Minimum wage and tipped workers to get a raise after Michigan Supreme Court decision

The Michigan Supreme Court has restored minimum wage and paid sick leave laws that were reversed by Republican lawmakers years ago—marking a big win for workers. 

MICHIGAN—In a 4-3 decision, the Michigan Supreme Court overruled the state Legislature on Wednesday to reinstate major changes to the state’s minimum wage and paid sick leave laws.

And that means tens of thousands of Michigan workers who earn minimum wage, as well as restaurant staff who rely on tips, are set to receive a series of pay raises over the next four years—to an hourly rate that will likely exceed $12 next year and keep climbing through 2028.

The decision also closes a longstanding loophole in state law that has enabled Republican lawmakers to sidestep Michigan voters by adopting (and then quickly watering down) citizen-led ballot initiatives, much like they did with a proposal to boost the state’s minimum wage in 2018.

The decision fell along partisan lines, with four justices aligned with the Democratic Party voting to reinstate the changes, and the three Republican judges voting against the decision. 

What’s the deal?

Under state law, Michigan’s minimum wage is currently set at $10.33 and scheduled for a series of annual increases to what will eventually reach a minimum wage of $12.05 by the year 2030. 

Michigan workers, however, have been fighting to accelerate that schedule for years.

In 2018, a citizen-led petition to increase Michigan’s minimum wage and enact new paid sick leave options for Michigan workers collected more than 280,000 signatures and was headed for the ballot in the November election. And had it been approved by voters, it would’ve gradually bumped up the state’s hourly minimum wage from what was then $9.25 to $12 by 2022. 

But at the time, the Republican-controlled state Legislature decided to sidestep the process and pass the initiative into law themselves—without ever allowing the issue to go up for a vote.

Then, after Election Day, the Legislature decided to change the plan altogether, including by slowing down the timeline for wage increases to the current schedule that’s outlined in state law. 

Lawmakers also eliminated pay increases for tipped workers and exempted many small businesses from the sick-leave law, which was designed specifically to help protect workers.

So what?

That’s unconstitutional, according to the Michigan Supreme Court. 

The process that was deployed by Republican lawmakers in 2018—known as “adopt-and-amend”—has been criticized as a sort of loophole in state law that allows the Legislature to intervene and essentially hijack an otherwise successful voter-led initiative.

Had voters been able to pass the original minimum wage petition into law, for example, the Legislature would’ve required a three-quarters vote to amend the proposal after it became law.

And had lawmakers proposed those amendments to water down the minimum wage law before Election Day, the state initiative process would have also required them to offer the changed version as a different option to voters, in addition to the original, citizen-led ballot initiative. 

Instead, the Legislature intercepted the ballot initiative and tweaked it into a version that was more friendly for businesses and much less considerate of the workers who initially designed it.

“Allowing the Legislature to bypass the voters and repeal the very same law it just passed in the same legislative session thwarts the voters’ ability to participate in the lawmaking process,” Justice Elizabeth Welch wrote in the majority opinion that decided the case this week.

Justice Kyra Harris Bolden, who is up for reelection this year, joined Welch in the majority opinion. 

And with two seats on the Court up for grabs in this year’s election, including Bolden’s, Democratic Party Chairwoman Lavora Barnes said the decision also highlights “the importance of electing judges who will uphold our democracy.”

“Decisions like these underscore how impactful our state Supreme Court is,” Barnes said. “The state Supreme Court is on the line this November, and a conservative majority would likely have no problem upholding the next dangerous MAGA Republican tactic to undermine the voters.”

What now?

As a result of this week’s Michigan Supreme Court ruling, the state’s minimum wage schedule now needs to be changed to include an immediate increase in February 2025.

The exact wage wage schedule for next year (along with annual increases) must still be determined by the state treasurer. The changes will also gradually eliminate a lower wage for tipped workers in restaurants, as well as require many businesses to offer paid time off.

The decision means Michigan’s $10.33 minimum wage will likely surpass $12 next year and continue to rise through 2028, and that the lower ($3.93) hourly tipped wage for workers will be completely phased out over the next four years, according to reports from Bridge Michigan.

What are people saying?

Michigan Attorney General Dana Nessel said the court’s decision represented a “landmark victory for Michigan voters” and a “resounding affirmation of the power of direct democracy.”

“The Legislature cannot manipulate its power to undermine the will of the people. This sends a clear message that elected officials cannot disregard the voices of their constituents,” Nessel said in a statement. “I am glad to see the Court recognize and respect that the people reserved for themselves the power of initiative, a crucial tool meant to shape the laws that govern them.”

Labor unions also praised the decision. Republicans “quite literally stole out of the pockets of Michigan workers” with the five-year legal fight, Michigan AFL-CIO President Ron Bieber said.

Some business groups predicted financial losses and other consequences if the Supreme Court overturned the work of the Legislature. Those warnings emerged again this week, with some restaurant groups claiming the changes will invariably lead to higher menu prices. 

But Mark Brewer, an attorney who argued the case, said critics are exaggerating their claims.

“The galling rhetoric was intended to scare the court into not doing the right thing,” Brewer said.

In a statement after the ruling, Michigan Senate Majority Leader Winnie Brinks (D-Grand Rapids) also said the Court’s decision will help to “mark a new chapter where legislators and residents alike will have a clear understanding of the citizen initiative process.”

“The Legislature has a responsibility to uphold the will of the people,” Brinks said. “The then-Republican majority made a deceitful bait-and-switch on the very people they were sworn to serve, and this lengthy battle was caused by their tactics.”

The Associated Press contributed to this report. 

READ MORE: The Will of the 8%: Michigan’s Legislative Loophole

For the latest Michigan news, follow The ‘Gander on Twitter.

Follow Political Correspondent Kyle Kaminski here.