Minimum Wage: Michigan
Federal law and guidance on this subject should be reviewed together with this section.
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Authors: Robert L. Duty and Christopher M. Miller, Dykema
Summary
- Covered employers must pay nonexempt employees a minimum wage for each hour worked. See Minimum Wage.
- Under certain conditions, tipped employees may be paid a cash wage lower than the minimum wage. See Tip Credit.
- Some employees may be paid less than the minimum wage if certain conditions are met. See Subminimum Wages.
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Minimum Wage
Effective February 21, 2025, covered employers must pay nonexempt employees a minimum wage of $12.48 for each hour worked.
The minimum wage will increase, as follows:
- January 1, 2026: $13.73
- January 1, 2027: $15.00
- January 1, 2028, and every January 1 thereafter: Adjusted for inflation
Inflation adjustments are calculated by multiplying the otherwise-applicable minimum wage by the 12-month percentage increase, if any, in the Bureau of Labor Statistics (BLS) Consumer Price Index for the Midwest Region (CPI-U) or a successor index based on the most recent 12-month period for which data are available. These annual inflation adjustments will be paused if unemployment in Michigan was 8.5% or greater for the immediately preceding year.
+MCLS § 408.934, as amended by +2025 Bill Text MI S.B. 8.
Employer Coverage
Michigan's minimum wage law applies to any person, firm, or corporation - including the state and its political subdivisions, agencies and instrumentalities, and a person acting in the interest of the employer - that employs two or more employees at any time within a calendar year. An employer is subject to the minimum wage law during the remainder of that calendar year. +MCLS § 408.932.
Michigan's minimum wage law does not apply to an employer that is subject to the minimum wage provisions of the federal Fair Labor Standards Act, unless those federal minimum wage provisions would result in a lower minimum hourly wage. Currently, the federal minimum wage is lower than the Michigan minimum wage, so this exemption does not apply. +MCLS § 408.940.
Tip Credit
Employers may pay a tipped employee a lower cash wage as long as:
- The employee receives gratuities in the course of their employment;
- The gratuities plus the cash wage equal or exceed the minimum wage for non-tipped employees;
- The gratuities are proven gratuities as indicated by the employee's declaration for purposes of the Federal Insurance Contribution Act;
- The entirety of the gratuities are retained by the employee who receives them (however, employees may voluntarily share their gratuities as part of a tip pool); and
- The employee was informed by the employer of these provisions in writing, at or before the time of hire, and gave written consent.
If the cash wage plus the tips an employee receives for each hour worked fall short of the minimum wage, the employer must make up the difference.
Employers must provide employees and consumers written notice of their plan to distribute service charges.
| Date | Minimum Wage | Minimum Cash Wage | Maximum Tip Credit |
|---|---|---|---|
| Current | $12.48 | $4.75 (38% of minimum wage) | $7.73 (62% of minimum wage) |
| January 1, 2026 | $13.73 | $5.50 (40% of minimum wage) | $8.23 (60% of minimum wage) |
| January 1, 2027 | $15.00 | $6.30 (42% of minimum wage) | $8.70 (58% of minimum wage) |
| January 1, 2028 | Adjusted for inflation | 44% of inflation-adjusted minimum wage | 56% of inflation-adjusted minimum wage |
| January 1, 2029 | Adjusted for inflation | 46% of inflation-adjusted minimum wage | 54% of inflation-adjusted minimum wage |
| January 1, 2030 | Adjusted for inflation | 48% of inflation-adjusted minimum wage | 52% of inflation-adjusted minimum wage |
| January 1, 2031, and every January 21 thereafter | Adjusted for inflation | 50% of inflation-adjusted minimum wage | 50% of inflation-adjusted minimum wage |
+MCLS § 408.934d, as amended by +2025 Bill Text MI S.B. 8.
Coverage / Definitions
Gratuities means tips or voluntary monetary contributions received by an employee from a guest, patron or customer for services rendered to that guest, patron or customer and that the employee reports to the employer for purposes of the Federal Insurance Contributions Act.
A tipped employee means an employee who receives gratuities and meets the tip credit requirements described above. +MICH. ADMIN. CODE R 408.701.
Employee Property
Unless there is a valid and voluntary tip-sharing agreement, tips are the property of the employee who receives them, regardless of whether the employer claims the tip credit. +MCLS § 408.934d(4), as amended by +2025 Bill Text MI S.B. 8.
Employee Notice
As discussed above, employers must inform employees of Michigan's tip credit provisions in order to claim a tip credit.
Tip Pools
As noted above, the entirety of the gratuities must be retained by the employee who receives them. However, an employee may voluntarily share their gratuities with another employee if the other employee is directly or indirectly part of the chain of service and the other employee's duties are not primarily managerial or supervisory. +MCLS § 408.934d(1)(d), as amended by +2025 Bill Text MI S.B. 8.
Recordkeeping
An employer must keep certain records for each tipped employee for whom it claims a minimum wage tip credit.
Subminimum Wages
Trainees and minors may be paid less than the minimum wage if certain conditions are met. Employers may not terminate an existing employee or reduce an existing employee's hours, wages or benefits in order to hire a new employee at these subminimum wages.
Trainees
For their first 90 days of employment, new employees who are under 20 years of age may be paid a training wage of $4.25 per hour. +MCLS § 408.934b(1).
Minors
Except for employees subject to the training wage, the minimum wage for employees under 18 years of age is 85 percent of the general minimum wage. +MCLS § 408.934b(2).
Communications in Postings Required by Michigan Law
Michigan requires a poster relating to the minimum wage and other requirements. +MCLS § 408.417.
Future Developments
There are no developments to report at this time. Continue to check HR & Compliance Center regularly for the latest information on this and other topics.