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Employers, Take Note (Part 1): Michigan Minimum Wage Increases

Brandon Grysko, Esq.

A new Michigan law, the Improved Workforce Opportunity Wage Act, raises the minimum wage and also changes other aspects of the employment relationship. Although the changes may be significant for certain businesses, there's still time to plan, since the law doesn't take effect until around March 2019.

The minimum wage will increase to $10 per hour in 2019. It then steadily increases each year until reaching $12 per hour in 2022. Traditionally, employees that earn tips-like waiters and waitresses-received a lower minimum wage than other employees. Right now, the tipped-employee minimum wage is $3.52 per hour. The new law, however, gradually phases out the tipped-employee minimum wage. By the year 2024, tipped employees will be entitled to the same wage as everyone else.

The Act also establishes rules for a variety of other areas, like payment of compensatory time in lieu of overtime, pay rates for employees in training and apprenticeships, and penalties for employer violations.

Remember, it isn't enough just to read the law. The Act also creates a commission to set administrative rules that employers must also comply with. To avoid possible penalties, make sure HR and management are up to speed on these changes.

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