District column: Upcoming court ruling could have huge consequences for Michigan restaurants

District column: Upcoming court ruling could have huge consequences for Michigan restaurants

By Sen. Thomas Albert, R-Lowell

An upcoming Michigan Supreme Court decision could have massive consequences for workers across our state — especially in the restaurant industry. Depending on how the court rules, we must be prepared to do what is needed to protect Michigan jobs and foster opportunities for residents.

The pending court decision relates to what has been coined the “adopt and amend” case.

In September 2018, while serving in the House of Representatives, I voted against adopting citizen-initiated legislation related to mandated minimum wage increases and paid sick leave in Michigan. My position was that we should have let the language go on the ballot and explain to voters why these nice-sounding liberal proposals would actually be harmful to many Michiganders. I also noted that “any changes made to the proposals this term could be tied up in the courts for years to come.”

Despite my objections, the initiative was adopted. Three months later, there was a vote to amend the proposal. I supported the amended language because it was much better policy than we would have otherwise.

I fully believe that the Legislature’s actions were constitutional, but there was always a risk that an activist court might not concur. Nearly six years later, we await a court decision.

The Supreme Court will first decide if the “adopt and amend” process was constitutional. If the court decides it was constitutional, then our current law remains in effect. If the court decides the process was unconstitutional, it is hard to tell exactly where the court will land. One thing we know for sure is that we would have a mess on our hands in large segments of the economy.

Right now, minimum wage in Michigan is $10.33 per hour. One exception to this rule is for tipped-wage employees — a portion of their wages comes from their employer and the rest they make up on tips. Employers must make up the difference if the combined income is below minimum wage. Under the current system, servers commonly earn wages well exceeding minimum wage.

Those working in the restaurant industry are terrified of the possible fallout of this court decision. If the court decides that the originally adopted language is the effective law in Michigan, then tipped wage employees must be paid a full minimum wage from the employer. This change would turn the restaurant industry upside down.

Possible changes include higher menu prices, more automation to reduce staff count, and altered tipping patterns.

Customers might tip less or not at all as they face higher prices and realize the employer is paying higher wages from the start. In the end, even many of the remaining workers — the ones who don’t lose their jobs — might not come out ahead.

The restaurant industry was crushed during COVID-19. Some establishments closed and never reopened, and many others have not fully recovered. The pending court decision could prove to be an even bigger disruption to business over the long run because, unlike during the pandemic, there are no federal funds available to help weather the storm.

The negative effects would extend beyond restaurants, as all job providers with entry-level wages could be impacted. Jobs could be consolidated or eliminated across the board, leaving those with the least income fewer opportunities to support their families.

The other initiative — mandated paid medical leave — could also be disruptive. Current law applies to businesses with 50 or more people, but changes could force the mandate upon small businesses with as few as one employee.

Mandating time off specifically for sick leave could remove flexibility for employees and employers to negotiate a leave policy more beneficial to their own circumstances. Some employees already have more flexible paid time-off that can be used for any purpose, but depending on how the court rules, employees could see a portion of their paid time-off benefit reduced in order to cover potential new sick leave requirements.

The implications of the upcoming court decision are huge. If our current law gets overturned, it is incumbent on the Legislature to clean up the resulting mess. Are Michigan Democrats, who currently control state government, prepared to walk back these failed liberal policies?

One-size-fits-all government mandates are bad for Michigan and result in a loss of opportunity and advancement for residents. I am committed to supporting free market policies that are proven to bring prosperity and opportunity for Michiganders.

State Sen. Thomas Albert represents the 18th District, which includes Barry County and portions of Allegan, Calhoun, Kalamazoo, Kent, and Ionia counties.

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