Michigan Minimum Wage Laws
Michigan’s current minimum wage is $9.25. MI Law 408.414
Beginning April 1, 2019, and every year thereafter, Michigan will increase its minimum wage to reflect the average annual percentage change in the consumer price index for the most recent 5-year period for which data is available, although the change to the minimum wage cannot exceed 3.5% per year. Additionally, the minimum wage will not increase in any year where the unemployment rate is 8.5% or greater for the year preceding the year in which the increase was to take effect. The state treasure will be responsible for calculating the change in the consumer price index and will rely on the most comprehensive index of consumer prices available for the Midwest region from the U.S. Department of Labor, Bureau of Labor Statistics. The Michigan Department of Licensing and Regulatory Affairs, Wage and Hour Division, must post the adjusted minimum wage on its website by February 1 of the year the change will become effective. The cost of living increase will not take effect if the unemployment rate in Michigan is 8.5% or more in the prior year. MI Law 408.414
Michigan employers must also comply with federal minimum wage laws, which currently sets the federal minimum wage at $7.25. See FLSA: Minimum Wage.
If an employer chooses to pay employees minimum wage, the employer must pay those employees in accordance with the minimum wage law, either federal or state, that results in the employees being paid the higher wage. In most instances in Michigan, the Michigan minimum wage will apply as it generally guarantees a higher wage rate for employees than federal law.
Youth minimum wage
Michigan minimum wage laws allow employers to pay youth 17 years of age and younger a wage that is 85% of the standard minimum wage. The current minimum wage for youth is $7.57. The minimum wage for youth over the next several years will be $7.86 on January 1, 2018, and will then increase each year consistent with any increase in the minimum wage.
MI Laws 408.414b; MI Wage and Hour Program – Workforce Opportunity Wage Act
Tipped minimum wage
Michigan’s minimum wage for tipped employees is $3.52.
Massachusetts’ tipped minimum wage is 38% of its standard minimum wage. It will increase to $3.52 on January 1, 2018, and then will increase each year consistent with increases in the minimum wage rate.
Michigan defines gratuities as tips or monetary contributions voluntarily paid by customers to employees for services performed and that the employee reports to the employer to comply with the federal insurance contribution act, 26 USC 3101 to 3128. MA Laws 408-414d
An employer may pay an employee the tipped minimum wage if:
- the employee receives gratuities in the course of employment;
- the gratuities received by the employee are equal to or greater than the difference between the tipped minimum wage and the standard minimum wage;
- the gratuities are included on the employee’s declaration for federal insurance contribution act purposes; and
- the employer notifies the employee of the rules governing tipped employees.
Tip pooling and sharing
Michigan law does not address tip or gratuity pooling or sharing. There is no provision in Michigan law that prohibits an employer from requiring employees from participating in tip or gratuity pooling or sharing agreements. The standards set forth by the federal Fair Labor Standards Act related to tip/gratuity pooling may provide reasonable guidance.
Employees with disabilities
Michigan minimum wage laws allow employers to pay employees with disabilities a subminimum wage rate lower than the standard minimum wage if they are covered by section 14(c) of the Fair Labor Standards Act or, if not covered, if they obtain a for a wage deviation certificate from Michigan’s Department of Consumer and Industry Services to do so. MI Laws 408.414c; MI Regs. 408.771-786 The subminimum wage set by the Department of Consumer and Industry Services will be commensurate with the disabled employee’s ability to perform the work for which he or she was hired. MI Regs. 408.771-786
Michigan minimum wage laws allow employers to pay 18 and 19 year olds a subminimum training wage of $4.25 an hour for the first 90 days of employment. Employers may not displace any employee to hire an individual at the lower wage rate.
Michigan minimum wage laws allow employers to pay apprentices a subminimum wage rate lower than the standard minimum wage. To be able to pay the lower rate, employers must submit an application to do so with Michigan’s Department of Consumer and Industry Services which is responsible for setting a suitable wage rate. MI Laws 408.414c
Michigan minimum wage laws allow employers to pay learners a subminimum wage rate lower than the standard minimum wage. To be able to pay the lower rate, employers must submit an application with Michigan’s Department of Consumer and Industry Services which is responsible for setting a suitable wage rate. MI Laws 408.414c
Michigan minimum wage laws do not allow employers to pay student learners a subminimum wage rate that is less than the standard minimum wage.
Michigan minimum wage laws do not allow employers to pay student workers a subminimum wage rate that is less than the standard minimum wage.