October 07, 2022

Restaurant Law Center and Michigan Restaurant & Lodging Association file Amicus Brief to Protect Michigan’s Tip Credit

Lower court ruling would result in serious harm to the restaurant industry
Washington, D.C. – The Restaurant Law Center (RLC) joined the Michigan Restaurant & Lodging Association (MRLA) in filing a brief with the Court of Appeals for the State of Michigan to ensure the tip credit remains. The appeal concerns the Court of Claims’ decision that the 2018 voter-initiated statute, the “Improved Workforce Opportunity Act,” which both increased the minimum wage and phased out the “tip credit” was improperly amended by the state legislature. The MRLA and RLC argue the Michigan legislature acted within its constitutional authority to amend the law and reinstate the tip credit, and that the new law as written would force restaurants to lay off workers, increase prices, and in some cases close their doors.

“Supporting and protecting the tip credit is a priority the Michigan Restaurant & Lodging Association will not waver on,” said Justin Winslow, President & CEO of the Michigan Restaurant & Lodging Association. “With 43 other states in agreement that this bifurcated wage works, it seems evident that Michigan should not be the exception. The elimination of the tipped-wage system, which tipped-workers overwhelmingly support, would also seriously impact workers’ earning potential.”

When the Improved Workforce Opportunity Wage Act was proposed in 2018, it posed a direct threat to removing the tip credit. Tipped workers immediately argued the elimination would be counterproductive, as they intentionally chose to work in the service industry based on the higher income they could receive from tips. In fact, over 300 restaurant servers visited Michigan’s Capitol on Sept. 5, 2018, to advocate for maintaining the tip credit. In response to the concerns voiced by restaurants and service workers, the Legislature amended the act and reinstated the tip credit.

The Court of Claims’ decision that the amended law violates the constitution is placing the tip credit in jeopardy again. The elimination of the tip credit would result in serious harm to the restaurant industry and negatively impact the earning potential of its workforce.

“The Michigan restaurant industry, and its hardworking workforce, would be uniquely impacted by the elimination of the tip credit,” said Angelo Amador, Executive Director of the Restaurant Law Center. “The Legislature acted well within its constitutional right to amend previous legislation to protect the tip credit and prevent negative consequences for service workers across the state. We believe those amendments should remain untouched.”

The complete filing by the Restaurant Law Center and the Michigan Restaurant & Lodging Association can be found here

About the Restaurant Law Center 

The Restaurant Law Center (Law Center) is an independent public policy organization affiliated with the National Restaurant Association. It was established to enhance the industry’s voice in the judicial and regulatory arena. The Law Center works to protect and advance the restaurant industry and promote pro-business laws and regulations that allow restaurants to continue to grow, create jobs and contribute to a robust American economy. Find more information at restaurantlawcenter.org