Beginning Tuesday, Dec. 1, 2015, Michigan workers will see an increase in the minimum wage rate from $8.15 to $8.50. This new change to state law marks the second of a gradual 25 percent increase of the minimum wage resulting in $9.25 per hour by 2018. New online resources are available at www.michigan.gov/wagehour to help workers and employers understand the facts as the new rate takes effect.

On May 27, 2014, the Workforce Opportunity Wage Act, Public Act 138 of 2014 (Act 138) took immediate effect, replacing the Michigan Minimum Wage and Overtime Act (Act 154). Act 138 is enforced by the Wage and Hour Program within the Michigan Occupational Safety and Health Administration (MIOSHA).

Act 138 applies to employers in Michigan that have two or more employees age 16 and older. A copy of Act 138, along with the required poster may be downloaded from the Wage and Hour Program website.

Dates of minimum wage rate increases

The current minimum wage is $8.15. The rate increases as follows:

• Jan. 1, 2016 – $8.50

• Jan. 1, 2017 – $8.90

• Jan. 1, 2018 – $9.25

Youth training wage

Act 138 allows an employer to pay a newly hired employee age 16 to 19 $4.25 per hour for the first 90 days of employment.

85 percent minimum wage

Act 138 also allows an employer in Michigan to pay 85 percent of the minimum wage to employees aged 16 and 17; however, note that the current Federal Minimum Wage rate is $7.25 per hour. Employers that are covered by both State and Federal Minimum Wage law should pay the higher applicable rate. Information on Federal Minimum Wage can be obtained by calling the United States Department of Labor at 866-487-9243.

Tipped employees

Act 138 allows employers to take a tip credit on minimum wage under certain conditions for those employees who customarily and regularly receive tips.

The following conditions apply to taking a tip credit on the state minimum wage rate:

• The employee is in a position which customarily and regularly receives gratuities from a guest, patron, or customer for services rendered to that guest, patron, or customer.

• If the gratuities plus the minimum hourly wage rate do not equal or exceed the minimum hourly wage otherwise established, the employer pays any shortfall to the employee.

• The gratuities are proven gratuities as indicated by the employee’s declaration for Federal Insurance Contribution Act.

• The employee was informed by the employer of the provisions of Act 138.

• If a credit is taken for gratuities received by an employee, then the employment records for each pay period shall contain the credit that was taken along with a written statement of the amount of gratuities received by the employee. The statement shall be signed by the employee and dated before the date the paycheck was received.

Overtime requirements

Employees covered by the overtime provisions of the Workforce Opportunity Wage Act must be paid one and a half times their regular rate of pay for hours worked exceeding 40 hours in a workweek.

For further questions or information, call the Wage and Hour Program toll free at (855) 464-9243 or visit www.michigan.gov/MinimumWageAct.