Notice to Employers: Michigan’s Minimum Wage Will Increase January 1
December 16, 2025
Article written by the SBAM Policy Team for SBAM’s Lansing Watchdog newsletter
With the implementation of Michigan’s Earned Sick Time Act earlier this year, the accompanying legislative changes to Michigan’s minimum wage law were underdiscussed, but a new deadline is approaching that all employers should be aware of. Starting January 1, 2026, Michigan’s minimum wage will increase from $12.48 to $13.73 per hour.
All employers should be aware that effective January 1, 2026:
- Michigan’s minimum hourly wage rate will increase from $12.48 to $13.73 per hour.
- For tipped wage employees, the hourly rate of pay increases to $5.49 per hour, which is 40% of the full minimum wage.
- Michigan law requires that tips received plus wages paid equal or exceed the hourly minimum wage rate. This means that tipped employees must receive at least $8.24 in tips per hour to earn the tipped wage above.
- For minors earning the 85% rate, their hourly wage rate will increase from $10.60 to $11.67
- For newly hired employees under the age of 20, employers may still pay a training wage of $4.25 per hour for that employee’s first 90 days of employment.
Beginning January 1, 2027, there will be another set of minimum wage increases:
- The minimum hourly wage rate will increase from $13.73 to $15.00.
- For tipped employees, the minimum hourly wage will increase from $5.49 to $6.30.
- The 85% rate for minors will increase to $12.75.
Background:
In its September 2024 Mothering Justice v. Attorney General ruling, the Michigan Supreme Court overturned a legislative maneuver referred to as “Adopt and Amend”, where 2018 legislators adopted a voter-initiated ballot measure into state law, and later amended it following a compromise agreement to lessen the impact of the original initiative. In the decision, the Court ruled that the legislature’s actions were unconstitutional, and that the proposals should be implemented into state law as originally adopted starting February 21, 2025 – in accordance with a schedule they proposed.
Prior to the February 21 deadline, legislators reached another deal to preserve Michigan’s tipped wage credit and ease implementation burdens associated with the state’s new Earned Sick Time Act. This deal includes various changes to Michigan’s sick time and wage requirements, including the minimum wage increases set to go into effect early next year.
Read more about the new changes to the law.
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