Press Release
FOR IMMEDIATE RELEASE
November 21, 2022
Media Contacts:
|
Emily Daunt
Michigan Restaurant & Lodging Association (517) 377-3933 |
Michael Odom or Adam O’Connor
Marx Layne & Company (734) 259-9060 Odom’s cell (248) 321-0586 O’Connor’s cell |
Michigan Restaurant & Lodging Association Releases Operator Survey on Impact of "Adopt and Amend" Ruling
One in Six Full-Service Restaurants to Close if Ruling Stands
One in Six Full-Service Restaurants to Close if Ruling Stands
LANSING, MICH. –The Michigan Restaurant & Lodging Association (MRLA) today released the results of a recent hospitality industry operator survey it conducted to measure the likely impact of the “Adopt and Amend” ruling that will go into effect on February 19, 2023, with disastrous effects on Michigan’s restaurant industry.
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 December 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 swift and severe 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,” said MRLA president & CEO Justin Winslow. “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 loss 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:
The survey was conducted by the MRLA from September 6 – 9, 2022. The data represent 307 responses from restaurant and hotel operators representing nearly 2,000 locations and over 75,000 employees–or roughly 24 percent of Michigan's hospitality industry.
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 December 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 swift and severe 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,” said MRLA president & CEO Justin Winslow. “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 loss 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 September 6 – 9, 2022. The data represent 307 responses from restaurant and hotel operators representing nearly 2,000 locations and over 75,000 employees–or roughly 24 percent of Michigan's hospitality industry.
About the Michigan Restaurant & Lodging Association
Michigan Restaurant & Lodging Association (MRLA) is the recognized leader of Michigan's hospitality industry, providing essential services to the foodservice and lodging community. Founded in 1921 as the Michigan Restaurant Association and now known as the MRLA, the Association represents over 5,000 Michigan foodservice and lodging establishments. The industry plays an integral role in Michigan's economy, employing more than 595,000 people and creating nearly $40 billion in annual sales. For more information, visit www.mrla.org and www.detroitrla.org.
Michigan Restaurant & Lodging Association (MRLA) is the recognized leader of Michigan's hospitality industry, providing essential services to the foodservice and lodging community. Founded in 1921 as the Michigan Restaurant Association and now known as the MRLA, the Association represents over 5,000 Michigan foodservice and lodging establishments. The industry plays an integral role in Michigan's economy, employing more than 595,000 people and creating nearly $40 billion in annual sales. For more information, visit www.mrla.org and www.detroitrla.org.
###
