On this pageWhat is the state minimum wage, and how does it relate to the federal floor?
State Law Practice Guide

Wage and Hour Law in Michigan

A question-by-question summary of Michigan wage and hour law, covering the Improved Workforce Opportunity Wage Act minimum wage of $13.73 that rises to $15.00 on January 1, 2027 and is CPI-indexed after that, the weekly-only overtime rule, the absence of any adult meal-or-rest-break mandate, the Payment of Wages and Fringe Benefits Act rules on next-payday final pay backed by an administrative 10% annual penalty rather than an automatic waiting-time penalty, semi-monthly paydays and itemized pay statements, the economic-reality test for worker classification, and a tipped cash wage that rises from 40% of the minimum wage in 2026 to 50% by 2031, which 2025 PA 1 preserved but narrowed rather than eliminating the partial tip credit.

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Michigan regulates wages through two main statutes. The Improved Workforce Opportunity Wage Act sets the minimum wage, the overtime rule, and the tipped-employee cash wage; the Payment of Wages and Fringe Benefits Act governs how often and how quickly workers must be paid, what a pay statement must show, when final wages are due on separation, and how a shortfall is enforced. What the state does not add, it leaves to the federal Fair Labor Standards Act — there is no daily-overtime tier and no general adult meal-or-rest-break mandate. The current schedule is itself the product of litigation: after Mothering Justice v. Attorney General (Mich. July 31, 2024) struck down the Legislature's 2018 adopt-and-amend of two voter initiatives, the Legislature enacted 2025 PA 1 to set a smoothed rate schedule and to preserve — rather than phase out — the tip credit. This note walks through each rule an in-house team has to get right for a Michigan workforce. For the cross-state framework, see the wage and hour practice guide.

What is the minimum wage?

Michigan has a single statewide minimum wage that sits well above the federal floor of $7.25 per hour. Under the Improved Workforce Opportunity Wage Act the rate is $13.73 per hour beginning January 1, 2026, and it climbs to $15.00 on January 1, 2027 . After that the wage does not freeze: beginning in October 2027 the state treasurer recalculates the rate each year and raises it by the rate of inflation, so the floor moves with the Midwest CPI rather than by a fresh vote . One built-in brake applies — a scheduled indexed increase does not take effect if the state's unemployment rate was 8.5% or higher for the preceding year . And there is no higher local minimum wage to check: a Michigan local government may not require an employer to pay more than the state (or applicable federal) rate .

The dollar schedule is fixed by statute through 2027. Section 4 lists the steps, from the February 2025 reset rate up to the $15.00 top.

Subject to the exceptions specified in this act, the minimum hourly wage rate is: (a) Beginning February 21, 2025, $12.48. (b) Beginning January 1, 2026, $13.73. (c) Beginning January 1, 2027, $15.00.

Once the scheduled climb tops out at $15.00, the rate is indexed. The treasurer publishes an adjusted figure each fall, effective the following January 1.

Every October beginning in October, 2027, the state treasurer shall calculate an adjusted minimum wage rate. The adjustment must increase the minimum wage by the rate of inflation.

The indexing is conditional. A prescribed increase is suspended for any year that follows a year of high statewide unemployment.

An increase in the minimum hourly wage rate as prescribed in subsection (2) does not take effect if the unemployment rate, as determined by the Bureau of Labor Statistics of the United States Department of Labor, for this state is 8.5% or greater for the year immediately preceding the year of the prescribed increase.

Because the state also preempts local wage floors, an employer sets one rate for the whole state rather than tracking city or county ordinances.

A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution requiring an employer to pay to an employee a wage higher than the state minimum hourly wage rate determined under section 4 of the workforce opportunity wage act, 2014 PA 138, MCL 408.414, or, if applicable to the employer, the minimum wage provisions of the fair labor standards act of 1938, 29 USC 201 to 219, unless those federal minimum wage provisions would result in a lower minimum hourly wage than provided under state law.

