Michigan Minimum Wage, What happens next? If you own a small business in Michigan, you likely already know about the recent minimum wage increase. And you may have wondered what will happen next, especially after the Michigan Court of Appeals recently upheld a lower court ruling in favor of national advocacy group One Fair Wage.
That group’s petition for a ballot measure to raise the minimum wage from $8.59 an hour to $12 per hour by 2022 was approved. But the state Legislature adopted and amended that ballot measure, a controversial maneuver that was later ruled unconstitutional.
Michigan Minimum Wage in 2023
In 2023, the Michigan minimum wage will increase to $12 an hour with yearly increases thereafter based on inflation but now Michigan Minimum Wage $10.10 per hour. Employees ages 16 to 19 can receive a training wage of $4.25 per hour for their first 90 days of employment at any job, which could have been $3 more.
Tipped employees who get their pay primarily from tips will see a raise to 90% of the standard minimum wage. The tipped minimum wage will also match the regular wage in 2024.
Experts say that a higher minimum wage can push stores to cut benefits or increase work hours, which could affect the quality of life for lower-wage workers and reduce wages across the board. This could negatively impact the state economy and put pressure on Michigan businesses to compete in a global marketplace with low labor costs.
In 2018, a coalition called One Fair Wage circulated a petition to have voters consider a proposal that would have increased the minimum wage to $12 an hour in 2022 and eliminated the tipped minimum wage “tip-credit” by 2024. Business and hospitality advocacy groups opposed the ballot initiative and fought to prevent it from reaching the November 2018 vote.
Michigan Minimum Wage in 2022
Michigan’s minimum wage is set to increase in 2022. The state’s Improved Workforce Opportunity Wage Act will increase the minimum wage to $9.87. This increase will take effect on January 1, 2022, with tipped workers getting an increase to 38% of the standard rate.
A minimum wage increase could be a boon for low-wage workers, but it might also hurt small businesses. A recent study by economists at the Congressional Budget Office found that a minimum wage increase would be beneficial to most low-wage workers, but it might hurt business owners as they try to absorb higher costs.
In 2018, two voter initiatives – the Improved Workforce Opportunity Wage Act and the Earned Sick Time Act – were presented to the Michigan Legislature. The ballot measures would raise the minimum wage and require most employers to provide up to 72 hours of paid sick leave annually.
In a controversial strategy, referred to as adopt and amend, the state’s Republican-led Legislature adopted the ballot drives before they reached the voting booth in November. They then changed the language of both laws – which would have been harder to change if voters had approved them – before they went into effect.
Michigan Minimum Wage in 2021
Earlier this year, the Michigan Legislature passed an initiative that would raise the minimum wage and expand sick leave rights for employees. However, it was recently held in limbo due to an upcoming court ruling.
The court of appeals decision delayed enforcement of the initiative until February. Now, employers will have to pay a higher minimum wage starting in 2023 and provide more paid sick leave.
According to the law, the minimum wage must increase each year unless the state’s unemployment rate falls below 8.5 percent. This is a failsafe provision included in the Improved Workforce Opportunity Wage Act, passed last year.
In addition, the law requires that tipped workers be paid at least 40 percent of the non-tipped minimum wage. Some critics of the proposal argue that raising the tipped wage will cause customers to tip less, which could hurt business owners.
The Michigan Restaurant and Lodging Association recently surveyed more than 300 restaurants and hotels across the state, and found that most operators would have to cut costs to keep their businesses open. Some even said they would have to lay off workers, reduce operating hours and raise prices.