Hearing follows through on House Republican promise from previous term

State Representative Bill G. Schuette today heard testimony from small business owners and their workers who are sounding the alarm on a looming Michigan Supreme Court mandate, while leading discussion on plans that keep the state from an economic disaster.

“House Republicans understand the gravity of this issue and what it will do to workers, small businesses and our local economies,” Schuette said. “Now we are following through with action. The first committee hearing we held to begin this new term gives those who will be impacted a voice in Lansing that has been sorely lacking for several months. The first bills that were introduced this term get right to work on solving this problem. Our restaurant workers, our family-owned small businesses and the future of thousands of jobs in our state will pay the price if the Legislature does not act. Lansing must follow the lead of House Republicans by working to get this done.”

Multiple Midland-area business owners and workers detailed their stories and voiced their concerns regarding the dire consequences of the Court’s ruling from last summer to the Select Committee on Protecting Michigan Employees and Small Businesses, which Schuette chairs. The decision, which goes into effect on Feb. 21, puts unrealistic mandates on small businesses regarding wages and sick leave while phasing out the tip credit, which provides a key source of income for workers and in often cases is more than an employee would make with an increased minimum wage – notably in the service industry.

“This would destroy anybody who is making 30, 40 or 50 dollars an hour sometimes. The wage that we’re being paid is overly compensated by the tips that we make on a daily basis,” said Tammy Upchurch, a server at Buffalo Wild Wings in Midland. “If it’s not broke, don’t fix it.”

Steve LaLonde of LaLonde’s Market was joined in testimony by his son-in-law and the market’s current owner, Steve MacNellis. LaLonde said that for the first time in his career, he fears the 67-year-old family-owned business will not survive.

“This is not crying wolf. This is real,” LaLonde said. “We have projected that these changes will add $95,000 to our expense lines. We have weathered the storm of COVID and yearly inflation and we see no more room for future increases on retail prices of groceries (to make up costs).

“Please consider the potential devastating unintended consequences to businesses, especially small family businesses, that are considered the backbone of support to their communities.”

The testimony further supports surveys conducted following the Supreme Court’s decision. One survey disclosed that two-thirds of Michigan restaurant operators would need to lay off staff if the mandates are implemented. Additionally, 94% of businesses anticipated significant price hikes for consumers, and one in five full-service restaurants said they could close permanently.

Bills before the committee, House Bills 4001 and 4002, strike a needed balance between economic growth, protecting livelihoods and keeping Michigan’s vital small business sector from shutting its doors en masse. The plans preserve tipped wages, move toward a higher minimum wage and maintain the status quo for earned sick leave while ensuring businesses with low staff numbers are not harshly impacted by no-notice sick leave that would routinely leave them understaffed and overwhelmed.

Testimony disclosed the Court’s sick leave mandates would even impact emergency services.

“While we recognize and appreciate the intent of the ESTA to support employees in maintaining their health and well-being, it poses significant challenges for emergency response operations in the communities we serve,” said Midland County 911 Director Lisa Hall, who spoke in favor of the legislative changes within HBs 4001-02. “Many of our 911 centers are already faced with severe staffing shortages that result in forced overtime, stressful job duties and the personal sacrifices that come with working this type of shift work. Allowing employees to call in as soon as practical causes a loophole that allows for last minute absences with no accountability. For emergency services, this ambiguity can result in shifts with no coverage, leaving employees and the public at risk. We have a responsibility to ensure reliable staffing and coverage in order to protect our communities.”

Schuette and House Republicans have prioritized solutions to the Court’s decision after House Democrats did not take up any legislation on the issue to close out the 2023-24 term.

“Small businesses employ almost 2 million people in Michigan,” Schuette said. “This is the biggest issue facing our state right now, and I will continue working to ensure hardworking people and their families aren’t devastated by a tone-deaf court ruling.”

PHOTO INFORMATION: State Representative Bill G. Schuette (center), who chairs the Select Committee on Protecting Michigan Employees and Small Businesses, listens to testimony on House Bills 4001-02 during a hearing on Tuesday, Jan. 14.