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| For Immediate Release |
Contact: Andy Deloney |
| August 11, 2006 |
517/377-3931 |
MICHIGAN RESTAURANT ASSOCIATION STATEMENT ON SENATE DEMOCRATIC OVERTIME BILL
LANSING, MI – This week, Senate Democrats introduced a bill which, in addition to addressing overtime regulations, would completely eliminate the “tip credit” for Michigan’s hospitality industry. This bill, if enacted, will have a devastating impact on small and large businesses alike, dramatically increasing prices for consumers while eliminating jobs and employee benefits for tipped workers.
When the legislature and governor approved a minimum wage increase earlier this year, it increased the minimum wage for everyone, regardless of whether or not they receive tips. The current minimum wage is $5.15. On October 1, when the minimum wage increase goes into effect, the minimum wage will be $6.95, even for employees who receive tips.
Despite what some would claim, no employee in this state earns only $2.65 per hour. Every employee, at the end of the pay period, is guaranteed to have earned at least the minimum wage. The “tip credit,” which exists in 43 states, allows an employer to credit a portion of the tips earned and reported by employees towards meeting their minimum wage obligations.
Tipped employees earn significant income, and often are a restaurant’s highest paid employees. The tip credit allows restaurant and hospitality employers to pay higher wages to non-tipped employees and offer better employee benefits to all workers. Its elimination would force employers to cut benefits, eliminate jobs, and increase menu prices paid by consumers.
The Senate Democratic proposal seeks to “help” an industry that has been struggling to keep its head above water for the past couple of years by putting it in concrete shoes. With the introduction of this bill, they have doused the small glimmer of hope that business owners saw with the recent repeal of the single business tax.
Founded in 1921, the Michigan Restaurant Association represents more than 4,500 Michigan foodservice establishments. The foodservice industry plays an integral role in Michigan’s economy, employing more than 436,000 people and creating more than $11.3 billion in total annual sales. For more information, call (517) 482-5244.
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