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Michigan’s minimum wage rates will see two major hikes in early 2025, prompting adjustments for employers and affecting standard, tipped, and minor employees.
Michigan Supreme Court Ruling Spurs Wage Adjustments
LANSING, MI – Employers across Michigan will need to prepare for a series of significant minimum wage increases following a recent ruling by the Michigan Supreme Court. The changes stem from reinstated voter-initiated minimum wage and paid sick leave laws and will take effect in early 2025. The Michigan Department of Labor and Economic Opportunity announced that these wage hikes will occur in two stages—on January 1 and again on February 21, 2025.
Detailed Wage Changes for 2025
From January 1, 2025, through February 20, 2025, the state’s minimum wage will rise modestly, with the standard minimum wage increasing from $10.33 to $10.56 per hour. Minors under 18 will see a bump from $8.78 to $8.98 per hour, while the wage for tipped employees will increase from $3.93 to $4.01. The training wage for newly hired employees under 20 years old during their first 90 days of employment will remain at $4.25 per hour.
The more substantial changes will take place on February 21, 2025, when the standard minimum wage jumps to $12.48 per hour. Wages for tipped employees will rise to $5.99 per hour, while minors under the 85% rate will earn $6.49 per hour. Tipped workers must also report an average of $10.61 per hour in tips.
Gradual Wage Hikes Through 2028
The new legislation outlines further increases through 2028, with annual adjustments scheduled to start that year based on inflation. For instance, the standard minimum wage will rise to $13.29 per hour in February 2026, $14.16 in 2027, and $14.97 in 2028. Similar adjustments are planned for tipped and minor employees.
Employers should note that tipped employees’ wages will gradually increase as a percentage of the standard minimum wage, reaching 90% by 2029. This phased approach is designed to align tipped wages more closely with non-tipped wages over time.
Employers Must Prepare for Compliance
Michigan employers are encouraged to update their payroll systems and policies to accommodate these changes and to monitor future adjustments. Payroll practices for standard employees, minors, and tipped workers must be adjusted accordingly, and employers are advised to be vigilant regarding the annual inflation-based adjustments starting in 2028.
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