Michigan’s Minimum Wage to Increase January 1, 2023, More Changes May Take Effect in February

On January 1, 2023, Michigan’s minimum wage rate will increase from $9.87 to $10.10 per hour as set by Michigan’s Improved Workforce Opportunity Wage Act of 2018 establishing the annual schedule of increases.

Effective January 1, 2023:

• The minimum hourly wage will increase to $10.10 per hour.
• The 85% rate for minors aged 16 and 17 will increase to $8.59 per hour.
• The tipped employee rate of hourly pay increases to $3.84 per hour.
• The training wage of $4.25 per hour for newly hired employees ages 16 to 19 for their first 90 days of employment remains unchanged.

There is pending litigation that might affect this minimum wage increase:

• Due to a recent ruling by the Michigan Court of Claims, $12/hour minimum wage and mandatory paid sick time may become effective in the state as soon as February 2023.
• At issue are two initiatives that would have been included on the November ballot in 2018, but instead were adopted and amended by the state legislature.
• The constitutionality of the “adopt and amend” strategy was challenged in court, and the Michigan Court of Claims ruled that the actions by the legislature to amend the initiatives were unconstitutional. The decision by the Court of Claims was appealed, and a panel of the Court of Appeals heard arguments yesterday on the issue – the decision from the Court of Appeals will determine what will be in effect in February 2023.

You may find further details below as well as on the Michigan Department of Labor and Economic Opportunity Wage and Hour webpage.

Minimum Wage

The 2018 initiative would have increased minimum wage to $12/hour by 2022, and would increase with inflation each year thereafter. You may view details on the minimum wage in 2023 on the LEO website, linked above.

In 2018, the legislature amended this initiative so that minimum wage would increase to $12 by 2030, rather than 2022 and does not include any inflationary adjustments. This is the current law, but was ruled invalid by the Michigan Court of Claims, pending appeal. You may view the legislation by clicking HERE.

Paid Sick Time

The 2018 initiative would have required employers to provide one hour of paid sick time to an employee for every 30 hours worked. Employees of small businesses (those with less than 10 employees) would be able to earn up to 40 hours of paid sick time and 32 hours of unpaid sick leave each year. Businesses with more than 10 employees would have to provide up to 72 hours of paid sick time. If the appeal of the Michigan Court of Claims decision is unsuccessful, this will be the law effective February of 2023.

The current law differs from the original proposal, as the legislature amended this initiative in 2018 so that it applies only to businesses with more than 50 employees, and caps the accrued amount of paid sick time to 40 hours annually. You may view the public act and find summary documents, by clicking HERE.