New Year, New Wage

New Year, New Wage

Starting January 1, 2024, the minimum wage increased in Michigan. Depending on an anticipated ruling by the Michigan Supreme Court, it could increase again this same year. We lay out the new rates below, but first a brief recap of how we got here and what remains to be decided.

In 2018, a pending ballot initiative proposed a substantial, immediate increase in the minimum wage. Seeking to preempt the measure, the State Legislature passed the Improved Workforce Opportunity Wage Act, essentially adopting and simultaneously amending the ballot initiative to codify annual increases, subject to the unemployment rate, but slowing the rate of increase in the minimum wage. The ballot organizers sued the legislature and won a victory in the Court of Claims, which held that the “adopt and amend” legislation was unconstitutional. But in January 2023, the Michigan Court of Appeals reversed the Court of Claims’ decision.

The ongoing dispute reached the Michigan Supreme Court in December 2023, and we expect its decision before the end of 2024. If it upholds the Court of Appeals’ decision in favor of the legislature’s “adopt and amend” approach, the new rates explained below will continue in place until at least 2025. If the Supreme Court reverses “adopt and amend,” the higher rates proposed in the 2018 ballot initiative may kick in immediately.

For now, here are the applicable rates for Michigan:

Adults 18 and older: $10.33 per hour

Minors 16-17: $8.78 per hour

Tipped Employees: $3.93 per hour

New hires 16-19: $4.25 per hour for first 90 days (unchanged)

Failure to track and pay the required minimum wage (and corresponding overtime if applicable) carries significant penalties for employers. If you do not understand the rules, please contact us for help at (248) 477-6300 or info@wrightbeamer.com.

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