BHT&D Certified Public Accountants Blog

How Has Michigan's Tipped Employee Minimum Hourly Wage Changed?

Posted by Beth Thomas on Mon, Jan 25, 2016 @ 08:00 AM

31707238-resized-600.jpgMichigan’s minimum wage increased on January 1, 2016 to $8.50 per hour for workers 18 years or older, and to $3.23 per hour for tipped employees.  This increase is part of Public Act 138, the Workforce Opportunity Wage Act, passed May 27, 2014, which gradually increases Michigan’s minimum wage to $9.25 per hour in 2018.

The table below outlines the requirements for 2016 through 2018:

  Effective Date:

Minimum Hourly Wage Rate

Tipped Employee Hourly Wage 85% Minimum Hourly Wage*
  January 1, 2016 $8.50 $3.23 $7.25
  January 1, 2017 $8.90 $3.38 $7.57
  January 1, 2018 $9.25 $3.52 $7.86


Tipped employees may be paid 38% of the minimum hourly wage rate as long as their wage plus gratuities meets or exceeds the minimum hourly rate.  If it does not, the employer must pay the shortfall to the employee.

Workers 16-17 years of age may be paid 85% of the minimum hourly wage rate, but not less than the federal minimum wage, which currently stands at $7.25/hour.*

January 2019 and annually thereafter, the state treasurer will determine the minimum wage adjustment based on inflation, but will not exceed 3.5%.   These rates will be posted February 1 on the LARA website and would take effect on April 1 of each year.   There will be no adjustment if Michigan’s unemployment rate was 8.5% or more in the previous year.

By:  Beth Thomas

If you have questions about this might affect your pay practices, please feel free to contact one of our CPAs at (616) 642-9467 or request a complimentary accounting consultation.


Tags: Michigan Minimum Wage, Minimum Wage, Small Business