Michigan Minimum Wage: Rates, Tip Credit, and Increases

A Michigan restaurant owner wrote to me after one of her servers filed a wage complaint. She had entered a tipped cash wage into her payroll software when she opened, checked the box that said it was correct, and never looked at it again. Michigan had moved that number twice in the meantime. The back pay was small. The investigation and the liquidated damages were not, and every dollar of it was avoidable.

That is the real problem with a state minimum wage. The number itself is easy. Keeping it current is what costs employers money, because Michigan’s wage floor is now scheduled to change on January 1 of every year, and the tipped percentage is climbing on the same schedule.

This page covers one state and one subject: the current rate, the increases already scheduled, the tipped cash wage, the youth and training rates, the poster and what to do each January. Every figure is attributed to an official source, mostly the Michigan Department of Labor and Economic Opportunity or the statute itself.

For the wider picture (sick leave, discrimination, local income tax withholding, termination), read the Michigan compliance guide instead.

The Current Michigan Rate

Michigan’s minimum wage is $15.00 per hour from January 1, 2027 ($13.73 through December 31, 2026). The $13.73 rate took effect on January 1, 2026, replacing $12.48, which applied from February 21, 2025. All three figures come from the Improved Workforce Opportunity Wage Act, Public Act 337 of 2018, as amended by Public Act 1 of 2025.

The act reaches employers with two or more employees who are 16 years of age or older, which takes in essentially every small business operating in the state. Above that threshold, coverage does not scale with headcount: a small bakery and a large regional distributor owe the same hourly floor.

The department publishes the full Michigan minimum wage table, including the tipped and minor rates, in its minimum wage and overtime FAQ. It set out the 2026 figures in an announcement dated December 8, 2025. As the table below shows, two companion rates move with the standard wage, and one does not.

Back pay is calculated against the rate in force on the date the hours were worked, so an audit of an old pay period needs that rate, not this one. The department’s own rate announcements put Michigan at $10.10 through 2023, $10.33 from January 1, 2024 (with a $3.93 tipped cash wage) and $12.48 from February 21, 2025.

The Next Scheduled Increase

The next increase is January 1, 2027, when the rate becomes $15.00 per hour. That $1.27 step is the last one with a dollar amount fixed in the statute, in section 4(1), so it takes effect on its own, with no agency decision needed. The unemployment brake described below does not apply to it.

The schedule and the tipped percentages both come from Public Act 1 of 2025, signed February 21, 2025. That law rewrote the wage schedule after July 31, 2024, when the Michigan Supreme Court revived the original initiated act (the version that began as a citizen petition) in Mothering Justice v. Attorney General.

The history matters in one way for an employer: any Michigan rate table saved before February 2025 is wrong.

From January 1, 2028 the dollar figure stops being fixed in law. Each year the state treasurer adjusts the rate by the twelve month percentage increase in the consumer price index for the Midwest region and publishes the adjusted rate by November 1 of the year it is calculated. So you learn the exact number the November before each increase.

Section 4(3) of the act adds one brake, and it applies only to those inflation increases under section 4(2). Such an increase does not take effect if Michigan’s unemployment rate, as determined by the Bureau of Labor Statistics, was 8.5 percent or higher for the year immediately preceding the year of the increase. The fixed dollar steps in section 4(1), including $15.00 on January 1, 2027, are not subject to it.

The department has already published the cash figures that pair with the 2027 rate. Its required poster, form WHD 9904 (revised February 2025), lists a $6.30 tipped cash wage from January 1, 2027, which is 42 percent of $15.00 and leaves an $8.70 tip credit.

The same poster lists $12.75 for minors under 18. Use those figures, not your own rounding, when you reprogram payroll.

Tipped Employees and the Tip Credit

Michigan allows a tip credit, which means you can count part of a tipped employee’s tips toward the minimum wage. The cash wage for a tipped employee is $6.30 per hour from January 1, 2027, which is 42 percent of the $15.00 minimum, and the maximum tip credit is the remaining $8.70 per hour. Through December 31, 2026 the figures are $5.49 (40 percent of $13.73) and an $8.24 tip credit.

Section 4d of the act sets the conditions for using it. The employee has to receive gratuities from guests, patrons or customers and report them as tips for federal payroll tax purposes. You have to explain the tip provisions in writing at or before hire, and the employee has to give written consent.

In a Michigan restaurant, the people who meet those conditions are usually servers, other waitstaff and bartenders, the staff who take gratuities directly from the guest. A line cook or a dishwasher who never receives tips is owed the full minimum wage in cash: $15.00 from January 1, 2027 ($13.73 through December 31, 2026). The job title does not settle it. Whether the person actually receives and reports tips does.

The tips also have to cover the gap to the full rate. If the cash wage plus actual tips does not reach the full minimum wage for the hours worked, you make up the difference in that pay period. The tip credit is permission to count tips toward the floor, not permission to fall below it.

