Minimum wage increase set for February blocked by Michigan court

A panel of Michigan judges on Thursday overturned a lower court’s ruling that would have raised Michigan’s minimum wage rise to $13.03 an hour and increased the tipped minimum wage to $11.73 an hour next month.

The Michigan Court of Appeals decision, which took effect immediately, determined a controversial legislative strategy to “adopt and amend” ballot proposals before voters had a chance to weigh in isn’t explicitly prohibited in the Michigan Constitution and therefore legal.

​​”The absence of any prohibition on the Legislature amending initiated laws during the same session…compel the conclusion that the Legislature is not prohibited from amending an initiated law enacted by the Legislature during the same legislative session,” Judge Christopher Murray wrote in his opinion.

The court case stems from a 2018 decision by the Republican-led Legislature to adopt ballot initiatives to raise the minimum wage and increase paid sick leave requirements, then quickly water them down. Litigation followed over whether the Legislature had the constitutional authority to do so.

In a concurring opinion, Judge Michael Kelly agreed that the strategy was legal, but said the Legislature’s decision to adopt initiatives into law and prevent them from going to the ballot before substantially changing the language was “anti-democratic.”

“I cannot believe that this drastic action is what the drafters of our Constitution even contemplated, let alone intended,” he wrote. “When the history of this Legislature is written, it is difficult to imagine anybody saying that this was their finest hour.”

Mark Brewer, the attorney representing backers of the minimum wage initiative, said an appeal to the Michigan Supreme Court is planned. The wages were expected to increase on Feb. 19.

The adopt-and-amend strategy “is not authorized by the text of the Constitution, it’s not something that the voters when they adopted the Constitution ever had in their contemplation,” Brewer said.

The outcome of the case will have a huge impact throughout Michigan, particularly the hospitality industry.

About 305,000 workers, or 7 percent of Michigan’s workforce, would have seen a bump in wages if they rose from $10.10 to $13.03 an hour, and for tipped workers to jump from $3.84 to $11.73 under a 2018 ballot initiative that was adopted and substantially changed by lawmakers.

Business groups warned the issue was broader than minimum wage.

“Our concern is not just which expenses will go up because the minimum wage went up,” Brian Calley, president and CEO of the Small Business Association of Michigan, told Bridge Michigan earlier this month.

“It’s that the entire wage tier moves up.”

The other initiative as initially submitted would have required thousands of previously exempt small businesses to provide paid sick leave to workers.

Unions and workers rights groups had called the original Court of Claims ruling — which would have made the two 2018 initiatives as originally submitted the law of the land — a win for employees. But business groups, in particular the restaurant industry, said the ruling threatened dramatic changes, from consumer price hikes to possible job losses and closings.

Eboni Taylor, executive director of Mothering Justice, a grassroots policy group for mothers of color and one of the plaintiffs, called the decision a “devastating blow to Michiganders that deserve paid sick time.”

Lonnie Scott, executive director of progressive policy advocate Progress Michigan, said the court may have ruled that Republicans’ maneuvering was legal, but that doesn’t make it right.

“The Republicans like to talk right now about inflation and all of these things,” Scott told Bridge Michigan.

“This was going to put more money in people’s pockets, plain and simple: Those with the least among us.“

Wendy Block, vice president of government affairs for the Michigan Chamber of Commerce, called the ruling welcome news for employers, many of whom “were struggling with how they could possibly make the sweeping and costly changes called for the lower court’s decision—and by the arbitrarily imposed deadline of Feb. 19.”

Without Thursday’s ruling, the change “would have had dire consequences on the state’s employers, overall business climate and economy – all at a time when our state, communities and families can least afford it,” Block said.

Justin Winslow, president and CEO of the Michigan Restaurant & Lodging Association, said anxiety over the deadline had been growing among many restaurant owners — particularly those running smaller, independent full-service restaurants.

The industry is still recovering from the COVID-19 pandemic and battling inflation. Going from $3.84 per hour to $11.73 — a 205-percent increase — would have put restaurateurs “already in a tough position forced into impossible situations,” Winslow said.

“You would have seen a lot of job loss, and a lot of closures,” he said.