December 17, 2018
The Michigan Chamber applauds the Michigan Senate and House for passing legislation to make Michigan’s new minimum wage law workable for employers. The Legislature adopted a ballot proposal in September that, if left to stand, would have taken the minimum wage from $9.25 to $12 per hour by January 1, 2022. This would have resulted in Michigan having one of the highest minimum wage rates in the country, thereby making Michigan uncompetitive in the race for jobs and forcing many employers to make tough business decisions, including cutting back staffing hours, increasing costs and reducing other investments in employees or the business. Michigan’s minimum wage already outpaces Indiana ($7.25), Illinois ($8.25), Ohio ($8.10) and Wisconsin ($7.25).
Below is a summary of the adopted ballot proposal and the legislation, which was signed into law as Public Act 368 of 2018 by Governor Snyder on December 14, 2018.
| Public Act 337 of 2018 (Ballot Proposal Turned Law – September 2018) |
Public Act 368 of 2018 (Legislative Changes Signed into Law 12/14/18) |
| $12 minimum wage
Increases from $9.25 per hour as follows:
|
$12 minimum wage
Increases from $9.25 per hour as follows:
|
| Inflation
Minimum wage indexed to the rate of inflation beginning in 2024 (i.e., put on autopilot). Tipped minimum wage tied to the rate of inflation beginning on 1/1/25.
|
Inflation
No inflationary increases. |
| Tipped Minimum Wage
Increases from $3.52 per hour (38% of the minimum wage) as follows:
|
Tipped Minimum Wage1
Minimum wage remains tied to 38% of the regular minimum wage rate. |
1Under the law, all tipped employees are guaranteed to make at least the minimum wage. If their tips plus the tipped employee minimum wage does not equal or exceed the regular minimum wage, the employer must pay any shortfall to the employee. Failure to comply results in fines and fees.
