July 11, 2020

Volume X, Number 193

July 10, 2020

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July 09, 2020

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Michigan Minimum Wage to Increase From $8.90 to $9.25

Effective January 1, 2018, the Michigan minimum wage will increase to $9.25 an hour. This is the last of the scheduled increases under Public Act 138 of 2014.  Beginning in January of 2019, annual adjustments to the minimum wage will be made based on the unemployment rate and consumer price index, and any future increases cannot exceed three-and-one-half percent. 

Under Public Act 138, employers in Michigan may pay 85 percent of this rate ($7.86 an hour beginning January 1, 2018) to employees aged 16 and 17 as long as employees are not displaced in order to hire employees at the lower rate. 

Moreover, tipped employees may be paid 38 percent of Michigan’s minimum wage ($3.52 an hour beginning January 1, 2018) where each of the following conditions is met:

(a) “The employee receives gratuities in the course of his or her employment.”

(b) If the gratuities plus the reduced minimum hourly wage rate do not equal or exceed Michigan’s regular minimum hourly wage, the employer must pay any shortfall to the employee.

(c) “The gratuities are proven gratuities as indicated by the employee's declaration for purposes of the federal insurance contributions act.”

(d) The employee was informed by the employer of the provisions of the tipped employee section of Public Act 318.

© 2020, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume VII, Number 352

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About this Author

Daniel Cohen, Employment, Litigation, Ogletree, Michigan
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Mr. Cohen has counselled management and represented employers in all aspects of labor law, employment law and litigation exclusively since 1988.  Before joining Ogletree Deakins, he had been a founding principal of a respected local boutique for more than 16 years.  A large part of his practice involves the assistance of human resource professionals with the administration of workplace policies and procedures with an emphasis on litigation avoidance, wage and hour compliance, workplace violence prevention, affirmative action, union negotiations and contract...

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