Sources for this answer

Primary source · Primary law · 2025-02-21

A.1 MCL § 408.934

Section 4 of the Improved Workforce Opportunity Wage Act sets the Michigan minimum wage at $13.73 per hour beginning January 1, 2026 and $15.00 per hour beginning January 1, 2027.

Subject to the exceptions specified in this act, the minimum hourly wage rate is: (a) Beginning February 21, 2025, $12.48. (b) Beginning January 1, 2026, $13.73. (c) Beginning January 1, 2027, $15.00.

See MCL § 408.934(1).

Primary source · Primary law · 2025-02-21

A.2 MCL § 408.934

After the scheduled increases reach $15.00, section 4 indexes the Michigan minimum wage to inflation, directing the state treasurer to calculate an adjusted rate each October beginning in 2027.

Every October beginning in October, 2027, the state treasurer shall calculate an adjusted minimum wage rate. The adjustment must increase the minimum wage by the rate of inflation.

See MCL § 408.934(2).

Primary source · Primary law · 2025-02-21

A.3 MCL § 408.934

A scheduled indexed increase to the Michigan minimum wage is suspended when the state's unemployment rate was 8.5% or higher for the year immediately preceding the increase.

An increase in the minimum hourly wage rate as prescribed in subsection (2) does not take effect if the unemployment rate, as determined by the Bureau of Labor Statistics of the United States Department of Labor, for this state is 8.5% or greater for the year immediately preceding the year of the prescribed increase.

See MCL § 408.934(3).

Primary source · Primary law · 2015-06-30

A.4 MCL § 123.1385

A Michigan local government may not require an employer to pay a wage higher than the state minimum wage (or the applicable federal minimum wage), so there is no higher local minimum wage for private employers.

A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution requiring an employer to pay to an employee a wage higher than the state minimum hourly wage rate determined under section 4 of the workforce opportunity wage act, 2014 PA 138, MCL 408.414, or, if applicable to the employer, the minimum wage provisions of the fair labor standards act of 1938, 29 USC 201 to 219, unless those federal minimum wage provisions would result in a lower minimum hourly wage than provided under state law.

See MCL § 123.1385.

When is overtime owed?

Only on a weekly basis, as a general rule. The Improved Workforce Opportunity Wage Act requires one-and-one-half times the regular rate for hours worked in a workweek over 40, mirroring the federal rule; it sets no general daily-overtime threshold and no double-time tier . A Michigan employee who works long individual days but 40 or fewer hours in the week is not owed state overtime, the opposite of the daily-overtime regime in states like California. The narrow exceptions the act does carry are sector-specific and mostly public-sector: alternative work periods for public fire-protection and law-enforcement personnel, a 14-day work-period option for public hospitals and residential-care institutions that does pick up an over-eight-hours-in-a-day component , and the standard executive, administrative, and professional exemptions — so for the ordinary private workforce the operative rule is the 40-hour week .

The overtime obligation is stated in a single sentence keyed to the workweek, not the workday.

Except as otherwise provided in this act, an employee shall receive compensation at not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours.

The statutory exceptions that follow are narrow and mostly public-sector: they let certain fire, police, and hospital employers use extended work periods before overtime accrues, and they exclude bona fide executive, administrative, and professional employees. None of them creates a daily-overtime right for the general workforce.

Sources for this answer

Primary source · Primary law · 2025-02-21

B.1 MCL § 408.934a

Section 4a(1) requires overtime at 1-1/2 times the regular rate for hours worked in a workweek over 40, with no general daily-overtime threshold — so Michigan follows the federal weekly overtime standard for the ordinary workforce.

Except as otherwise provided in this act, an employee shall receive compensation at not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours.

See MCL § 408.934a(1).

Primary source · Primary law · 2025-02-21

B.2 MCL § 408.934a

Section 4a(3) gives public hospitals and residential-care institutions a 14-day work-period option under which overtime is owed for hours over 8 in a workday and over 80 in the 14-day period — a narrow public-sector exception, not a general daily-overtime rule.

