Most Lake Orion businesses are reportedly not being affected by new legislation that saw the minimum hourly wage rise from $5.15 to $6.95 on Oct. 1.
The increase marks the first time in nine years that Michigan’s minimum wage has risen. The legislation was signed into law in March by Governor Granholm.
While the majority of local businesses already pay employees at or above the new minimum, some business leaders think the most vulnerable among them could be pushed to the brink by the wage increase.
Donna Heyniger, Orion Area Chamber of Commerce Managing Director, fears that it is the struggling businesses that will be hardest hit.
‘Because the economy is so soft right now, there are probably a lot of small business owners who are holding their breath,? said Heyniger. ‘It’s one of the things I’d been concerned about. .I think it’s going to hurt.?
Heyniger points out that businesses whose profit margins tend to be small, may be forced to cut back. Which could mean laying off low-wage employees, most of whom rely heavily or exclusively on the income.
The new legislation did not increase the minimum wage for ‘tipped? workers (such as food servers).
However, employers are required to ensure that these employees earn the $6.95 hourly minimum. That can be accomplished through a combination of the current minimum wage of $2.65 for tipped workers, and their tips.
Wendy Geitner, a waitress and longtime employee at C.J.s Village Cafe on Flint Street downtown, doesn’t think the majority of waitresses or local eateries will be adversely affected by the minimum wage increase.
‘I earn more than that, anyway,? said Geitner. ‘But it’s not because of the increase in the minimum wage. It’s because of the tips we make.?
Not all businesses will be immune from problems associated with the minimum wage increase, though.
Angie Davis, owner of Lake Orion’s Poppy Seed Deli & Coffee shop for the past three years, is concerned about the logistics of hiring new employees at the higher wage, and still be able to afford pay raises for longtime employees who deserve them.
‘I had been starting my staff off at $7 an hour,? said Davis. ‘Some of them are due for a raise. But if I have to bring in new hires at the new rate, it’s going to be tough.
‘I want to be fair to the people who’ve been working for a while,? she added. ‘I’m going to have to figure out how I’m going to handle that situation.?
For more information about the state’s minimum wage, visit www.michigan.gov/wagehour or call the Wage & Hour Division at 517-335-0400.