40%
Restaurants Losing Money
​
40% of restaurants are not profitable in today's operating environment.
70%
Worse Is Yet To Come
​
70% of restaurants in Michigan believe the operating environment over the next 12 months will be worse than today.
67%
Fewer
Jobs
​
If the tip credit ends, 2/3 will lay off employees with an estimated 40,000-60,000 restaurant jobs lost.
20%
Restaurants Would Close
​
If the tip credit ends, one-in-five full-service restaurants would close permanently.
A 2024 operators survey shows their fears about the industry today and if the tip credit is eliminated:
WHY YOUR RESTAURANT IS
AT RISK:
THE PROBLEM
On July 31, the Michigan Supreme Court ruled that the adopt-and-amend strategy, which was utilized during the 2018 legislative session for the Minimum Wage and Paid Sick Leave ballot proposals, was unconstitutional.
This decision repeals 2018 PA 368 (Improved Workforce Opportunity Wage Act) and 2018 PA 369 (Paid Medical Leave Act) effective February 21, 2025.
On Feb. 21, the minimum wage is expected to increase to approximately $12.40 per hour and the tipped minimum wage would be 48% of that wage. The tip credit would continue to be phased out by 2029 and wages would rise to somewhere near $13.50 per hour in 2028. Thereafter, the minimum wage will increase by the rate of inflation and the tip credit will be eliminated.
THE DAMAGE
Without a legislative solution, operators would have no choice but to adjust resulting in an economic tsunami of 60,000 jobs lost, higher menu prices for families and thousands of closed restaurants with empty storefronts.
THE SOLUTION
This is an existential, all-hands-on-deck moment for our industry and a top priority for the Michigan Restaurant & Lodging Association. The MRLA is actively working with lawmakers to find a legislative solution that protects our hospitality industry from the most damaging impacts of this ruling before it goes into effective on February 21. To keep our industry from keeling over, we must band together to make our voice heard loud and often. We ask you to share your voice in calling upon Michigan legislators to pass a reasonable legislative solution and share your story of how this ruling will impact your business.
OPERATORS' FEAR FOR
THE FUTURE OF THE INDUSTRY
SMALL BUSINESS
We are a small independent family restaurant. We pay good wages, free health care and bonuses. If this goes through this could be the tipping point for us.
THE AMERICAN DREAM
The American dream of owning your own business will be going away permanently with these changes. They will only hurt the people they claim they are helping.
LOWER WAGES FOR SERVERS
Our servers & bartenders make at least $20 per hour in tips alone and this is on a very slow day. They average between $27-35 per hour...The servers are worried that people will stop tipping as well if our prices increase.
