Michigan’s New Minimum Wage Goes Up Sept. 1

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LANSING — Beginning Sept.1, Michigan workers will see an increase in the minimum wage rate from $7.40 to $8.15, the first rate increase in six years. The new change to state law marks the beginning of a gradual 25 percent increase of the minimum wage resulting in $9.25 per hour by 2018. Act 138 applies to employers in Michigan that have two or more employees age 16 and older.

The current minimum wage is $7.40.  The new rate increases are as follows:

  • Sept. 1, 2014 – $8.15
  • Jan. 1, 2016 – $8.50
  • Jan. 1, 2017 – $8.90
  • Jan. 1, 2018 – $9.25

Act 138 allows an employer to pay a newly hired employee age 16 to 19 $4.25 per hour for the first 90 days of employment. The measure also allows an employer in Michigan to pay 85 percent of the minimum wage to employees aged 16 and 17; however, note that the current Federal Minimum Wage rate is $7.25 per hour. Employers that are covered by both State and Federal Minimum Wage law should pay the higher applicable rate. Information on Federal Minimum Wage can be obtained by calling the U.S. Department of Labor at 866-487-9243.

85 Percent of Minimum Hourly Wage Rate

  • Sept. 1, 2014 – $7.25*
  • Jan. 1, 2016 – $7.25*
  • Jan. 1, 2017 – $7.57
  • Jan. 1, 2018 – $7.86

*per Federal Minimum Wage Rate

Act 138 allows employers to take a tip credit on minimum wage under certain conditions for those employees who customarily and regularly receive tips. If the gratuities plus the minimum hourly wage rate do not equal or exceed the minimum hourly wage otherwise established, the employer pays any shortfall to the employee. The gratuities are proven gratuities as indicated by the employee’s declaration for Federal Insurance Contribution Act.

Employees covered by the overtime provisions of the Workforce Opportunity Wage Act must be paid one and a half times their regular rate of pay for hours worked exceeding 40 hours in a workweek.

The State of Michigan makes new online resources available at Michigan.gov/miosha to help workers and employers understand the facts as the new rate takes effect.

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