Michigan Supreme Court upholds minimum wage increase, will affect tipped workers

On July 31, 2024, the Michigan Supreme Court issued a ruling that upheld the state’s minimum wage law, which is significant because it affirmed the increases to the minimum wage that had been set by previous legislative and ballot initiative efforts.

The ruling confirmed that the planned increases to Michigan’s minimum wage will proceed as scheduled, and would apply to tipped workers, like restaurant servers and bartenders, as well.  This effectively mandates that tipped employees are guaranteed a base wage that rises in line with the overall minimum wage increases, which is designed to help bridge the wage gap between tipped and non-tipped workers.

The changes to Michigan’s hourly minimum wage will start Feb. 21, 2025, according to this schedule:

  • $10 plus an inflation adjustment on Feb. 21, 2025 (tipped employees must be paid at least 48% of minimum wage)
  • $10.65 plus an inflation adjustment on Feb. 21, 2026 (tipped employees must be paid at least 60% of minimum wage)
  • $11.35 plus an inflation adjustment on Feb. 21, 2027 (tipped employees must be paid at least 70% of minimum wage)
  • $12 plus an inflation adjustment on Feb. 21, 2028 (tipped employees must be paid at least 100% of minimum wage)

The ruling indicates the final inflation-adjusted wage rates will be calculated by the state treasurer.

For information on how your business might be affected, contact a ShindelRock tax professional.