For the employee's employment in excess of 8 hours in a workday and in excess of 80 hours in the 14-day period, the employee receives compensation at a rate of 1-1/2 times the regular rate, which shall be not less than the statutory minimum hourly rate at which the employee is employed.

See MCL § 408.934a(3)(b).

Are breaks required?

No — not for adults. Michigan has no statute requiring meal or rest breaks for adult private-sector employees; break policy is left to the employer and to the FLSA rules on which breaks count as paid working time. The only Michigan break mandate is for minors: the youth employment law requires a 30-minute meal and rest interval for a minor who works more than five continuous hours . For the adult workforce there is no state entitlement to a meal or rest break and no missed-break premium.

The minor-break rule is the exception that proves the rule — Michigan legislated a break entitlement only for young workers, and stopped there. The mandate is a 30-minute interval once a minor passes five continuous hours of work.

A minor shall not be employed for more than 5 hours continuously without an interval of at least 30 minutes for a meal and rest period.

For adults, break compensation is a matter of federal law. Under the FLSA, short rest breaks an employer chooses to offer are compensable working time, while a bona fide meal period of thirty minutes or more during which the employee is fully relieved of duties need not be paid. Michigan adds nothing on top for adult workers.

Sources for this answer

Primary source · Primary law · 1978-06-13

C.1 MCL § 409.112

Michigan mandates a meal-and-rest break only for minors — a 30-minute interval after five continuous hours of work — and imposes no meal-or-rest-break requirement on adult employees.

A minor shall not be employed for more than 5 hours continuously without an interval of at least 30 minutes for a meal and rest period.

See MCL § 409.112.

When is final pay due?

Michigan fixes no calendar deadline for final wages. An employer must pay a voluntarily departing employee all wages earned and due as soon as the amount can, with due diligence, be determined , and must pay a discharged employee immediately — a word the same subsection then qualifies with the identical due-diligence clause . Because neither subsection names a payday, final pay in practice converges on the next regularly scheduled pay cycle once the amount is determinable, rather than on any statutory day-of-separation deadline. Two narrow carve-outs adjust the timing: a voluntarily departing hand-harvest worker must be paid within three days , and a contract worker whose pay cannot be fixed until the contract ends is paid in full at that termination . Michigan has no California-style automatic waiting-time penalty; late payment is enforced administratively — the department orders the unpaid wages plus a penalty at 10% annually running from the date the employer is notified of the complaint until payment is made , and may add exemplary damages of up to twice the wages due for a flagrant or repeated violation .

The timing rule does not turn on the manner of separation. A voluntary quit and a discharge are governed by the same due-diligence standard.

An employer shall pay to an employee voluntarily leaving employment all wages earned and due, as soon as the amount can with due diligence be determined.

The discharge subsection reads immediately, but the same due-diligence qualifier follows, so it does not create a same-day deadline separate from the ordinary pay cycle.

An employer shall immediately pay to an employee who has been discharged from employment all wages earned and due, as soon as the amount can with due diligence be determined.

The penalty for paying late is administrative, not automatic. The department orders the shortfall plus a 10%-a-year charge that accrues only from the time a complaint is filed and notice is given.

The department shall order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay the following: (a) Wages due to the employee. (b) Fringe benefits due to or on the behalf of the employee in accordance with the terms set forth in the written contract or written policy. (c) A penalty at the rate of 10% annually on the wages and fringe benefits due beginning at the time the employer is notified that a complaint has been filed and ending when payment is made.

For a flagrant or repeated violation, the department may layer exemplary damages on top of the wages owed.

The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay to the employee exemplary damages of not more than twice the amount of the wages and fringe benefits which were due, if the violation is flagrant or repeated.

