On December 11, 2020, the Michigan Bureau of Employment Relations Wage and Hour Division (WHD) announced that it was highly unlikely that the minimum wage increase scheduled for January 1, 2021, would go into effect in Michigan.
The Michigan Improved Workforce Opportunity Wage Act of 2018 (the “Act”) contains scheduled minimum wage increases through 2030. The Act also provides however, “An increase in the minimum hourly wage rate . . . does not take effect if the unemployment rate for this state, as determined by the U.S. Bureau of Labor Statistics is 8.5% or greater for the calendar year preceding the calendar year of the prescribed increase.” See MCL 408.934(2).
The unemployment rate in Michigan for January through October is currently 10.2% and according to the WHD, this rate is “highly unlikely to dip below the 8.5% threshold when BLS releases the final 2020 unemployment numbers for Michigan.”
If the WHD is right and the unemployment rate does not fall below 8.5% for 2020, then effective January 1, 2021:
- Michigan’s minimum wage will remain at $9.65 an hour.
- The 85% rate for minors age 16 and 17 remains $8.20 an hour.
- Tipped employees rate of pay remains $3.67 an hour.
- The training wage for newly hired employees age 16 and 17 for their first 90 days of employment remains unchanged at $4.25 an hour.
Under the Act, the next scheduled increase to $9.87 per hour will not take place until the first calendar year following a calendar year for which Michigan’s annual unemployment rate is less than 8.5%. See MCL 408.934(1)(h).
For questions about this announcement or other employment-related matters, please contact Allyson Terpsma, Steve Palazzolo or your Warner labor and employment attorney.