Survey: Michigan Restaurants Will Increase Prices if ‘Adopt and Amend’ Kicks In

More than 90 percent of restaurants in Michigan will increase prices and 16 percent may close if the “Adopt and Amend” ruling raising the minimum wage goes into effect as expected in February, according to the results of a new survey released by the Michigan Restaurant & Lodging Association (MRLA).
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Waitress welcoming restaurant guests take order writing on notepad
A recent MRLA survey shows that Michigan restaurants are facing a pandemic-scale crisis without relief from a July Court of Claims ruling. // Stock Photo

More than 90 percent of restaurants in Michigan will increase prices and 16 percent may close if the “Adopt and Amend” ruling raising the minimum wage goes into effect as expected in February, according to the results of a new survey released by the Michigan Restaurant & Lodging Association (MRLA).

In July, the Michigan Court of Claims ruled unconstitutional an action taken by the Michigan Legislature in 2018 when it adopted two citizen-initiated petitions, then later amended them in the same legislative session. The case is currently before the Michigan Court of Appeals, with a hearing scheduled on Dec. 13.

If the Court of Claims ruling is not overturned, Michigan’s minimum wage will jump to approximately $13 per hour in February and the tipped minimum wage will increase more than 200 percent overnight to approximately $11.75.

The tip credit, or difference between the full minimum wage and tipped minimum wage, would be eliminated, making Michigan one of just a handful of states to operate without one. The impact of these wage increases to an industry still recovering from the pandemic will be “catastrophic” to Michigan’s second largest private employer.

“The Michigan Court of Claims ‘Adopt-and-Amend’ ruling earlier this year caught many by surprise and has had the unfortunate effect of placing Michigan’s still-recovering restaurant industry in the middle of an avoidable crisis,” says Justin Winslow, president and CEO of the MRLA.

“Through the release of our operator survey, it is empirically clear that without relief in court or through the legislature, Michigan’s restaurant industry is staring down pandemic-level closures and job losses in February when the ruling takes effect. As we look to the lame duck legislative session ahead, we are encouraged by the governor’s public acknowledgement that a reasonable legislative solution is the best option and are working with the legislature to ensure that such a solution reaches her desk before it is too late.”

To offset the increased costs if the court’s ruling is upheld, respondents said they will be forced to do the following:

  • 91 percent would increase prices
  • 58 percent would lay off employees
  • 36 percent would reduce operating hours
  • 18 percent would take other actions
  • 16 percent would close their business
  • 2 percent would take no action

The survey was conducted by the MRLA from Sept. 6-9. The data represent 307 responses from restaurant and hotel operators representing nearly 2,000 locations and more than 75,000 employees, roughly 24 percent of Michigan’s hospitality industry.

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