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Michigan’s minimum wage receives first boost in eight years

May 28, 2014

On Tuesday, May 27, 2014, Michigan’s House and Senate reached a bipartisan agreement to raise the state’s minimum wage by 25 percent over the next four years, to $9.25 an hour by January 1, 2018. Governor Rick Synder promptly signed the bill into law. The new law will raise the current minimum wage of $7.40 an hour in four increments:

1. Effective September 1, 2014 - $8.15/hour;
2. Effective January 1, 2016 - $8.50/hour;
3. Effective January 1, 2017 - $8.90/hour; and
4. Effective January 1, 2018 - $9.25/hour

The law also raises the minimum wage for tipped employees to 38 percent of the minimum wage for non-tipped workers. The new minimum wage for tipped employees will be:

1. Effective September 1, 2014 - $3.10/hour;
2. Effective January 1, 2016 - $3.23/hour;
3. Effective January 1, 2017 - $3.38/hour; and
4. Effective January 1, 2018 - $3.52/hour

Beginning January 1, 2019, the law ties future increases of the minimum wage to the five-year average rate of inflation for Midwestern states, capped at 3.5 percent per year. However, no inflationary increases would occur if the Michigan unemployment rate reaches 8.5 percent or higher in the prior year.

If you have any questions about this new law, we are available to discuss this issue in greater detail with you. Please contact one of Honigman’s Labor and Employment attorneys.