Government and Human Resources

New minimum wage now in effect

What was $7.40 an hour is now $8.15 in Michigan.

August 29, 2014
| By Pete Daly |
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(As seen on WZZM TV 13) As of Monday, the minimum wage rate in Michigan has gone up from $7.40 to $8.15 an hour.

According to the Michigan Department of Licensing and Regulatory Affairs, this is the first rate increase in six years. 

The change in state law marks the beginning of a gradual 25 percent increase of the minimum wage that will result in $9.25 per hour by 2018.

Passed May 27, it is officially called the Workforce Opportunity Wage Act, Public Act 138 of 2014, and is enforced by the Wage and Hour Program in the Technical Services Division of the Michigan Occupational Safety and Health Administration.

Act 138 applies to employers in Michigan that have two or more employees age 16 and older. 

A copy of Act 138, along with guidelines and the legally required poster notifying employees of the new minimum wage at their place of employment, can be found at michigan.gov/lara. Click on the Employment, Security & Workplace Safety link on the left.

On Jan. 1, the minimum increases from $8.15 to $8.50, and then increases each Jan. 1 through Jan. 1, 2018, when it will become $9.25.

According to Beene Garter in Grand Rapids, effective Sept. 1, tipped employees (such as those working in a restaurant) may be paid 38 percent of the Section 4 Minimum Hourly Wage Rate, which equals $3.10. If the gratuities plus the tipped employee minimum hourly wage do not equal or exceed the regular minimum hourly wage, the employer pays any shortfall to the employee.

By Jan. 1, 2018, the tipped employees’ minimum wage will be $3.52.

A training wage of $4.25 per hour may be paid to employees 16-19 years of age for the first 90 days of their employment, and employees age 16 and 17 may be paid 85 percent of the minimum hourly wage rate.

Claude Titche, a partner at Beene Garter, said he suspects the percentage of employees overall who earn the minimum wage is probably fairly small.

“To be an employer of choice, most of the time you’re going to be paying more than minimum wage,” he said. 

Most minimum wage jobs tend to be in the fast food industry.

“You read about people saying (an increase in minimum wage) is going to affect everything. I think the reason it affects everything is, if the lowest paid people get a raise, then the people who have been there a little bit longer will expect something” more, Titche said.

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