An Update from Josh Lunger from the Chamber of Commerce

What Happened:

Yesterday the Michigan Senate passed changes to minimum/tipped wages (Senate Bill 8). This was the last day that the Senate could pass a first-chamber bill and still have it pass the House before the February 21st deadline.

 

What About ESTA?

The Senate adopted a substitute that “Tie-Barred” Senate Bill 8 to the House-passed ESTA bill (House Bill 4002).This means for the tipped wages to be passed and enacted, both bills must be signed into law. Since House Bill 4002 has already passed the House, it does not need to adhere to the 5-day layover required for first-chamber bills.

 

What You Need to Know:

A deal is still possible. The Senate would need to substitute compromise language into House Bill 4002 and send it back to the House.

 

I have spoken multiple times with the Majority Leader and House Speaker’s staff. The main barrier is likely to be the desire for a small business exemption by House Republicans and a lack of support for any blanket exemption by Senate Democrats.

 

Our Coalition is working to provide feedback on the latest drafts which have been focused on improvements to no call/show provisions, leave notice, reducing the administrative burden, and other provisions.

 

Could There Be a Pause?

The Governor signaled support for changes and urged the Legislature to delay to July 1 if no deal could be reached. Questions have been raised regarding legality, and our conversations with House and Senate leadership have indicated this is not an option.

 

What was in the Tipped Wages Fix?

The main component is keeping a tipped wage credit at 50% of the minimum wage. It would be phased in from the current 38% by 2031. The plan raises the minimum wage slightly faster than the mandate from the Michigan Supreme Court. It was interesting that the Senate passed this bill without a majority of Democrats in support – something majority parties rarely do.

 

More Information on this Week’s Events:
The Senate Committee on Regulatory Affairs advanced the two major bills: Senate Bill 15 (Earned Sick Time Act changes) and Senate Bill 8 (Minimum Wage & Tip Credit changes).

  • Tuesday: Committee members heard additional testimony on key ESTA concerns, including how employees provide notice for leave, exemptions for small businesses, and flexibility for employers who already offer paid time off (PTO).

  • Wednesday: The committee advanced SB 15 (Earned Sick Time Act changes) to the full Senate.

  • Thursday: SB 8 (Minimum Wage & Tip Credit changes) cleared committee. Speaker Matt Hall had a press conference announcing his compromise offer to Michigan Senate Democrats.

  • Thursday Night: The full Senate struck a deal on wages and tips and passed SB 8, tying it to House Bill 4002 (the House version of ESTA changes) —meaning they’ll have to pass together.

 

Please let us know if you have any questions – we will continue to provide updates as information is available!

Jessica Slaydon