Arlington, VA – Today, the Michigan Supreme Court ruled that the legislature’s use of an ‘Adopt and Amend’ policy to amend a proposed $15 minimum wage ballot measure was unconstitutional. The ruling paves the way for the state to bring the minimum wage to $12 by February 2025 and to $15 within three years, while raising the tipped minimum wage by a radical 313%.
Legislators on both sides of the aisle are already calling for a remedy to today’s ruling, citing the negative impact the new wage law will have on small businesses in the state. Tipped workers have overwhelmingly voiced a preference for keeping the current tipped wage system and opposed tip credit elimination.
“Today’s Michigan Supreme Court ruling means small businesses will soon be straddled with skyrocketing labor costs,” said Rebekah Paxton, research director at the Employment Policies Institute. “Reinstating this misguided proposal means tens of thousands of employees will lose their jobs and small businesses will shut down completely. The legislature must act on a new fix before the court’s timeline runs out.”
Background:
- Research from the Employment Policies Institute shows that a $15 minimum wage with full tip credit elimination will cost the state over 43,000 jobs and more than $48.2 million in lost employee earnings;
- In 2018, the Michigan legislature adopted a proposed ballot measure to raise the state’s minimum wage to $12 per hour by 2022, and eliminate the tip credit by 2024. The legislature then voted to push out the target date for the minimum wage hike up to $12.05 by 2030, and protect a tip credit equal to 38% of the regular minimum wage.
- In 2021, activist groups challenged the constitutionality of the legislature’s ‘Adopt and Amend’ policy.
- The Michigan Court of Claims ruled in 2022 that the move was unconstitutional, saying the legislature could either enact a law, reject it, or propose alternatives, but could not amend a law outright.
- Last year, the Court of Appeals reversed the decision, saying the legislature can adopt and amend a law, as long as both processes occur within the same session.
- Finally, the Supreme Court reversed the Court of Appeals decision.
- The wages will be brought to about $15 per hour by 2028 with full tip credit elimination by 2029 and adjusted for inflation thereafter.