Since the start of the pandemic, the local dining industry has continued to suffer. Many restaurants across metro Detroit shut down in the last two years while others continue to face the heat with operational challenges.
Last month, the Court of Claims ordered Michigan businesses to increase the minimum wage to $12 per hour and offer paid sick leave to workers.
However, the implementation was delayed and will take effect in February of next year unless it's appealed.
But regardless, as per the law, tipped employees are entitled to full minimum wage. That's something that engineering student Cassandra Conerio found out early on during her nine years working as a server across metro Detroit.
"It's quick and chaotic, I mean everyone knows it's quick fast money if you are good at it," Conerio said.
Depending on the season, the 25-year-old makes an average of $2,500 per month just from tips. But the pandemic has changed that.
"For a lot of my co-workers it was almost half, a lot of them had to pick a second job that was guaranteed income, so like an hourly rate. Amazon was a big place where a lot of restaurant workers went to," said Conerio.
And even with COVID-19 restrictions nearly gone, the dining industry is still impacted by staffing shortages and rising costs, all resulting in reduced operating hours.
"Nobody would staff us for more than 15 to 25 hours a week. I mean even for our hourly wage workers, like line cooks, and dishwashers none of them were at full-time status either," said Conerio.
But attorney Cait Malhiot says many tipped workers don’t realize that they’ve always been entitled to minimum wage, which currently in Michigan is $9.87.
"Employers are responsible for making sure their employees earn enough in tips, and keeping records of those tips, and if that doesn't happen, if they can’t show yes, this employee made enough in tips this week to make minimum wage, employers do have to pay that difference," Malhiot said.
Malhiot says as per the law, the minimum wage for a tipped worker is calculated on total weekly pay. That's the base pay plus all the tips they get to keep.
"Servers don’t make as much as you think they are going to. So all servers all gratuities that they make go into a single pool and that money is divvied up amongst the servers based on how many hours they’ve worked that day," said Malhiot.
That’s why Cassandra hopes the minimum wage for tipped workers in Michigan is increased from $3.75 an hour to the proposed $12 per hour.
"I mean there are days that I will work 6-7 hours and I will only walk out with $30 in my hand and that’s all that I made," said Conerio.
If the $12 per hour minimum wage ruling takes effect next year, “tip credit” will be set at $2.40, while the base pay for tipped employees will be $9.60. But the increase may come with a caveat.
"People who are already reluctant to pay tips or pay 20% on tips, knowing that servers are getting more on their checks, might tips less, and most servers make well over minimum wage. Most people are doing this for 20 to 40 dollars an hour and if suddenly they are doing it for $12 or $15 an hour they are going to look for other work," said Malhiot.
Now Cait says if employees are unsure that their employer is meeting the current minimum wage requirement then contact the Department of Labor or an employment law attorney at the earliest.
