Working after hours, Michigan Governor Rick Sndyer signed legislation on the evening of May 27, 2014 hiking the state's minimum wage to $9.25 an hour by 2018. Michigan's current minimum wage of $7.40 an hour is already above the current federal minimum wage of $7.25 an hour.
The Michigan minimum wage will increase over the next four years as follows:
- Beginning September 1, 2014, $8.15
- Beginning January 1, 2016, $8.50
-Beginning January 1, 2017, $8.90
-Beginning January 1, 2018, $9.25
The new law also raises the wage for tipped workers to 38% of the minimum wage. In addition, after 2018 the law ties the state's minimum wage to the rate of inflation, capped at 3.5% per year.
In this election year, raising the minimum wage has become a hot political topic. At the federal level, President Obama has supported an increase in the federal minimum wage to $10,10 an hour. Facing resistance at the federal level, a number of states, Connecticut, Delaware, Hawaii, Maryland, Minnesota and West Virginia, have raised their minimum wages. The Michigan law, the first increase this year in a Republican-led state, came the day before a deadline to submit signatures for a state ballot proposal that would allow voters to raise the minimum wage to $10.10 per hour by 2017 and index wage increases to inflation.
Under the Fair Labor Standards Act, where the state minimum wage is higher than federal the federal minimum wage, the applicable state minimum wage rate prevails. That means that the higher state minimum wage is applicable to employers in Michigan even if the employer is otherwise covered by the federal Fair Labor Standards Act.
A number of Michigan business associations have said a wage increase will cut into business profits and likely resulting in closures and layoffs. Governor Snyder's position is that the measure is "economically sound."