An open Letter To My State Legislators In Lansing Regarding The Push To Increase The State Minimum Wage To Upwards Of $15/hr:

Sen. Dave Hildenbrand
Rep. Brandon Dillon

Gentlemen,

There has been a general outcry for an increase in Michigan’s minimum wage to upwards of $15/hour.  To say that such an increase would destroy Michigan’s economy and price the items we produce out of the reach of most Michiganders would be an understatement.

However, there is one piece of common sense legislation on which legislators on both sides of the aisle should be able to agree and pass quickly that would help address the concerns of the one industry that is spearheading this outcry - the food services industry.

Prior to 1964, tips, or gratuities, were a bonus given by a customer to their server in recognition for superior service.  Somewhere along the line, however, restauranteurs co-opted this practice, recognizing an opportunity to increase their profitability by turning tips into a piece of the basic wage structure and forcing customers to, in addition to paying for the food they receive, contribute directly to the wages of their servers.  The practice was driven by greed and is patently abusive.

We can change this - and we need to do so, NOW.

Repeal MCL 408.387:

408.387a Employees receiving gratuities; minimum hourly wage; “gratuities” defined.

Sec. 7a.
(1) The minimum hourly wage rate of an employee shall be $2.65 per hour if all of the following occur:
(a) The employee receives gratuities in the course of his or her employment.
(b) The gratuities described in subdivision (a) equal or exceed the difference between $2.65 per hour and the minimum hourly wage established under section 4.
(c) The gratuities are proven gratuities as indicated by the employee's declaration for federal insurance contribution act purposes.
(d) The employee was informed by the employer of the provisions of this section.
(2) As used in this section, “gratuities” means tips or voluntary monetary contributions received by an employee from a guest, patron, or customer for services rendered to that guest, patron, or customer and that the employee reports to the employer for purposes of the federal insurance contribution act, chapter 21 of subtitle C of the internal revenue code of 1986, 26 U.S.C. 3101 to 3128.

This is a common sense answer to a very real problem; this one action alone would help to take some of the wind out of the sails of the drive to increase the minimum wage to unrealistic, unsupportable levels.

Look at it this way: nearly every industry gives bonuses in recognition for superior performance.  While these bonuses are taxed, they are separate from the basic wage structure that makes up the foundation of the remuneration received by the employee.  The difference?  Bonuses paid to the employee in most industries are paid by the EMPLOYER (who does not reduce wages accordingly), not the CUSTOMER.  I can tell you with certainty that if the bonuses received by GM employees, for example, were transformed into part of their basic wage structure and their wages were reduced by an identical amount, every employee would walk off the job in protest, yet, this very same practice is considered to be acceptable in the food services industry - and in the food service industry, the employer keeps the difference as profit, essentially charging the customer two sets of prices, one for the prepared food, and the other for the service of that food.

This must change; it is 50 years overdue.

Do the right thing:  Repeal MCL 408.387

Sincerely,