Michigan’s scheduled minimum wage increase not expected to go into effect next month

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LANSING, Mich. – The Michigan Bureau of Employment Relations, Wage and Hour Division announced that the state’s scheduled minimum wage increase is not expected to go into effect on Jan. 1, 2021.

Michigan’s Improved Workforce Opportunity Wage Act of 2018 does not allow scheduled minimum wage increases when the state’s annual unemployment rate for the preceding calendar year is above 8.5 percent.

Michigan’s 2020 annual unemployment rate is determined by the Bureau of Labor Statistics (BLS), U.S. Dept. of Labor. It’s calculated by using both average labor force and unemployment levels for January through December.

READ: The biggest problems people encounter when filing for unemployment

While Michigan’s October unemployment rate continued its downward trend and is 5.5%, the annual average from January through October currently sits at 10.2% and is highly unlikely to dip below the 8.5% threshold when BLS releases the final 2020 unemployment numbers for Michigan.

The Michigan Bureau of Employment Relations, Wage and Hour Division

If the annual unemployment rate does not fall below 8.5 percent, then effective Jan. 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 rates of pay remains $3.67 an hour
  • The training wage of $4.25 an hour for newly hired employees age 16 and 17 for their first 90 days of employment remains unchanged

Per statute, future increases to the minimum wage rate will occur in each calendar year following a calendar year for which the unemployment rate for this state, as determined by the BLS, is less than 8.5%. See MCL 408.934(1) and (2).

Michigan’s minimum wage rate will next increase to $9.87 in the first calendar year following a calendar year for which the annual unemployment rate is less than 8.5%. See MCL 408.934(1)(h).

The Michigan Bureau of Employment Relations, Wage and Hour Division

Michigan has more information on the minimum wage on this website.


About the Author:

Kayla is a Web Producer for ClickOnDetroit. Before she joined the team in 2018 she worked at WILX in Lansing as a digital producer.