WXMI — A court of claims judge released an opinion on Tuesday stating that what the Republican-led legislature did in 2018 — adopting and amending a pair of initiatives — was unconstitutional.
The Michigan Restaurant and Lodging Association said that if the ruling is upheld it’ll have immediate impacts on the hospitality industry.
“The restaurant industry, hotels as well, have been through an awful lot the last two years. And to flip a switch and immediately for restaurants lose the tip credit — be one of the very few states that all of sudden don’t have a separate wage for tipped employees — would have catastrophic impacts to this industry,” said MRLA President and CEO Justin Winslow during a Zoom interview with FOX 17 on Wednesday. “From what we’re hearing from members they’d be laying-off about one out of every three servers that they employ right now.”
Winslow said that could be as many as 50,000 employees in the state. MRLA currently has 5,000 members, from restaurants and bars to hotels and resorts.
He said since last night's ruling, many have already expressed that if it's upheld they won’t be able to survive.
“It’s more challenging now than it has ever been, coming out of a terrible pandemic to a once-in-a-generation level of inflation that’s making profitably virtually impossible,” Winslow said. “We saw basically two-thirds of our members saying recently that they’re less profitable now than they were six months ago. You put this on top of it and the math just doesn’t work anymore to try to keep their doors open.”
Specifically, Judge Douglas Shapiro ruled that the legislature in 2018, which adopted The Earned Sick Time Act and The Improved Workforce Opportunity Act and then amended it, violated the state’s constitution.
The ruling reinstates efforts to raise minimum wage to $12 an hour and require employers to provide paid sick leave.
Unions and worker rights advocacy groups, like the AFL-CIO, called it a win. Michigan President Ron Beiber said in a press release yesterday that “Today's announcement is a huge victory for Michigan's working families and every working person in our great state.”
“Wages are going up in the state as a consequence of the tight labor market and so we’ve seen increases in wages,” said employment lawyer Brad Glazier. “But, that doesn’t happen across the board. And so it’s going to particularly help those employees that are in occupations that don’t pay significant wages.”
Glazier, a trial attorney with Bos & Glazier PLC, said it’s too early to make final judgments about the ruling. However, he foresees the Michigan Supreme Court getting involved.
“This was a decision that already went to the Michigan Supreme Court once and the Michigan Supreme Court declined to take on the case. At that point they were trying to get the Michigan Supreme Court to offer an opinion just on the fact that the legislature had done this,” he said during a Zoom interview with FOX 17. “There wasn’t a formal lawsuit that had been filed. Now that lawsuit has been filed and we have a decision. So, we will certainly see appeals and ultimately I think the Michigan Supreme Court will be the one to make a decision on this.”
Winslow said servers right now are making $24/hour and that continues to increase. Nevertheless, he'll be keeping a close eye on how things fold.
“Before we go full five-alarm fire, I think we do need to wait and see if a stay is granted, which seems likely but nothing is guaranteed until it actually happens,” Winslow said. “We are monitoring very closely. That would give some breathing room for this industry.”
