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Published in Food/Agribusiness

‘LONG OVERDUE:’ Restaurant workers welcome higher wages, benefits as owners warn of closures

BY Monday, August 08, 2022 05:58pm

While restaurant owners have warned of impending industry collapse — or at least uncertain operating conditions — of swiftly strengthening the state’s minimum wage and paid sick leave requirements, their workers have welcomed recent developments that they say ensure economic stability.

That includes Detroit chef and industry veteran James Hawk, who called the prospect of a $12 an hour minimum wage for restaurant workers “life changing.”

The restaurant industry experienced potentially massive changes in recent weeks. On July 19, a state Court of Claims judge ruled that previous ballot initiatives to gradually raise the minimum wage, as well as strengthen paid sick leave requirements, would soon take effect after unconstitutional maneuvering in 2018 by the GOP-led legislature to water down the proposal. On July 29, Judge Douglas Shapiro granted the state’s request for a temporary stay on his earlier ruling, delaying implementation until Feb. 19, 2023. 

ROC United, a restaurant workers organization, led a press conference on Aug. 5 to ensure Shapiro’s initial ruling is upheld.

“This is going to affect all of the restaurant workers here in Michigan and I’m really happy about that and am grateful and thankful for that,” Hawk said during the press conference. Hawk is also a plaintiff in the Court of Claims case initially brought by the organizers of the 2018 paid sick leave and minimum wage ballot initiatives. 

Fellow restaurant worker Roquesha O’Neal agreed, saying the ruling — if upheld — would bring peace of mind to restaurant workers. 

“This saves a lot of us from not being worried about paid sick time if our children get sick,” O’Neal said. “With the raising of gas prices and utility bills and other bills, it’s hard for me to support my children and pay the rent each month on time. With paid sick time, that will protect my household — that’s the bottom line. This is long overdue.”

Shapiro approved the state’s request for a stay to give employers time to make operational changes.

Mark Brewer, the plaintiffs’ attorney who is also the former chairperson of the Michigan Democratic Party, has worked with the state and the attorney general’s office to potentially speed up the court briefing process for an earlier determination of when the ballot initiatives become law.

“The goal of the request (on Aug. 5) is to get a decision from the Court of Claims before the (stay) expires,” Brewer said. “We need to make sure these long-overdue raises and sick time are awarded to Michigan workers who badly need them. But neither we nor the state are going to appeal Judge Shapiro’s decision to put it on hold.”

Giving employers “a few months to adjust” is satisfactory to Brewer and his clients, he said during the Aug. 5 virtual press conference. Brewer added that he is “reasonably confident” the court will expedite the case. 

Swift changes

If allowed to take effect as proposed, the new law would immediately raise the minimum wage to $12 an hour and $9.60 for tipped workers when adjusted for inflation, said Peter Ruark, senior policy analyst at Michigan League for Public Policy. The minimum wage for tipped workers would gradually increase to $12 an hour by 2024. 

The paid sick leave law requires 72 hours of paid sick leave per year. Lawmakers previously amended the provision to 40 hours per year and exempted employers with 50 or fewer workers.

Ruark noted that the Legislature’s adopt-and-amend strategy backfired, and actually set up the potential for faster wage hikes than what was initially proposed.

“We will go right to where the minimum wage was supposed to go,” Ruark said. “That will be quite a jump in minimum wage for restaurants, but I would like everyone to remember if the Legislature had not tampered with this minimum wage going to ballot, it would have gone much more gradually and slowly. I sympathize with businesses that are going to feel a little bit of a shock, but they only have the Legislature in 2018 to blame for that. They worked to thwart the will of the voters.”

Michigan Restaurant & Lodging Association President and CEO Justin Winslow said late last month that Shapiro’s stay “successfully prevented the immediate economic decimation of full-service restaurants, but it leaves a teetering industry unsure of its future and incapable of making informed decisions to regain stability.”

Winslow added that he is hopeful Shapiro’s ruling will be appealed and Michigan’s smaller wages for tipped workers is maintained.

West Michigan restaurant owners previously told MiBiz they were worried that the hike in the minimum wage could have unintended consequences for both owners and employees, potentially causing customers to tip less. Owners may also need to reevaluate their business model if smaller tipped wages are phased out, including raising menu prices.

However, ROC United Acting CEO Alicia Renee Farris countered that employees’ need to rely on a tipped wage is part of a deeper, systemic issue.

“The tipped wage is a legacy of slavery, that’s what it is,” Renee Farris said. “People didn’t want to pay a wage so they decided workers should be dependent upon generosity. As a result of COVID-19, most have had to raise (wages) anway, and we were concerned there has to be a policy on record to hold people legally accountable to.”

Renee Farris also noted that the tipped wage phaseout would take place in 2024 under the law.

“We have a long way to go in terms of really bringing about economic justice, but it’s one step at a time, and this is a step in the right direction,” Renee Farris said. “We want businesses to succeed, we do, but we also want to create thriving wages for restaurant workers.”

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