Select Committee Hears Almost Two Hours Of Testimony On Tipped Wage, ESTA

One full committee room, two overflow rooms and 50 requests to testify set the scene for the first meeting of the House Select Committee on Protecting Employees and Small Businesses, which took testimony on HB 4001 and HB 4002 Tuesday.

The Anderson House Office Building’s largest committee room was packed with servers wearing orange Save MI Tips t-shirts or their restaurant’s merch that they wear when they are working. Bill sponsors Reps. John Roth (R-Interlochen) and Jay DeBoyer (R-Clay) warmed up the panel before servers, business owners, first responders and others took the floor.

“I hope everybody here packed a snack and a cup of coffee,” Schuette said ahead of a hearing that ended just shy of the two-hour mark.

A new dynamic that this committee presented was the opportunity for legislators to respond directly to the people advocating for or against legislation, while in the past seven months since the Supreme Court’s ruling on adopt-and-amend, groups like Save MI Tips (SMT) or One Fair Wage (OFW) have held events or press conferences designed to promote their own message.

Any members of the committee who may have been opposed to HB 4001or HB 4002 didn’t jump at the chance to question its supporters publicly, but when testifiers opposed to the legislation made their pitch, the members swung hard.

Sam Taub, an OFW Michigan organizer and a server who works in Hazel Park, said that he was there on behalf of the Michigan restaurant workers who signed the petition to raise the minimum wage to $15 an hour – with tips on top.

Taub said servers deserve to have their wages paid by their employer rather than by customers. He said that the tipped wage system puts servers in a position to accept harassment so they can get paid, adding that the restaurant industry sees a high rate of sexual assault.

Taub said in one such instance, he was called a “b***h” for asking customers for their IDs since they were ordering alcohol.

Rep. Angela Rigas (R-Caledonia) listed instances in which tipped credit elimination caused job loss or business closures.

“How can you sit here and lecture servers and restaurant owners when nationally, I have to say, the elimination of the tip credit has been an absolute failure?” Rigas said. “One in five restaurants will close in Michigan, and maybe the location you work at will be one of them if this doesn’t get addressed.”

Later, Ryan Sebolt, director of government affairs for the Michigan AFL-CIO, testified in opposition to the bills. He said HB 4001 is a pay cut to the members’ constituents from the pay increases mandated by the Supreme Court ruling.

“If you vote for this bill, you’ll be voting to cut the pay of your constituents by 48 cents an hour to $1.16 an hour starting in February of this year,” Sebolt said.

He added that while the ruling phases out tipped wage, it does not end tipping.

Chair Bill G. Schuette (R-Midland) gave Sebolt a hard time about that argument. Restaurant owners earlier in the committee hearing said that to meet the minimum wage increases, they would have to raise prices. Schuette asked Sebolt who would be paying that additional cost.

Sebolt said if he ordered a $20 meal and was expected to tip $4, and that meal later costs $24 when tipped wage is phased out, the cost to him as the consumer has not changed, and it’s just hidden instead.

Schuette circled back to Sebolt’s statement when he said customers would still tip servers when they eat out.

“So then you’d pay $28? $30?” Schuette said.

“I prefer to be one of those people who tips close to 30 percent,” Sebolt said before going on to explain that data from the restaurant software company Toast shows that in OFW states, the average tip is 18.8 percent, less than one percent lower than states with tipped wage.

Rep. Pauline Wendzel (R-Watervliet) jumped in, too.

“How many servers does your union represent?” she asked.

“We do not currently have any restaurant workers as part of our union,” Sebolt said.

“You don’t represent the tipped workers. But we do,” Rigas added later.

A position on the issue that isn’t as well-represented as the tipped-wage workers came from Lisa Hall, the director of Midland County 911, who was also representing the Michigan Communication Directors Association’s stance on the earned sick time changes.

Hall said the legislation poses challenges for emergency response operations, especially those that are severely understaffed which results in mandatory overtime.

Hall said that while it’s crucial for employees to have sick time to use, it’s just as crucial to prevent misuse or abuse of that sick time policy.

For emergency response services, Hall said last-minute call-offs with no accountability result in shifts with no coverage, leaving the public at risk.

“Imagine you’re a 911 dispatcher who is approaching shift relief at the end of a 12-hour shift after working seven days in a row because of mandated overtime. Imagine on this day during the dozens of calls you’ve answered, you’ve helped deliver a baby over the phone, you’ve listened to cries and screams of the domestic assault victim for 20 minutes while you waited for deputies to arrive. You sent the fire department to a house fire where the homeowner has run back inside to rescue their pets. You jumped into quick action on the radio when officers requested assistance with an armed suspect.”

“You approached the end of your shift, you answer a heartbreaking call requesting an ambulance from a caller whose loved one has ended their life. At the end of this emotionally and physically demanding day, you are so looking forward to your shift relief to walk through the door. They don’t show. You now have to work beyond your 12-hour shift of your seven-day stint to make sure the community responders are taken care of while supervisors scramble to find coverage and make sure your shift relief is OK. This scenario is not hypothetical. This is a reality we work with every day to mitigate,” Hall said.

On the other side of the coin, Antoinette James, representing the Mothering Justice Speakers Bureau, said in prepared testimony acquired by MIRS that the role of mothers as caregivers puts them in a difficult position when they are forced to choose between caring for a sick family member and a job that doesn’t offer accommodating sick leave.

“No parent should have to face such a heart-wrenching decision. The Earned Paid Sick Time policy would empower mothers like me to take the necessary time off to care for our children without the fear of financial repercussions. Studies have demonstrated that when parents have access to earned paid sick leave, children recover faster and are less likely to experience complications, as they can attend follow-up appointments and receive appropriate care,” James said in the testimony she wasn’t able to give due to time constraints Tuesday.

Rep. Helena Scott (D-Detroit) was also unable to testify because of timing, but she was prepared to testify in opposition of the bills, perhaps the only confirmed member of the caucus planning to do so Tuesday.

The committee will return on Thursday with about an hour of testimony. Schuette said he expects substitutes to be presented before the bills are reported with recommendation.

Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter

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