Effective January 1, 2018, Michigan’s minimum wage will increase from $8.90 per hour to $9.25 per hour. This is a scheduled increase mandated by the Workforce Opportunity Wage Act, Public Act 138 of 2014.
Because Michigan’s minimum wage exceeds the federal minimum wage of $7.25 per hour, Michigan’s law controls the minimum wage level in Michigan. In addition, Employers in Michigan should ensure that employees aged 16 and 17 currently receiving 85% of the minimum wage receive at least $7.86 per hour. For Employers taking a tip credit, the new minimum hourly wage rate will be $3.52 per hour.
Employers should identify their employees currently receiving the minimum wage and adjust employee pay levels effective for any work performed on or after January 1, 2018. Although many Employers pay wages in excess of the new minimum wage, there is still a potential for minimum wage act violations for those employees subject to certain payroll deductions which may drop employees’ pay levels below the new state minimum wage of $9.25 per hour. For this reason, Employers should examine the effect of wage deductions on minimum weekly wage levels. It is important to note that these considerations apply to salaried employees as well as hourly employees.
Practice AreasLabor, Employment, Employee Benefits and ERISA