The Michigan Supreme Court recently issued a clarification of its July 31, 2024 ruling on minimum wage and paid sick leave standards. This update, released on September 18, 2024, comes in response to a request from the State of Michigan and its attorney general, addressing several key points of confusion that arose from the original decision.
Revised Minimum Wage Schedule and Tipped Worker Phase-In
The Court has provided a clearer roadmap for the implementation of new minimum wage standards:
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- Starting February 21, 2025, the minimum hourly wage will be $10.00 plus an inflation adjustment from the state treasurer.
- For tipped workers, the minimum wage will progressively increase as a percentage of the general minimum wage:
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- February 21, 2025: 48% of the general minimum wage.
- Subsequent years will see gradual increases.
- By February 21, 2030: Tipped employees must be paid 100% of the general minimum wage.
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Clarification on Implementation Dates
The Court confirmed that all future rate increases will occur on February 21 for 2025 and subsequent years, concluding in 2030. The attorney general had proposed implementation dates of January 1 for the years in question.
This clarification is crucial for employers planning their payroll adjustments and ensures consistency in the implementation of the new wage standards.
Inflation Adjustment Calculation
The Court provided important details about the inflation adjustment that will be applied to the minimum wage:
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- The inflationary period to consider is January 1, 2019, through July 31, 2024 for calculation of increases.
- The state treasurer has until November 1, 2024, to complete this assessment.
- This calculation will determine the precise minimum wage that will take effect on February 21, 2025.
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Next Steps for Employers
Given these clarifications, Michigan employers should:
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- Begin preparing for the first wage adjustment on February 21, 2025.
- Pay close attention to the state treasurer’s announcement of the inflation-adjusted minimum wage, expected by November 1, 2024. We will keep you posted.
- Review and update payroll systems to accommodate the new February 21st annual adjustment date.
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Employers should remain vigilant for any further updates or guidance from state authorities. The complex nature of these changes underscores the importance of staying informed and seeking experienced legal counsel to ensure full compliance with Michigan’s evolving wage laws. You can view the order here.
This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.
Fraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.