After a Year On Hold, Michigan’s Minimum Wage Set to Rise in 2022
Since it arrived in March 2020, the COVID-19 pandemic has put a lot of plans on hold. This includes an increase in Michigan’s minimum wage that was scheduled to go into effect on January 1, 2021. While the pandemic very much remains an issue, the improvement in the state’s economy over the past year means that countless Michigan workers will see their wages rise in 2022 when the state’s minimum wage finally goes up.
Starting January 1, 2022, Michigan’s minimum wage will increase from its present rate of $9.65/hr. to $9.87/hr. Tipped workers will see their minimum wage go up from $3.67/hr. to $3.75/hr.
What Delayed the Increase?
Annual increases in the state’s minimum wage effective on January 1 of each year were part of the Improved Workforce Opportunity Wage Act of 2018. Under that legislation, Michigan’s minimum wage was scheduled to increase at the start of this year. However, that law contained a “failsafe” provision that prohibits planned minimum wage increases from going into effect when the state’s annual unemployment rate for the previous calendar year is above 8.5 percent. Almost exclusively due to the pandemic, Michigan’s 2020 annual average unemployment rate was 9.9 percent, leading the state’s Wage & Hour Division to put the scheduled 2021 increase on ice.
But on December 2, 2021, the division announced that the increase will go into effect next year because “the annual average unemployment rate for 2021 is expected to remain well below 8.5 percent.”
In addition to the increase in the regular minimum wage and that for tipped workers, the 85 percent rate for minors aged 16 and 17 will rise to $8.39 an hour. However, the training wage of $4.25/hr. for newly hired employees ages 16 to 19 for their first 90 days of employment remains unchanged.
Minimum Wage Questions? Call Kreis Enderle Today for Answers
If you have questions regarding Michigan’s new minimum wage, please contact the Business Law and Employment Law Practice Groups at Kreis Enderle today.