Employer Alert: Minimum Wage Increase Effective January 1, 2024

Effective January 1, 2024, Michigan’s minimum wage rate for individuals 18 years and older will increase from $10.10 per hour to $10.33 per hour. This is required under Michigan’s 2018 Workforce Opportunity Wage Act, which provides for steps to move the minimum wage to $12.05 by 2030, as a response to inflation. 

Michigan’s Improved Workforce Opportunity Wage Act of 2018 sought to establish an annual schedule of wage increases. However, there is no increase if the unemployment rate was greater than 8.5% during the proceeding calendar year. In 2023, the unemployment rate in Michigan fell to 3.9% and was below 4% for most of the year. This decline means that the under the terms of the Act, the increase to $10.33 per hour is permitted. 

Additionally, minors aged 16-17 years old in Michigan may be paid a youth subminimum wage that is 85% of the adult minimum wage. That rate thus will increase from $8.59 to $8.78. Additionally, the tipped employee rate of hourly pay increases from $3.84 to $3.93. The hourly training wage of $4.25 for newly hired employees between the ages of 16-19 for their first 90 calendar days of employment remains unchanged in 2024. 

It is possible, however, that the minimum wage rates will see further increases in 2024, due to a pending lawsuit filed against the Michigan Legislature, challenging its “adopt and amend” action in 2018. That year, facing a ballot initiative that would have seen substantial increases to Michigan minimum wage rates, the Legislature pre-emptively adopted the proposed law, and then amended it to cut back on the intended increases. Lawsuits challenging this practice were filed, and reached the Michigan Supreme Court just this month. A decision on the legality of the “adopt and amend” strategy could come sometime in 2024. If the Court finds that the Legislature acted unlawfully, the amendments to the act that was on the ballot could be nullified, triggering the higher rates contained in the ballot proposal (which the Legislature enacted). The Court might also decide to delay implementation of the higher rates, or simply conclude that “adopt and amend” is legal. 

Nemeth Bonnette Brouwer PC will continue to monitor changes to Michigan’s wage laws, and the pending Michigan Supreme Court decision. Feel free to contact any of the attorneys at the firm with your questions.