Article Summary –
Michigan’s minimum wage will increase to $13.73 by January 1, 2026, with tipped workers earning $5.49 per hour due to amendments in the Improved Workforce Opportunity Wage Act signed by Governor Gretchen Whitmer. This legislative change follows a Michigan Supreme Court decision that restored the original intent of voter-approved 2018 ballot initiatives, which Republicans had previously altered, and mandates paid sick leave. The wage increase has sparked debate, with supporters like Sen. Kevin Hertel arguing it boosts the economy and critics, including small business owners, concerned about increased costs and potential business closures.
Michigan workers earning minimum wage will see their pay rise from $12.48 to $13.73 on Jan. 1, 2026.
Tipped workers’ pay will increase to $5.49 per hour, 40% of the minimum wage, while minors’ 85% rate will jump from $10.60 to $11.67 per hour.
This wage hike stems from legislation signed by Democratic Gov. Gretchen Whitmer to amend the Improved Workforce Opportunity Wage Act, setting annual minimum wage rates in Michigan. The changes follow a 2024 Michigan Supreme Court decision restoring provisions of two ballot initiatives — one to raise the state’s minimum wage and another mandating paid sick leave — which were previously altered by Republican lawmakers in 2018.
The court ruling left restaurant owners scrambling for compliance, raising concerns among tipped workers. Lawmakers worked to clarify the law’s implementation, offering guidance to businesses.
Sen. Kevin Hertel, who sponsored the minimum wage bill, stated in a Dec. 8 statement that the increases help workers amid rising costs.
“Higher wages benefit workers, businesses, and the economy,” Hertel said. “That’s why I pushed for accelerating Michigan’s minimum wage — more money means families can support themselves better and participate in the economy.”
In 2018, Republicans in the Legislature adopted minimum wage and paid sick leave initiatives to keep them off the ballot, later amending them to weaken key provisions post-election.
“Adopting and then weakening these acts in the same session unconstitutionally violated the people’s initiative rights,” Justice Elizabeth Welch wrote in the majority opinion. “Thus, the Amended Wage Act and Earned Sick Time Act are unconstitutional.”
The court reinstated the original intent of the measures, effectively increasing the state’s minimum wage and implementing new paid sick leave starting Feb. 21, 2025.
The previous law faced criticism from small business owners, according to a Senate Fiscal Agency analysis, saying higher wages could lead to increased costs, staff reductions, and potential closures. Some service workers preferred tipped wages, allowing them to potentially earn more with tips.
The Republican-led Michigan House of Representatives and Democratic-controlled Senate proposed competing wage bills. While the Republican version only passed the House, the Democratic bill passed both chambers with bipartisan support.
Under the 2018 proposal, the minimum wage was set to reach $15 by 2028 and increase with inflation, with tipped wages matching non-tipped by 2029. Now, the minimum wage increase to $15 is set for 2027, and tipped wages will rise by 2% annually until reaching 50% by 2031.
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