State Rep. Mike Hoadley, of Au Gres, this week supported a bipartisan agreement that protects Michigan’s tip credit and establishes commonsense paid sick leave policies that work for both job providers and their hardworking employees.

Hoadley has been committed to providing a legislative fix for a Michigan Supreme Court ruling from last summer that put unrealistic wage and sick leave mandates on small businesses and threatened livelihoods across the state. The ruling also phased out the tip credit, which provides a crucial source of income for many workers – notably in the service industry – and allows them to make more than they would through a higher minimum wage.

“House Republicans have been sounding the alarm on this issue since that disastrous, short-sighted ruling came down,” Hoadley said. “Workers and small business owners in our communities were clear that these mandates were going to cost people their livelihoods and devastate our local economies. That’s why the reforms to fix these problems were the first bills that House Republicans introduced to start the current term.

“Unfortunately, Democrats in control of the House last term dragged their feet and this issue was not prioritized until just before the Court’s decision was set to become effective. We needed solutions so people could maintain their way of life while supporting themselves and their families. While this compromise is far from perfect, the plans do far better than what the Court’s decision would have done to our state.”

HB 4002 guarantees all workers have access to sick time, while simplifying the complex and overly strict rules that were set to go into effect, had this legislation not been passed. The new plan allows employers of all sizes to choose the sick time plan that works best for their businesses and to customize policies regarding “no call, no show” incidents, while safeguarding their livelihoods from baseless lawsuits.

A plan to protect tipped workers, Senate Bill 8, which Hoadley voted to advance on Wednesday, maintains the tip credit at 38% through 2025 while implementing annual increases, eventually reaching 50% of the minimum wage in 2031.

A recent survey of Michigan restaurant servers found that more than 80% wanted to keep the tipping system in place. Another survey of Michigan restaurant operators found that if the tipped wage were eliminated, more than 92% of restaurants would have to raise their menu prices, 66% would have to lay off some workers, and 20% would be forced to shut down.

After passage in both the Republican-controlled House and Democrat-controlled Senate, HB 4002 and SB 8 will become law with the governor’s signature.