The Michigan Department of Labor and Economic Opportunity has announced that the state’s scheduled minimum wage rate increase is not expected to go into effect on January 1, 2021. Michigan’s minimum wage will therefore remain $9.65 an hour. The tip credit will remain $5.98 an hour (the minimum hourly wage for tipped employees will remain $3.67 an hour).
Scheduled minimum wage increases only occur when Michigan’s annual unemployment rate for the preceding calendar year is below 8.5%, as determined by the federal Bureau of Labor Statistics (part of the U.S. Department of Labor). The annual average from January through October currently sits at 10.2% and is “highly unlikely” to dip below the 8.5% threshold when the final 2020 unemployment rate for Michigan is announced.
Future Years
A high annual unemployment rate delays the scheduled minimum wage increase by one year, so the earliest the next scheduled increase could occur would be January 1, 2022. If the annual unemployment rate for 2021 remains higher than the threshold of 8.5%, the minimum wage increase would continue to be delayed.
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Lia Coniglio, Esq., is Managing Editor of PayState Update and Manager of State Payroll Information Resources for the APA
Mavanee Anderson, Esq., is Editor of State Payroll Information Resources for the APA
