Residents around the Clarkston area expressed varying opinions when Michigan’s first minimum wage increase since 1997 went into effect Oct. 1.
Legislation signed in March by Gov. Jennifer Granholm bumped the minimum earnings of some 90,000 workers across the state from $5.15 to $6.95 per hour, nearly a thirty-five percent increase.
Most businesses around Clarkston, however, have barely taken notice of the change.
‘Many of our members are already paying more than minimum wage in order to attract and keep quality workers,? said Penny Shanks, executive director of the Clarkston Area Chamber of Commerce.
‘They’ve found that when they pay more they actually save money because turnover is reduced and they don’t have to train new staff.?
But for area restaurant owners and employers, it’s a different story.
Built into the legislation is a provision that requires employers of tipped workers, such as restaurant food servers, to ensure that those employees are making $6.95 an hour through the combination of tips and wages, even though there was no increase in the minimum wage these employees must be paid ? the wage for tipped workers still stands at $2.65 per hour. Servers must document earnings, claiming at least $4.30 and hour in tips under the new law, and pay taxes accordingly.
‘How can an employer govern what an employee says they make?? said Ed Zull, owner of Pete’s Coney Island on Dixie Hwy. in Clarkston. ‘And how can it now be the restaurant’s responsibility to make sure servers are making $6.95? Tips depend on how much business we get and the level of service the customer gets. It depends on lots of things.?
A longtime server at Pete’s agreed, noting that she’d already been at work two hours and had collected only $2.00 in tips.
‘There’s my tips,? said the server, who asked that her name not be used. ‘I’m paying taxes on money I didn’t make.?
The minimum wage for tipped employees was $1.77 when the Pete’s server started waiting tables in 1977. Nearly 30 years later, that wage has increased by only 88 cents, and will not increase when additional minimum wage hikes go into effect in July 2007 and July 2008.
Another provision under the new law stipulates that employers can now pay workers under 18 a sub-minimum wage equal to 85 percent of the adult minimum wage.
This means teens may now earn $5.91 per hour, over a dollar less than the wage of their adult counterparts.
The state’s minimum wage will increase twice more under the new legislation, first bumped to $7.15 an hour July 1, 2007, then hiked to $7.40 an hour starting July 1, 2008.The minimum wage law in Michigan applies to employers with two or more employees age 16 or older.