The Employer’s Wage and Hour Advisor

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.