by Bruce Walker
Michigan’s current $9.87 per hour full minimum wage will increase to $10.10 on Jan. 1.
Another increase could transpire in the coming year as well, depending on a determination by the Michigan Court of Appeals.
In the meantime, minimum wages for tipped employees will increase New Year’s Day from the current $3.75 per hour to $3.84 per hour, reflecting 38% of the full minimum wage. Minor workers aged 16 and 17 will receive a raise when the new $8.59 per hour minimum-wage kicks, which is 85% of the full minimum wage. Remaining unchanged is the $4.25 per hour training wage for the first 90 days of employment for new hires aged 16 to 19.
The rises were implemented by Public Act 337, which was passed by the Republican-controlled Legislature in September 2018. PA 337 and the Improved Workforce Opportunity Wage Act aimed to “fix minimum wages for employees within this state; prohibit wage discrimination; provide for a wage deviation board; provide for the administration of the act; prescribe penalties for the violation of the act….”
Depending on the outcome of pending litigation at the court of appeals, Michigan’s full minimum wage could jump to $13.03 per hour and wages for tipped employees could rise to $11.73 per hour. At issue is whether the Legislature complied with the Michigan Constitution when it adopted and amended the minimum wage and paid medical leave laws approved by ballot initiatives passed by Michigan voters.
Although the Michigan Court of Claims ruled the two “adopt and amend” laws unconstitutional, that decision was stayed on appeal until Feb. 19, although a final ruling is anticipated either in January or the first day of February.
According to the Michigan Chamber of Commerce: “If left to stand, the Court of Claims ruling could force many Michigan businesses to make significant changes to their paid time off policies and procedures – even those who offer generous benefits today. The same is true for wages. Although it is worth noting that many employers are currently paying entry-level wages above and beyond $12 an hour, it is highly expected that the change would create a new ‘floor’ and push up wages for all hourly employees. It is also expected that an overnight elimination of the tip credit, which is a 156% labor cost inflation, will put the restaurant industry into a tailspin.”
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.