New minimum wage for Michigan employees

Effective January 1, 2018, Michigan workers will see an increase in the minimum wage rate from $8.90 to $9.25. This new change to state law marks the final step of a gradual 25 percent increase of the minimum wage that started in 2016.

New online resources are available at to help workers and employers understand the facts as the new rate takes effect.

On May 27, 2014, the Workforce Opportunity Wage Act, Public Act 138 took effect. Act 138 applies to employers in Michigan who have two or more employees age 16 and older. A copy of Act 138, along with the required poster may be downloaded from the Wage and Hour Program website.

Act 138’s youth training wage provision allows an employer to pay a newly hired employee age 16 to 19 $4.25 per hour for the first 90 days of employment.

Act 138 also allows an employer in Michigan to pay 85 percent of the minimum wage – or $7.86 per hour as of Jan. 1 – to employees aged 16 and 17.

Act 138 allows employers to take a tip credit on minimum wage under certain conditions for those employees who customarily and regularly receive tips.

The following conditions apply to taking a tip credit on the state minimum wage rate:
• The employee is in a position that customarily and regularly receives gratuities from a guest, patron, or customer for services rendered to that guest, patron, or customer.
• If the gratuities plus the minimum hourly wage rate do not equal or exceed the minimum hourly wage otherwise established, the employer pays any shortfall to the employee.
• The gratuities are proven gratuities as indicated by the employee’s declaration for Federal Insurance Contribution Act.
• The employee was informed by the employer of the provisions of Act 138.
• If a credit is taken for gratuities received by an employee, then the employment records for each pay period shall contain the credit that was taken along with a written statement of the amount of gratuities received by the employee. The statement shall be signed by the employee and dated before the date the paycheck was received.

The minimum hourly rate of pay for a worker subject to tip credit provisions, as of Jan. 1, will be $3.52, provided that reported tips per hour average at least $5.73.

Overtime Requirements
Employees covered by the overtime provisions of the Workforce Opportunity Wage Act must be paid one and a half times their regular rate of pay for hours worked exceeding 40 hours in a workweek.

For further questions or information, call the Wage and Hour Program toll free at 855-464-9243 or visit

Act 138 is enforced by the Wage and Hour Program within the Michigan Occupational Safety and Health Administration (MIOSHA).