Minimum Wage Law to Increase in March 2019 and Beyond

minimum wageOn March 29, 2019, Michigan’s minimum wage will increase from $9.25 to $9.45 per hour.  This is the first of 12 annual increases, until the minimum wage hits $12.05 per hour in 2030.  

This increase was adopted by the Michigan Legislature after a ballot proposal on the issue was certified for the November general election ballot. In adopting the proposal, lawmakers removed the issue from the November general election ballot (where it was all but certain to pass) and retained their ability to amend the proposal with a simple majority vote prior to the acts going into effect in March of 2019. Had the issue gone to the ballot and been approved by voters, any changes would have required a three-fourths vote of the Legislature, a near impossible threshold.

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The original (ballot) proposal would have increased the minimum wage to $12.00 over the next four years and fully eliminated the tipped employee minimum wage.  This would have resulted in Michigan having one of the highest minimum wage rates in the country, thereby making Michigan uncompetitive in the race for jobs and forcing many employers to make tough business decisions, including cutting back staffing hours, increasing costs and reducing other investments in employees or the business. Michigan's minimum wage already outpaces Indiana ($7.25), Illinois ($8.25), Ohio ($8.10) and Wisconsin ($7.25).  

The Michigan Chamber was a fierce advocate for these changes. Our goal was to find a reasonable increase in the minimum wage.

Below is a summary of the law, which was signed by the Governor (Public Act 368 of 2018).

Public Act 368 of 2018
(Legislative Changes Signed into Law 12/14/18)

$12.05 minimum wage 

Increases from $9.25 per hour as follows:

  • End of March, 2019: $9.45/hour
  • 1/1/20:  $9.65/hour
  • 1/1/21:  $9.87/hour
  • 1/1/22:  $10.10/hour
  • 1/1/23:  $10.33/hour
  • 1/1/24:  $10.56/hour
  • 1/1/25:  $10.80/hour
  • 1/1/26:  $11.04/hour
  • 1/1/27:  $11.29/hour
  • 1/1/28:  $11.54/hour
  • 1/1/29:  $11.79/hour
  • 1/1/30:  $12.05/hour

Inflation

No inflationary increases.

Tipped Minimum Wage1

Minimum wage remains tied to 38% of the regular minimum wage rate. 

1Under the law, all tipped employees are guaranteed to make at least the minimum wage. If their tips plus the tipped employee minimum wage does not equal or exceed the regular minimum wage, the employer must pay any shortfall to the employee. Failure to comply results in fines and fees.