The Michigan House Committee on Economic Competitiveness heard testimony on House Bill 4492, a cleanup bill intended to clarify that employers may require employees to participate in tip pools used to distribute gratuities in restaurants and bars.

Representative Mueller introduced the bill and called it a consistency measure for tipped workers in the restaurant industry. John McDonough, vice president of government affairs at the Michigan Restaurant and Lodging Association, told the committee the bill “clarifies that tip pooling can be compulsory in the state of Michigan.” McDonough said the current drafting created administrative burdens by allowing workers to opt in and out of tip pools, which complicates point-of-sale accounting and nightly distributions.

Supporters argued tip pooling reflects the team-based nature of restaurant service: servers, bartenders and bussers share responsibilities and tips are commonly split. McDonough described scenarios in which a server declines to contribute to the pool for a large, high-tip shift, then later requests to rejoin, creating recordkeeping and fairness problems for employers.

Opponents and some members raised concerns about fairness to individual employees who believe colleagues are not carrying their weight. Representative DeBoer asked how the bill would protect employees who feel they would be disadvantaged by a mandatory pool; McDonough responded that workplace norms and peer pressure typically address underperformance and that employees can seek other employers if dissatisfied.

Members also asked about interactions with minimum-wage rules. Representative Bridal noted that Minnesota and California do not use tip credits and have different statutory language; supporters said Michigan is a tip-credit state and HB 4492 is intended to align statutory text with that operating model. Sponsors said they would consult Legislative Services Bureau (LSB) staff about specific language in the bill concerning gratuities and service charges and return with clarifications.

Support was filed by business groups including the Small Business Association of Michigan, the Michigan Chamber of Commerce and the National Federation of Independent Business. The committee took no vote on the measure during the hearing; members requested follow-up with LSB and indicated they expected further questions and possible technical amendments.

McDonough and sponsor representatives described the change as corrective drafting rather than a substantive policy shift; members asked for LSB review to confirm that the bill accomplishes the intended effect without unintended consequences for wage compliance.