Michigan’s Scheduled Minimum Wage Increase Not Expected to Take Effect Next Month

The Michigan Bureau of Employment Relations, Wage and Hour Division announced that the state’s scheduled minimum wage increase is not expected to go into effect on January 1, 2021.

The Improved Workforce Opportunity Wage Act of 2018 prohibits minimum wage increases when the state’s annual unemployment rate for the preceding year is above 8.5%. As a result of the coronavirus pandemic, the state’s unemployment average from January to October was more than 10%. 

While Michigan’s October unemployment rate continued its downward trend, the annual average from January through October is 10.2% and is highly unlikely to dip below the 8.5% threshold by year-end.

If, as expected, the annual unemployment rate does not fall below 8.5%, then effective January 1, 2021:

• Michigan’s minimum wage will remain at $9.65 an hour.
• The 85% rate for minors age 16 and 17 remains $8.20 an hour.
• Tipped employees pay remains $3.67 an hour.
• The training wage of $4.25 an hour for newly hired employees age 16 to 19 for their first 90 days of employment remains unchanged.

The state’s minimum wage rate will next increase to $9.87 in January 2022 provided the 2021 annual unemployment rate is less than 8.5%.

For more information, visit the Department of Labor and Economic Opportunity’s website.