tipped employee wages

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On January 26, 2023, the Michigan Court of Appeals reversed the lower court decision that would have gone into effect on February 19, 2023. That decision, among other items, would have increased Michigan’s hourly minimum wage to $13.03 and would have greatly expanded the state’s paid sick leave requirements. The Court of Appeals decision means that employers do not have to make changes to their paid sick leave policies that were drafted in compliance with the Michigan Paid Sick Leave Act that went into effect in 2019. Further, businesses no longer have to scramble to adjust minimum wage rates for both tipped and non-tipped workers as required under the lower court decision. Michigan’s hourly minimum wage will remain at $10.10. The tipped minimum wage remains at $3.84 an hour. 

On July 19, 2022, in the decision, Mothering Justice et al., v. Dana Nessel et al. (Nessel), the Michigan Court of Claims (Court)  held that in 2018 the Michigan Legislature unconstitutionally amended two voter-initiatives, the Earned Sick Time Act, PA 338, and the Improved Workforce Opportunity Wage Act (IWOWA), PA 337, by amending the proposals in the same legislative session that the Legislature enacted the two initiatives. The Legislature’s tactic of adopting and amending the voter initiatives subverted the constitutional protections against “legislative interference with the People’s constitutional right of initiative.” The Court’s holding nullified the amendments to the initiatives, 2018 Public Act (PA) 368 (IWOWA) and 2018 PA 369 (renamed as the Paid Medical Leave Act), and reinstated the original, more expansive terms of PA 338 and PA 337.