Michigan’s Minimum Wage Is Increasing To $9.45 Per Hour

Young woman serving a customer at small shop - minimum wage

Michigan’s minimum wage will be $9.45 per hour beginning March 29, 2019. This is a 20 cent increase from the current minimum wage which is $9.25 per hour.

Will Michigan’s minimum wage continue to increase?

Yes. Under Public Act 368, Michigan’s minimum wage will continue to increase each year until it gets to $12.05 per hour in 2030.

The following table outlines the series of increases that will go into effect on January 1 of each year.

YearMichigan’s Minimum Wage (per hour)
2019$9.45
2020$9.65
2021$9.87
2022$10.10
2023$10.33
2024$10.56
2025$10.80
2026$11.04
2027$11.29
2028$11.54
2029$11.79
2030$12.05

What’s the minimum wage for tipped workers?

Public Act 368 didn’t make changes to Michigan’s minimum wage for tipped employees. Tipped employees will continue to receive 38% of the regular minimum wage rate.

This will continue to increase over the years, but the increases won’t be as significant for tipped workers compared to regular workers.

For example, tipped employees go from $3.51 per hour in 2018 to $3.59 per hour in March 2019. Regular employees receive a 20 cent increase per hour. Tipped employees see a .08 cent increase.

Employers should remember that all tipped employees are still guaranteed to make the minimum wage.

If they add their tips to their tipped minimum wage, and it’s not equal to or greater than the regular minimum wage, their employer must pay the difference.

 

How did we get here?

Similar to Michigan’s new paid medical leave act, Michigan’s minimum wage was set to appear on the general election ballot in November 2018.

The original proposal would have increased the minimum wage to $12.00 per hour by 2022. And, it would have removed the tipped minimum wage by 2024. Then, tipped employees would get the regular minimum wage.

Michigan voters would have been able to vote for or against this initiative in the general election.

However, Michigan’s Legislature adopted the proposal and amended it. Now, the wage increase to $12.00 per hour occurs over a period of 11 years, not four. The Legislature also chose to keep the tipped minimum wage.

It was signed into law on December 14, 2018.

 

What are my next steps as an employer?

If you have hourly employees, review their wages and make adjustments to increase their hourly pay by March 29, 2019. If you’re covered by the state and federal minimum wage laws, you should pay the higher rate. That’s Michigan’s hourly rate.

Currently, the U.S. minimum wage is $7.25 per hour. This is $2.20 per hour less than Michigan’s new minimum wage.

If you work with a payroll provider, connect with them to make these adjustments as soon as possible.

The state may also require you to post the new minimum wage poster in your workplace where it’s visible to employees. If you are unsure of your posting requirements, you can get more information at the department of licensing and regulatory affairs’ website.

These changes to Michigan’s minimum wage laws, in addition to Michigan’s new paid medical leave act, may be subject to change.

Some are questioning the constitutionality of the state Legislature’s actions regarding these voter-initiated proposals. The Michigan Supreme Court will hear arguments as to whether the Legislature could amend these laws on July 27, 2019. The laws could change based on the Supreme Court’s opinion. We’ll notify you if there are any updates.

In the meantime, make sure you continue to make the necessary adjustments to comply with the law. If you need assistance with processing payroll, consider outsourcing to a third-party – like us – to help manage these adjustments.

 

Have questions about Michigan’s minimum wage? Let’s talk!