The minimum wage will experience an increase as Governor Rick Snyder signed Public Act 138 of 2014 on Tuesday, effectively raising Michigan’s minimum wage by 25 percent over the next four years. The bill will raise the hourly minimum wage to $9.25 by 2018. The legislature passed the bill and Governor Snyder signed it into law just one day before a group of labor and community organizers planned to present thousands of signed petitions calling for a Michigan ballot initiative to raise the minimum wage to $10.10 by 2017.
As it stands, Public Act 138 provides for a gradual increase of the hourly minimum wage over a period of four years. The current minimum wage of $7.40 will be increased according to the following schedule:
- 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 law will also tie the minimum wage to the rate of inflation after 2019, requiring annual increases up to 3.5%. In addition, the minimum wage for tipped employees will increase to 38% of the minimum hourly rate under the new law. However, the legislation does not provide tipped and restaurant workers with the standard minimum wage, as sought by the ballot measure and labor organizers. The 38% increase will bring the minimum wage for tipped employees from $2.65 to $3.10, beginning September 1, 2014.
Michigan joins several other states that have approved minimum wage increases this year. Vermont and Maryland legislatures approved bills raising the minimum wage to $10.50 and $10.10, respectively, by 2018. Lawmakers in Minnesota, Delaware, West Virginia and Connecticut have also approved similar minimum wage raises between $8.25 and $10.10 this year.