Reminder: Minimum Wage Increase Coming Sept. 1st

In May 2014, the Michigan legislature passed an increase to Michigan’s minimum wage law. As a reminder to all business owners and employers in northern Michigan, the first step of the increase starts this year, on September 1, 2014, when the minimum hourly wage rises from $7.40 per hour to $8.15 per hour.

Minimum Wage (Employees not receiving gratuities)

Starting September 1, 2014, the steps of the wage increase for employees not receiving gratuities are as follows:

• Beginning September 1, 2014, $8.15.
• Beginning January 1, 2016, $8.50.
• Beginning January 1, 2017, $8.90.
• Beginning January 1, 2018, $9.25.
• Beginning in January 2019, the minimum wage will be adjusted based on the annual percentage change in the consumer price index.

Minimum Wage (Employees receiving gratuities)

Starting September 1, 2014, the hourly wage for employees who receive gratuities will be set at 38% of the regular minimum wage. The estimated increases are as follows:

• Beginning September 1, 2014, $3.10.
• Beginning January 1, 2016, $3.23.
• Beginning January 1, 2017, $3.38.
• Beginning January 1, 2018, $3.51.
• Beginning in January 2019, the wage rate for gratuity earners will be 38% of the adjusted wage rate.

How will the minimum wage rate be adjusted beginning in 2019?
The adjusted minimum wage will be set by the State Treasurer and based on the midwest consumer price index (CPI), which is “the most comprehensive index of consumer prices available for the midwest region from the bureau of labor statistics of the United States department of labor.” (2014 Public Act 138, MCL 408.414(2)). Annual increases from 2019 onward are not to exceed 3.5%.

Where you can find the adjusted wage beginning in 2019
The adjusted wage will be posted on the website of the Wage and Hours Division of the Department of Licensing and Regulatory Affairs (LARA). The adjusted wage shall be posted by February 1st of the year it is adjusted, and will be effective beginning April 1st of that year. (2014 Public Act 138, MCL 408.414(2)). Questions on the adjusted wage or the process can be directed to the Wage and Hours Division. The division’s contact information can be found here.

Are there any exceptions?
Yes. The annual adjustments based on the CPI that begin in 2019 will not take effect if the unemployment rate for the state of Michigan (as determined by the Bureau of Labor Statistics in the U.S. Department of Labor) is “8.5% or greater for the year preceding the prescribed increase.” (MCL 404.414(3)).

Questions?

If you have any further questions on the increases to the minimum wage beginning September 1, 2014, in the state of Michigan, do not hesitate to contact Chamber Alliance Government Relations director Kent Wood at (231) 995-7109, or kentw@tcchamber.org.