State Rep. Kathy Schmaltz today was appointed to serve on a select committee formed to address a Michigan Supreme Court decision from last summer that tipped workers and small businesses say will have devastating consequences. Without legislative intervention, the changes are set to take effect Feb. 21.

“Our small businesses and service workers are facing a serious challenge that could lead to closures and job losses if we don’t act,” said Schmaltz, R-Jackson. “Tipped workers rely on the current system to support themselves and their families, and many small businesses simply cannot absorb the financial impact of these changes. This committee has an important job to do, and I am committed to finding a solution that supports workers and keeps businesses open.”

The court decision imposes unrealistic mandates on small businesses regarding wages and sick leave while phasing out the tip credit, a key source of income for workers that often exceeds earnings under an increased minimum wage – particularly in the service industry.

“The change the court decision imposes are not a step forward for our workers and businesses, it’s a step backward,” Schmaltz said.

The Select Committee on Protecting Michigan Employees and Small Businesses was formed with the sole focus of addressing tipped-wage and earned sick time legislation. The committee will consider House Bills 4001 and 4002, introduced by Reps. John Roth, R-Interlochen, and Jay DeBoyer, R-Clay Township, and co-sponsored by Schmaltz.

The bills aim to resolve issues stemming from last summer’s court decision, which focused on procedural government matters rather than addressing real-world challenges. The legislation seeks to strike a balance between fostering economic growth, protecting workers’ livelihoods, and preventing business closures.

On Wednesday, state Senators introduced their own proposals to address the tip credit and Earned Sick Time Act.

“This is about making sure Michigan families and businesses don’t bear the brunt of a decision that doesn’t reflect the reality they live every day,” Schmaltz said. “I’m ready to work with my colleagues on both sides of the aisle to get this right. We have a responsibility to act quickly to address these concerns before more damage is done. We need to protect our workers and businesses.”

The House committee is set to hold its first meetings next week.

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