” 

Jayaraman said the ruling means Michigan will be the eighth state, and the first east of the Mississippi River, to end the separate tipped wage for workers and the first state in more than 40 years. 

“It's clear tipped workers don’t just need a tax exemption – they need living wages with tips on top,” he said. 

One Fair Wage was scheduled to hold a celebratory event Wednesday afternoon in Detroit. 

The culture change away from tipped wages will be “devastating” to restaurants and other establishments that rely on tipped workers, said Wendy Block, senior vice president of advocacy for the Michigan Chamber of Commerce. 

“We should expect nothing less than the closure of restaurants across Michigan and a reduction in workforce,” she said. 

Likewise, the new “one size fits all” earned sick leave policy is not likely to work out in employees' favor, she said. By creating a separate sick leave policy, businesses will be saddled with a “costly and administrative burden” 

“It's hard to imagine how businesses big and small will make these changes without cutting back drastically elsewhere,” Block said. 

A coalition of tipped workers called Save MI Tips reported that 2,900 jobs were lost in Washington D.C. in the year after the tip credit was eliminated there. They are estimating 45,000 Michigan servers and other employees will lose their jobs as a result of this decision. 

The Michigan Retailers Association said the 205 days gives the legislature time to make the “necessary updates to some of the most egregious components of the law.” 

Tom Lenard, Michigan Director for the State Innovation Exchange and member of the MI Time to Care Coalition, said in response: “Every worker in Michigan benefits when they have access to paid sick days and higher wages. What we’ve seen in state after state is that these types of policies support families and the economy. Scare tactics by corporate business lobbyists should be called out for what they are - weird, weak, and wrong.”