Committee hears bill to allow compulsory tip pools, sponsors say it fixes drafting error

The House Committee on Economic Competitiveness took testimony on House Bill 44 92, a technical cleanup bill that would clarify that an employer may require employees to participate in a tip pool.

Representative John Mueller introduced the bill and said it is intended as a drafting fix following unintended consequences of Senate Bill 8, which had the effect of making tip pooling voluntary and produced administrative complications for employers and servers.

John McDonough, vice president of government affairs for the Michigan Restaurant and Lodging Association, told the committee the bill “clarifies that, tip pooling can be compulsory in the state of Michigan.” He described common industry practice in which tips are collected and shared—particularly where credit‑card payments are pooled—and said voluntary participation creates tracking and payroll complications. McDonough used hypotheticals to illustrate challenges when individual employees opt in or out of a pooled system for particular shifts.

Members questioned how the change interacts with the state’s tip‑credit structure and minimum‑wage rules. McDonough said Michigan’s reliance on a tip credit distinguishes the state from Minnesota and California (which the sponsor said do not use a tip credit), and argued the bill restores consistency for employers that rely on pooled tipping to allocate funds to bussers, bartenders and other non‑server staff.

The clerk read in written support from business groups including the Small Business Association of Michigan, the Michigan Chamber of Commerce, NFIB and the Michigan Licensed Beverage Association. No committee vote was held during the hearing.

If enacted, HB4492 would alter how employers administer tips; the committee discussion indicated members expect follow-up questions from legislative services about precise statutory language and interaction with wage provisions.