NEW LAW: Michigan Amends Improved Workforce Opportunity Act

Earlier this year, we reported that Michigan had passed a new paid sick leave law (NEW LAW: Michigan To Incrementally Increase Minimum Wage to $12.00 Per Hour).  In this article, we cautioned employers that since the law that was initially passed was scheduled to be a ballot initiative (the  Michigan Minimum wage Initiative) in the November 2018 election, the Michigan legislature would likely amend the law (and in amending the law, would make substantial changes to the minimum wage increase).

Well, the Michigan legislature did not disappoint.  On December 14, 2018, Michigan Governor Rick Snyder signed Senate Bill 1171 (the Improved Workforce Opportunity Act) into law.  This new law while it still increases Michigan’s minimum wage to over $12.00 per hour, it changes the planned increase in two important ways:

  1. It slows the rate of increase to between 21 and 26 cents per hour annually, which means that the minimum wage in Michigan will not reach the $12.00 per hour mark until January 1, 2030 and
  2. It removes the elimination of the tip credit and allows employer to continue paying their tipped employees a minimum wage that is 38% of the state minimum wage wage.

Under the new law, Michigan’s minimum wage (and tipped minimum wage) will increase as follows:

Date Of Increase Minimum Wage Tipped Minimum Wage
Current Minimum Wage $9.25 $3.52
4/1/2019 $9.45 $3.59
1/1/2020 $9.65 $3.67
1/1/2021 $9.87 $3.75
1/1/2022 $10.10 $3.84
1/1/2023 $10.33 $3.93
1/1/2024 $10.56 $4.01
1/1/2025 $10.80 $4.10
1/1/2026 $11.04 $4.20
1/1/2027 $11.29 $4.29
1/1/2028 $11.54 $4.39
1/1/2029 $11.79 $4.48
1/1/2030 $12.05 $4.58

It is anticipated that the first scheduled increase in Michigan’s minimum wage will take place on April 1, 2019.  It is recommended that all employers prepare for this increase.