Unlike the federal structure, which fixes the tipped cash wage at a dollar amount, Michigan sets it as a percentage of the full rate. That percentage rises two points a year from 2027 through 2031, so a tipped payroll setup needs revisiting every January even in a year when the base rate barely moves.

Tip pooling is a separate question, and the wage act covers it too. Tips stay with the employee who receives them. That employee may voluntarily share them with another employee in the chain of service (someone who helps serve the guest) whose duties are not primarily managerial or supervisory. Federal rules on tip pools still apply alongside the state rule.

City and County Rates in Michigan

No Michigan city or county has its own minimum wage, and none can adopt one. The Local Government Labor Regulatory Limitation Act, Public Act 105 of 2015, prohibits a local government from requiring an employer to pay a wage higher than the state rate. Michigan is a single rate state, and that is the entire local picture.

What does vary between Michigan cities is income tax withholding. Twenty-four cities levy a local income tax, according to the Michigan Department of Treasury, and require separate employer registration where employees live or work. That changes what you withhold from a paycheck, never what you owe per hour.

Industry Carve-Outs and Exemptions

Michigan has no industry-specific minimum wage. There is no fast food wage council, no separate healthcare floor, no hospitality rate and no large employer rate. A quick service restaurant, a home care agency and a machine shop all owe the same state rate: $15.00 from January 1, 2027 ($13.73 through December 31, 2026). If you have moved here from a state with industry wage boards, that is the difference to remember.

The exceptions that do exist turn on who the act covers, not on the industry. Three matter for a small employer.

Fast food is the carve-out employers ask about most, usually after reading about other states’ rules. Michigan has nothing equivalent.

Youth Rate and Training Wage

Michigan has both. Employees under 18 may be paid 85 percent of the minimum wage, which is $12.75 per hour from January 1, 2027 ($11.67 through December 31, 2026). Before January 1, 2026 the minor rate was $10.61.

Section 4b of the act separately allows a training wage of $4.25 per hour for a newly hired employee under the age of 20 during their first 90 calendar days of employment. Because the act only counts employees aged 16 and older, that band runs from 16 through 19.

A 16-year-old sits inside both rules at once. The minor rate puts the floor at $12.75 an hour from January 1, 2027 ($11.67 through December 31, 2026), but a newly hired 16-year-old can instead start on the $4.25 training wage, which covers new hires aged 16 through 19 for their first 90 calendar days. When those 90 days run out, the minor rate governs until the employee turns 18.

The training wage does not track the minimum wage. It has sat at $4.25 through several increases and did not move in the most recent one. Overtime for an employee on the training wage is time and a half of $4.25, which is $6.38 per hour.

Two practical limits apply. The 90 days are calendar days from hire, not days worked, so the clock runs through slow months and expires on schedule. And you cannot use the training wage to displace an existing employee, cut their hours or replace them with a cheaper new hire.

Hour and permit rules for minors sit in a separate statute, the Youth Employment Standards Act, and are covered in the Michigan hiring walkthrough.

The Poster Requirement

Section 7 of the Improved Workforce Opportunity Wage Act requires every covered employer to keep a minimum wage notice posted in a conspicuous place at the workplace. The Wage and Hour Division publishes form WHD 9904 for this purpose, and an employer who posts it is treated as meeting the requirement.

The poster is free. Download and print it from the department posting requirements page, or call the division and ask for a copy to be mailed.

An outdated edition is what trips employers up. The current WHD 9904, revised February 2025, already prints the full schedule through the January 1, 2027 increase, so it stays valid for that change. Once the treasurer publishes the first inflation-adjusted rate for 2028, check for a new edition.

Michigan requires several other workplace postings alongside this one, including sick leave, safety, discrimination and unemployment notices, and one of them has to be posted in Spanish as well as English.

How Michigan Relates to the Federal Rate

The federal minimum wage is $7.25 per hour and has not moved since July 2009. Michigan’s rate sits $7.75 above it from January 1, 2027, when it reaches $15.00 ($6.48 above at the $13.73 rate through December 31, 2026), so the state rate is what you pay.

Section 10 of the state act reaches the same result from the other direction: the act yields to the federal wage provisions unless those provisions would produce a lower wage than Michigan law, and right now they always do. That relationship is stable for the foreseeable future, because Michigan is scheduled to reach $15.00 while the federal floor stays put.

What to Do When the Rate Rises

Before the first pay period that touches the new rate, recalculate pay, tell affected employees, check the poster and keep the records. Plan on doing it every January for as long as you employ anyone in Michigan.

One more reason to get the arithmetic right: an employee affected by a violation may bring a civil action, meaning sue you in court, for the difference between what was paid and what was owed, plus an equal additional amount as liquidated damages, together with costs and reasonable attorney fees.

In plain terms, an underpayment can cost you double the shortfall plus the employee’s legal costs. A rate that is eleven cents low across a year of shifts stops being a rounding error very quickly. Running the checklist above every January is how you keep a small miss from getting that far.

Frequently Asked Questions