Minimum wage employees in Michigan getting fourth scheduled pay raise

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LANSING (WJRT) (12/1/2017) - Workers making minimum wage in Michigan will be getting the last of four scheduled pay raises in one month.

On Jan. 1, the minimum hourly wage for most workers increases to $9.25 an hour. The pay hike is part of the Workforce Opportunity Wage Act signed into law in 2014.

From May 2014 to Jan. 1, 2018, the minimum wage will have increased from $7.40 an hour to $9.25 an hour.

Future minimum wage hikes in Michigan will be set by the state treasurer based on the state's unemployment rate and increases in the Consumer Price Index. Raises cannot exceed 3.5 percent annually.

Exceptions to the minimum wage include:

Training Wage -- The training wage remains at $4.25 an hour for newly hired employees aged 16 to 19 for the first 90 days of employment.

Tipped Employees -- Employers can take a tip credit on the state minimum wage rate under certain conditions for employees who customarily and regularly receive tips. Employees who are tipped may be paid 38 percent of Michigan’s minimum wage.

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

• The employee must be in a position that 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 that is otherwise established, the employer must pay any shortfall to the employee.

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

• The employee has been 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 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 prior to the date on which the paycheck was received.

Overtime Requirements -- Employees covered by overtime provisions must be paid one and a half times their regular rate of pay for hours worked exceeding 40 hours in a work week.

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