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Why Michigan Increased Minimum Wage

Most business owners already know that Michigan’s minimum wage increased on Jan. 1 for the second year in a row. The increase, to $9.65 an hour, affects businesses of all sizes in an attempt to promise a better living wage for restaurant and other workers. Read on for more information on why Michigan increased minimum wage.

Why Michigan increased minimum wage

Michigan’s Legislation approved the Improved Workforce Opportunity Act in 2018. Under the act the minimum hourly wage requirements gradually increase up to $12 an hour by 2022. The law mandates the following wage increases:

Jan. 1, 2020 - $9.65 an hour

Jan. 1, 2021 – $9.87 an hour

The minimum wage will gradually increase to 12.05 per hour until 2030.

Wage increases for tipped workers

Wages to employees who receive tips may also increase as employers will be obligated to pay a minimum of 38% of the minimum wage and any shortfall if the tipped employee fails to make minimum wage after the inclusion of said employee’s tips.

Failure of an employer to follow the Improved Workforce Opportunity Act can subject the employer to costs, fines, and attorney fees far in excess of the unpaid wage.

Mandatory Paid Sick Leave

Michigan’s Paid Medical Leave Act requires that certain employers offer paid medical leave to specific employees. The law applies to workplaces with 50 or more employees, which includes full-time and some part-time employees.

According to the Act, an employee accrues one hour of paid sick time for every 35 hours worked up to 40 hours per year. There is a rebuttable presumption that an employer is in compliance with this act if the employer provides at least 40 hours of paid leave to an eligible employee each benefit year. Further, an employer is not required to allow an eligible employee to use more than 40 hours of paid family medical leave in a single benefit year. Paid medical leave time begins to accrue for new employees as of the date of hire; however, the employer may require the employee to wait until the ninetieth calendar day after commencing employment before using paid medical leave.

Who is exempt?

The law applies to employers who employ 50 or more employees. Also, the following employees are exempt:

  • Individuals exempt from overtime requirements under the Fair Labors Standards Act
  • Private sector employees covered by a collective bargaining agreement
  • Temporary workers
  • Employees who work for the federal government or another state or political subdivision of another state
  • Employees whose primary work location is not in this state
  • Independent contractors
  • Variable hour employees
  • Certain part-time workers who work less than 25 hours per week during the preceding calendar year
  • Seasonal employees who work less than 25 weeks during the prior calendar year for a job scheduled for 25 weeks or fewer
  • Flight deck, cabin crew, and railroad workers.

An employer that fails to provide paid medical leave in violation of this Act, is subject to damages and fines.

The business attorneys at O’Reilly Rancilio are ready to answer your questions regarding employment law and wage and hour issues. Visit our website or call 586-726-1000 for more information.

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