State Rep. Dave Prestin on Thursday issued the following statement after the Michigan Supreme Court ruled that the minimum wage must be raised to $15 by 2030, that the tip credit must be eliminated, and that employers must provide employees with costly new paid leave benefits. The changes begin to go into effect on Feb. 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. During the same legislative session, the Legislature then amended those laws to ensure they would not result in mass layoffs and business closures throughout Michigan. Later, a collection of 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 illustrates the dire consequences we’ll see if the radical changes in the 2018 proposals are allowed to 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 be forced to hike prices, with many anticipating increases of 20% to 25% 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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