On January 1, 2017, the minimum wage rate in Michigan will increase from $8.50 per hour to $8.90 per hour. This increase marks the third out of four scheduled increases which began in 2014. To recap, the specific dates for each increase were:
| September 1, 2014: | $8.15 per hour |
| January 1, 2016: | $8.50 per hour |
| January 1, 2017: | $8.90 per hour |
| January 1, 2018: | $9.25 per hour |
| January 1, 2019 (and each January thereafter): | Rate to rise with inflation rate for Midwestern states, but not more than 3.5% per year, and no increase if the rate of unemployment meets or exceeds 8.5% in the prior year |
Michigan’s scheduled rise in the hourly minimum wage rate affects tipped employees as well. Beginning on January 1, 2017, the minimum wage rate for tipped employees will increase from $3.23 per hour to $3.38 per hour. This leaves only one scheduled increase remaining, which occurs on January 1, 2018, when the minimum wage rate for tipped employees rises to $3.52 per hour.
Michigan employers must be aware that a tipped employee’s hourly minimum wage rate plus tips must meet or exceed the state minimum wage rate of $8.90 per hour in January 2017 and $9.25 per hour in January 2018. If a tipped employee’s hourly wage rate plus tips does not meet or exceed the required state minimum wage rate for each year respectively, the employer is required to make up any shortfall.
For questions regarding the scheduled increases in Michigan’s hourly minimum wage rate, contact any member of Varnum’s Labor & Employment Practice Team.