Employer Alert: Two Minimum Wage Increases Are Coming, On January 1 and February 21, 2025

Dec. 30, 2024

Effective January 1, 2025, Michigan’s minimum wage rate for individuals 18 years and older will increase from $10.33 per hour to $10.56 per hour. The tipped minimum wage – the rate lower than minimum wage paid to tipped workers who are expected to make up the difference with gratuities – will increase from $3.93 to $4.01. Additionally, 16- and 17-year-olds in Michigan may be paid a youth subminimum wage that is 85% of the adult minimum wage. That rate thus will increase from $8.78 to $8.98. The hourly training wage of $4.25 for newly hired employees between aged 16-19 for their first 90 calendar days of employment remains unchanged in 2024.

These changes are required under Michigan’s 2018 Workforce Opportunity Wage Act, which provided steps to move the minimum wage to $12.05 by 2030, as a response to inflation.

That is not it for minimum wage increases in 2025, though. This summer, the Michigan Supreme Court ruled that the Michigan Legislature acted unconstitutionally when it adopted a ballot initiative on minimum wages and then amended it in the same session. This decision thereby reinstated the original terms of the ballot initiative. To give businesses time to prepare (and perhaps to give the Legislature time to fix the situation), the Court delayed the effective date of the increases outlined in the ballot proposal until February 21, 2025.

So – unless the Legislature acts before February 21, 2025, these additional increases will go into effect:

Minimum wage: $12.48
Tipped minimum wage: $ 5.99
Minor minimum wage: $10.61

The minimum wage and minor minimum wage will continue to increase each year until the base minimum wage reaches $14.97 per hour in 2028. After that, the State Treasurer will set an inflation-adjusted minimum wage.

The tipped minimum wage, the source of considerable lobbying from the restaurant industry, will increase gradually until 2030, when it is increased to the same level as the regular minimum wage and eliminated altogether. While customers can still tip even with the higher rates, servers and bartenders are concerned that some patrons will be less generous, and so they have also lobbied for changes to these laws.

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