State Rep. Parker Fairbairn (R-Harbor Springs) sits in the House Select Committee on Protecting Michigan Employees and Small Businesses on Jan. 14, 2025. | Anna Liz Nichols
When Republicans in the Michigan House of Representatives took control of the chamber on Jan. 8, they immediately got to work, introducing legislation to preserve Michigan’s tipped minimum wage and moderate changes to the state’s paid sick leave policy.
Eight days later, that momentum has continued, as legislation sprang from a committee on Thursday morning.
Tasked with addressing impending changes to Michigan’s minimum wage and paid sick leave laws set to take effect on Feb. 21, members of the House Select Committee on Protecting Michigan Employees and Small Businesses — which was established before most other standing committees — closed out testimony Thursday with members voting nearly unanimously to send two proposals back to the House floor. Lawmakers are expected to vote on them as early as next week.
Over the summer the Michigan Supreme Court issued an opinion finding that 2018’s GOP-controlled Legislature subverted the rights of citizens by taking up two ballot initiatives and significantly amending them, reducing proposed increases to the state’s minimum wage, abandoning a phase out the sub-minimum tipped wage and exempting businesses with less than 50 employees from the paid sick leave requirements. As part of its decision, the court opted to restore the provisions eliminated by the Legislature.
Since the decision, small business and hospitality industry advocates have sounded the alarm, warning that the changes mandated by the Supreme Court would be the nail in the coffin for several struggling enterprises.
A 2024 survey from the Michigan Restaurant and Lodging Association found that eliminating the tip credit would force one in five restaurants in the state to close, alongside forcing layoffs resulting in the loss of 40,000 to 60,000 restaurant jobs.
Michigan Republicans have made countering these changes a top priority, with the first bills introduced in the House in 2025 seeking to retain the tipped wage alongside the current small business exemption from paid sick leave requirements.
House Bill 4001 — sponsored by Rep. John Roth (R-Interlochen) — would keep the tipped wage at 38% of the state minimum wage, abandoning the plan to phase out of the sub-minimum wage rate by 2030. It also reduces the proposed increases to the minimum wage, with the minimum wage set to increase to $15 at the start of 2029 compared to the schedule laid out in the incoming changes, which would raise the minimum wage to $14.97 by Feb. 21, 2028.
House Bill 4002 — sponsored by Rep. Jay DeBoyer (R-Clay) — focuses on changes to the state’s sick leave requirements. Under the changes required by the Supreme Court decision, employers with fewer than 10 employees must offer up to 40 hours of paid sick leave and 32 hours of unpaid leave while businesses with 10 or more employees must offer a full 72 hours of paid sick leave.
However, House Bill 4002 would exempt employers with 50 employees or fewer from the new paid sick leave requirements, and eliminates language permitting employees to take civil action if their employer violates the law.
Prior to voting on the proposals, members approved an amendment to House Bill 4001 from state Rep. Parker Fairbairn (R-Harbor Springs) reducing the current wage rate for employees under 18 from 85% to 75%, to account for increases to the state minimum wage.
“It’s important to note that even with this change, workers under 18 will still receive minimum wage increases as scheduled, starting on Feb. 21. However, we need to protect our businesses that often employ people in this age range, especially in northern Michigan and the Upper Peninsula,” Fairbairn said. “Businesses rely on these workers in this age group for seasonal work in the hospitality, agriculture and tourism industries. My substitute makes sure to protect both young workers and small businesses that rely on them.”
The committee also adopted changes to House Bill 4002 introduced by Rep. Jamie Thompson (R-Brownstown Twp.) to ensure chiropractors are included in the bill’s definition of health care providers, as some employers may require documentation when employees use more than three consecutive days of earned sick time. Thompson’s amendment also allows employees to roll over more than 72 hours of their sick time into the next year if the employer allows.
The committee shot down an amendment from Rep. Will Snyder (D-Muskegon) to retain the minimum wage increases outlined by the Supreme Court.
And the panel also rejected an amendment from Rep. Matt Longjohn (D-Portage) ensuring that employees who are not eligible for paid sick leave under House Bill 4002 receive one day of paid sick leave for themselves and their dependents to ensure they receive annual preventative care visits, alongside paid time for any follow up care their provider recommends.
Following the conclusion of the hearing, Rep. Bill G. Schuette (R-Midland), who chairs the committee, told reporters they could expect to see the bills on the House floor next week. Prior to the meeting, Schuette told Michigan Public he was confident the House would adopt changes to the tipped wage and paid sick leave laws before they take effect on Feb. 21.
The bills would also need to win approval in the Democratic-led Senate, which has introduced its own legislation, and be signed by Democratic Gov. Gretchen Whitmer.
John Sellek, spokesperson for Save MI Tips, which opposes the tipped-wage changes imposed by the Supreme Court, told the Michigan Advance that the group had to tip its hat to Schuette, House Speaker Matt Hall (R-Richland Twp.) and Roth.
“The House is setting a standard on one side, the Senate clearly is going to move in another direction. We knew this had to be a negotiated compromise. We need the governor to sign these bills. So we need Democrats and Republicans. So these are just the initial, I think, setting points. Any adjustments made today is with the end goal of being able to come to an agreement with the Senate,” said Sellek, a longtime GOP consultant.
While business groups offered a strong show of support for the bills in committee, the nonpartisan Michigan League for Public Policy (MLPP) warned these changes would strip paid sick time protections from nearly 1.5 million workers in Michigan.
MLPP President Monique Stanton said the changes to the minimum wage law would also harm workers struggling to keep up with the cost of living, and that tipped workers would benefit from the elimination of the tipped wage, pointing to other states with similar laws to those taking effect in February where servers fared just as well if not better than servers in states with a tipped minimum wage.
“We urge lawmakers to reject these harmful bills and instead uphold the minimum wage and paid sick time laws that the Michigan Supreme Court ruled on and that are set to take effect next month. Workers have been waiting since 2018 for these critical supports and we must make sure the current laws are upheld. When workers are healthier, better paid and less stressed, businesses thrive, communities prosper and our state becomes a stronger and more equitable place for all,” Stanton said.
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