Minimum Wage Increase Update

On December 11, 2020, the Michigan Wage and Hour Division announced that the state’s scheduled minimum wage increase (to $9.87 per hour) was not expected to take effect on January 1, 2021.

Although a minimum wage increase was slated for the first of the year, under Michigan’s Improved Workforce Opportunity Wage Act of 2018, scheduled minimum wage increases are prohibited when the state’s annual unemployment rate for the preceding calendar year exceeds 8.5% (as reported by the U.S. Bureau of Labor Statistics). The average unemployment rate in Michigan exceeded 10% for the months of January through November. (Final Michigan-specific December data has not yet been released but is not expected to alter the analysis.) Accordingly, Michigan’s minimum wage for 2021 remains at $9.65 per hour, the 85% rate for minors remains at $8.20 per hour, and the tipped employee rate of pay stays at $3.67 per hour.

In contrast, the following states implemented minimum wage increases on January 1, 2021: Alaska, Arizona, Arkansas, California, Colorado, Florida, Illinois, Maine, Maryland, Massachusetts, Minnesota, Missouri, Montana, New Jersey, New Mexico, New York, Ohio, South Dakota, Vermont, and Washington.

Provided that Michigan’s 2021 annual unemployment rate remains below 8.5%, the minimum wage rate will finally increase to $9.87 on January 1, 2022.

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