(The Center Square) – The Michigan Department of Labor and Opportunity released guidelines on how the state will phase in a higher minimum wage over the next five years and beyond, altering the current tipping system and imposing major challenges to how the hospitality industry currently operates.
The minimum wage in Michigan is currently $10.33 per hour for non-tipped workers and $3.93 per hour for tipped workers.
On Feb. 21, the minimum wage will rise to $12.48 per hour for non-tipped workers and $5.99 for tipped workers, making the tipped minimum wage 48% of the minimum wage.
In 2026, the tipped minimum wage, $7.97, will be 60% of the non-tipped minimum wage, $13.29.
In 2027, the tipped minimum wage, $9.91, will be 70% of the non-tipped minimum wage, $14.16.
In 2028, the tipped minimum wage, $11.98, will be 80% of the non-tipped minimum wage, $14.97.
Beginning in October 2028, the state treasurer will calculate the minimum wage increase based on the rate of inflation. Minimum wage increases will be paused if the unemployment rate reaches 8.5% or greater.
In 2029, the tipped minimum wage will be 90% of the non-tipped wage, which is estimated to exceed $15 per hour.
By 2030, the tipped credit will be eliminated altogether, meaning all workers, whether tipped or not tipped, will receive the same minimum wage.
Supporters of raising the state’s minimum wage have encountered political and legal setbacks for years, finally scoring a win in July. Michigan’s Supreme Court ruled 4-3 that the state’s Republican-led legislature in 2018 acted unconstitutionally when it weakened a petition that would raise the state’s minimum wage immediately before it became law. The ruling has allowed the originally intended wage raises to take effect.
Opponents to the changes argue the changes will lead to layoffs, high cost of doing business, and higher prices for customers. The Michigan Restaurant and Lodging Association and the Small Business Association of Michigan are lobbying members of the legislature to craft bills minimizing the financial burden of the changes on businesses.
“Impeding the entrepreneurial climate of our great state is bad for workers, consumers and small businesses,” SBAM President and CEO Brian Calley said. “During a time where policymakers are constantly talking about how to grow our population, these types of policies are not productive or fruitful for our future as a state. We urge lawmakers to act swiftly but deliberately to protect small business owners from the fallout of this unfortunate ruling.”
