State Representative Bill G. Schuette today voted for bipartisan legislation that safeguards the tip credit system for service industry workers and other employees throughout Michigan.

“House Republicans prioritized this issue for the last several months because of the overwhelming number of workers and small business owners who have been clear about the consequences last summer’s Michigan Supreme Court ruling would bring,” Schuette said. “This legislative compromise isn’t perfect, but allowing the Court’s decision to become effective starting Friday would be disastrous. It would result in workers being laid off and small businesses who have been staples in our communities for generations having to shut their doors for good.

“I’m hopeful this agreement sets the table for more cooperation on the sick leave portion of the Court’s ruling, which will also have drastic impacts on people’s livelihoods and our local businesses if Lansing fails to deliver solutions.”

Senate Bill 8 maintains the tip credit at 38% through 2025 while implementing annual increases, eventually capping at 50% of the minimum wage in 2031. The plan also heightens the penalties for employers who fail to fairly compensate their staff.

SB 8, which now heads to the governor’s desk, is legislatively tied to a bill to address the paid sick time issue, meaning both would have to be signed into law for either to take effect. Schuette noted that binding the bills together incentivizes the Legislature to deliver full, needed changes instead of half measures and further delays. Negotiations continue on reforms to the sick time policies.

Schuette has spearheaded efforts to prevent massive job losses and economic catastrophe in the face of the Court’s ruling. He chaired the House Select Committee on Protecting Michigan Employees and Small Businesses and oversaw the advancement of House plans that saved the tip credit and developed commonsense sick leave reforms. The tip credit plans were incorporated into what ultimately went to the governor, and hearings on the bills spurred urgency after months of inaction.