Monthly Archives: December 2016

Michigan’s New Minimum Wage

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minimum-wageA little over two years ago, Governor Snyder signed a law that increased the minimum wage.  Under this law, the minimum wage for 2017 will be $8.90.  It will again increase in 2018 to $9.25 per hour.  Beginning in January 2019, the minimum wage will be indexed for inflation.  The minimum wage increase for each year will not take effect if the unemployment rate in Michigan is 8.5% or more in the year prior to the year of the minimum wage increase.

Training Wage is Still Available

As existed under prior law, an employer may pay a new employee who is under age 20 an hourly training wage of $4.25 for the first 90 days of that employee’s employment.  After 90 days has passed, the employee must be paid at least minimum wage.

 Minor Minimum Wage is Still Available

The minimum wage for an employee who is less than 18 years of age is 85% of the general minimum wage listed above.  This is not a new rule.

 Minimum Wage for Tipped Employees

The current minimum wage for tipped employees is $3.23 per hour.  It will increase to $3.38 per hour in 2017.  To qualify for this lower rate, the following must occur:

  • the employee receives gratuities in the course of employment
  • the tipped minimum wage plus the gratuities received must be at least equal to the general minimum wage (i.e., in 2016 the tips received per hour plus the tipped minimum wage of $3.23 must be at least equal to the general minimum wage of $8.50).  If there is a shortfall, the employer must pay the shortfall to the employee.

 Overview of Minimum Wage Rates

 The schedule of minimum wage increases under the law signed two years ago is:

Minimum Wage

Minimum Wage for Tipped Employees Minimum Wage

for Minors

Training Wage (first 90 days only)

Prior to September 1, 2014

$7.40

$2.65 $6.29 $4.25
September 1, 2014

$8.15

$3.10

$6.93

$4.25

January 1, 2016

$8.50

$3.23

$7.23

$4.25

January 1, 2017

$8.90 $3.38 $7.57

$4.25

January 1, 2018

$9.25

$3.52

$7.86

$4.25

 

If you have any questions on how this applies to you, please feel free to give us a call.

 

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Buzzkill Disclaimer:  This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.

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