Michigan Supreme Court Ruling Mandates Minimum Wage to Exceed $12 by 2025

Michigan Minimum Wage Set to Surpass $12 an Hour by 2025

A Landmark Ruling by the Michigan Supreme Court

Major reforms are on the horizon for Michigan’s working class as a substantial Supreme Court ruling paves the way for significant hikes to the state’s minimum wage and tipped minimum wage in 2025. According to the mandate, the state treasurer is directed to ascertain a new hourly minimum wage, set to take effect from Feb. 21, 2025, incorporating inflation adjustment from 2018 to 2024. At present, the standard hourly minimum wage in Michigan is $10.33, with the tipped minimum wage currently 38% of the standard, translating to $3.93 per hour.

Predicted Changes in the Offing

After the Supreme Court ruling, it is expected that the minimum wage will rise to $10 plus an inflation adjustment in 2025, further rising to $10.65 in 2026 and $11.35 in 2027, eventually reaching $12 in 2028, alongside similar increments for the tipped minimum wage, set to increase to 48%, 60%, 70%, and 90% in the respective years. From 2029, the tipped minimum credit is set to be abolished completely.

The Fallout of the Rising Tipped Minimum Wage

The gradual increase and subsequent elimination of the tipped minimum wage might have extensive implications for both employees and employers in Michigan’s industries. The restaurant and hospitality sectors appear to be particularly concerned about the potential rise in operational expenses due to increased wage costs. It is worth mentioning that currently seven states, including Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington, and Washington D.C, do not implement a tipped minimum wage.

The Journey to the Supreme Court

The issue of minimum wage reform in Michigan traveled to the state’s high court due to a controversial decision in 2018 by the state Legislature when it adopted and subsequently amended a pair of ballot initiatives within the same legislative session. These initiatives aimed to propel the state’s minimum wage to $12 an hour by 2022 and subsequently abolish the tipped minimum wage. However, the Legislature, rather than implementing these changes immediately, chose to delay the $12 per hour increase till 2030, also maintaining the tipped minimum wage at 38% of the general minimum wage. The Supreme Court’s new ruling restores the initial intent of the petition initiatives, directing a wage scale that accounts for inflation between 2018 and 2024.