State Rep. Greg Alexander has co-sponsored new legislation that will tackle one of the most pressing issues facing Michigan’s economy – the fallout from last summer’s Michigan Supreme Court decision that jeopardizes small businesses, tipped wage workers, and local communities.

House Bills 4001 and 4002 strike a needed balance between fostering economic growth, protecting livelihoods and preventing mass closures. Without legislative intervention, the court’s decision to phase out the tip credit and enact other unrealistic mandates for sick leave and wages will be effective Feb. 21 and would lead to local job providers having to lay off staff, cut hours or close entirely.

“This ruling would have a devastating impact on workers and families if it goes into effect, and it would raise prices on customers who simply want to go out and support businesses in their communities,” said Alexander, of Carsonville. “Unfortunately, reforms were not prioritized during the previous legislative term. But House Republicans in majority are tackling this issue on Day One and working to deliver a better way forward for our small business owners and their dedicated employees.”

Surveys show that two-thirds of Michigan restaurant operators expect they will need to lay off staff if the court’s mandates are implemented. Additionally, 94% of businesses anticipate significant price hikes for consumers, and one in five full-service restaurants could close permanently.

The new bills preserve tipped wages that help many workers, including those in the service industry, earn more than through a higher minimum wage. The plans gradually increase wages and maintain the status quo for earned sick leave while ensuring small businesses with low staff numbers are not harshly impacted by no-notice sick leave that would routinely leave them understaffed and overwhelmed.

House Republicans also announced the formation of a new committee – the Select Committee on Protecting Michigan Employees and Small Businesses – that will work to address tipped wage and earned sick time legislation.