State Rep. Kathy Schmaltz this week voted for a bipartisan solution that will maintain Michigan’s tip credit, implement fair earned sick time policies, and provide stability for small businesses and the workers they employ.

The plan, which includes Senate Bill 8 and House Bill 4002, strikes a balance between protecting workers and supporting Michigan’s job providers. The agreement comes after lengthy negotiations between the House Republicans, Senate Democrats and Gov. Whitmer, reaching a compromise just ahead of the Feb. 21 deadline when changes ordered by a Michigan Supreme Court ruling were set to take effect.

“This is a common-sense solution that puts workers first while recognizing the challenges our small businesses face,” said Schmaltz, R-Jackson. “Servers, bartenders, and restaurant owners told us loud and clear that they wanted to keep the tipping system intact, and we listened. At the same time, we made sure employees can take needed time off without placing an impossible burden on job providers.”

Senate Bill 8 ensures tipped workers continue earning their base wage plus tips, keeping the tip credit at 38% through 2025 while implementing gradual increases, ultimately capping at 50% of the minimum wage by 2031. The bill also strengthens penalties for employers who fail to properly compensate their employees.

House Bill 4002 fixes Michigan’s Earned Sick Time Act to provide flexible earned leave options for workers while recognizing the challenges faced by small and family-owned businesses. The plan also safeguards businesses from baseless lawsuits and protects employers from no-call, no-show absences that could leave workplaces short-staffed, particularly important in emergency services and other critical industries.

“This is about fairness — fairness for the workers who rely on tips, fairness for the small businesses that keep our communities thriving, and fairness for every employer trying to provide good jobs while keeping their doors open,” Schmaltz said. “I’m glad we could come together on a responsible, bipartisan plan that works for everyone.”