Michigan Increases Minimum Wage, Repeals Some Exemptions

Author: Michael Cardman, XpertHR Legal Editor

May 28, 2014

Michigan's governor on May 27 signed a law raising the state's minimum wage and eliminating certain minimum wage exemptions.

The new law (S.B. 934), will raise Michigan's minimum wage from its current level of $7.40 to:

  • $8.15 per hour beginning September 1, 2014;
  • $8.50 per hour beginning January 1, 2016;
  • $8.90 per hour beginning January 1, 2017; and
  • $9.25 per hour beginning January 1, 2018.

Beginning on April 1, 2019, and every April 1 thereafter, the minimum wage will be adjusted for inflation "by an amount determined by the state treasurer at the end of the preceding calendar year to reflect the average annual percentage change in the consumer price index for the most recent 5-year period for which data are available." The inflation adjustment may not exceed 3.5 percent.

An advocacy group called the Raise Michigan Coalition announced in an email press release that they had gathered enough signatures to place a referendum on this November's ballot that would raise Michigan's minimum wage even higher and faster, to $10.10 per hour by January 2017. Michigan's Senate Majority Leader told the Associated Press that S.B. 934 was intended to repeal and replace the law that the ballot initiative aims to amend. It remains unclear whether the new law could prevent the $10.10 measure from appearing on the November ballot, and the issue could come before the courts, the AP reported.

By repealing the former minimum wage law, it appears that the new law eliminates minimum wage and overtime exemptions that were available for the following employees under the now-repealed MCLS § 408.394:

  • Casual babysitters under the age of 18 (as defined under federal law);
  • Students, workers who have disabilities for the work being performed, messengers, apprentices and student learners employed under special certificates (as defined under federal law);
  • Persons employed in summer camps for no more than four months; and
  • Certain agricultural employees who harvest crops.

The overtime-only exemptions found at MCLS § 408.384a were restored under the new law.

Effective September 1, 2014, the new law will also raise the minimum cash wage for tipped employees to 38 percent of the current minimum wage. As a result, the minimum cash wage for tipped employees will increase to:

  • $3.10 per hour beginning September 1, 2014;
  • $3.23 per hour beginning January 1, 2016;
  • $3.38 per hour beginning January 1, 2017; and
  • $3.52 per hour beginning January 1, 2018.

Michigan is the seventh state to enact a law increasing the minimum wage this year, following Connecticut, Delaware, Hawaii, Maryland, Minnesota and West Virginia. Vermont's legislature has also passed a bill; its governor praised the bill's passage but has not yet signed it.