Legislative Affairs
& Political Action
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Minimum wage increase update
November 21, 2007
Legislation increasing the state minimum wage increase was signed into law by Gov. Jennifer Granholm in March, 2006. The MRA opposed the legislation.
The details of the law are as follows:
- Effective October 1, 2006, increase the minimum wage to $6.95 per hour;
- Effective July 1, 2007, increase the minimum wage to $7.15 per hour;
- Effective July 1, 2008, increase the minimum wage to $7.40 per hour;
The proposal contains no cost of living adjustments beyond that point, does not change the payroll wage for tipped employees, preserves the sub-minimum youth training wage, and does not create new fines or penalties for employers.
After the increase was signed into law, the state’s labor unions and the Michigan Democratic Party decided to abandon an effort to place an even more destructive minimum wage increase on the November 2006 general election ballot. Their proposal would have amended the Michigan Constitution and guaranteed annual inflationary increases in the wage. In addition, their proposal would have increased the payroll wage for tipped employees so that it is always $2.50 less than the adjusted minimum wage.
BUT THIS ISSUE IS NOT SETTLED. Far from it. On numerous occasions, Gov. Granholm and others called on the Legislature to “finish the job” by increasing the payroll wage for tipped employees and to make the minimum wage subject to annual inflation indexing.
In addition, on August 9, 2006, former state Senate Minority Leader Bob Emerson (D-Flint) introduced Senate Bill 1388, legislation which would completely eliminate the tip credit. So far in 2007, two bills have been introduced on the subject. One would increase the payroll wage and another would eliminate the credit entirely.
The MRA will continue to stay on top of this issue and provide you with the latest information so you can stay up to date. If you have any questions or comments, please contact the MRA Public Affairs Department at (800) 968-9668.
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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