Practice caution

Do not read the discharge statute's word immediately as a same-day pay deadline. The same due-diligence clause qualifies both the quit and discharge subsections, so final pay in practice converges on the next regularly scheduled pay cycle rather than a fixed day-of-separation deadline, and the consequence of paying late is an administrative order — the department's 10% annual penalty — not an automatic per-day waiting-time penalty.

Sources for this answer

Primary source · Primary law · 1978-06-13

D.1 MCL § 408.475

Section 5 requires an employer to pay a voluntarily departing employee all wages earned and due as soon as the amount can with due diligence be determined — with no bright-line calendar deadline — and to pay a departing hand-harvest worker within three days.

An employer shall pay to an employee voluntarily leaving employment all wages earned and due, as soon as the amount can with due diligence be determined. However, an employer shall pay all wages earned and due to an employee engaged in any phase of the hand harvesting of crops as soon as the amount can, with due diligence, be determined, but, in any event, not later than 3 days after the employee's voluntary termination of employment.

See MCL § 408.475(1).

Primary source · Primary law · 1978-06-13

D.2 MCL § 408.475

Section 5 says a discharged employee must be paid immediately, but qualifies that word with the same due-diligence clause, so the statute sets no same-day calendar deadline.

An employer shall immediately pay to an employee who has been discharged from employment all wages earned and due, as soon as the amount can with due diligence be determined.

See MCL § 408.475(2).

Primary source · Primary law · 1978-06-13

D.3 MCL § 408.475

Section 5(3) carves out a contract worker whose pay cannot be determined until the contract ends: the employer estimates wages under section 2 in the interim and makes final payment in full at the termination of the contract.

This section shall not apply to an employee working under contract who either voluntary leaves employment or is discharged from employment if the amount due cannot be determined until the termination of the contract. In such cases, the employer shall pay to the employee under the provisions of section 2 all wages earned by the employee as nearly as they can be estimated. Final payment shall be made in full at the termination of the contract.

See MCL § 408.475(3).

Primary source · Primary law · 1978-06-13

D.4 MCL § 408.488

Section 18 makes late payment an administrative matter: the department orders the unpaid wages plus a 10%-a-year penalty running from the date the employer is notified of a complaint until payment is made — not an automatic waiting-time penalty.

The department shall order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay the following: (a) Wages due to the employee. (b) Fringe benefits due to or on the behalf of the employee in accordance with the terms set forth in the written contract or written policy. (c) A penalty at the rate of 10% annually on the wages and fringe benefits due beginning at the time the employer is notified that a complaint has been filed and ending when payment is made.

See MCL § 408.488(1).

Primary source · Primary law · 1978-06-13

D.5 MCL § 408.488

Section 18 lets the department order exemplary damages of up to twice the wages and fringe benefits due when a violation is flagrant or repeated.

The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay to the employee exemplary damages of not more than twice the amount of the wages and fringe benefits which were due, if the violation is flagrant or repeated.

See MCL § 408.488(2).

How often must workers be paid?

At least semi-monthly by default. The Payment of Wages and Fringe Benefits Act sets a twice-a-month baseline — wages for the first half of a month paid by the first of the next month, and wages for the second half paid by the fifteenth . The act then supplies safe harbors so a common payroll cadence still complies: an employer that runs a regularly scheduled weekly or biweekly payday satisfies the statute if it pays within fourteen days of the end of the work period, and an employer on a monthly pay period complies if it pays within fifteen days of the period's end . An employer may always pay more often than the statute requires.

The default rule pins two paydays to fixed calendar dates, keyed to the first and second halves of each month.

an employer shall pay the following to an employee: (a) On or before the first day of each calendar month, the wages earned by the employee during the first 15 days of the preceding calendar month. (b) On or before the fifteenth day of each calendar month, the wages earned by the employee during the preceding calendar month from the sixteenth day through the last day.

The weekly, biweekly, and monthly safe harbors that follow let most employers keep their existing schedule, so long as pay lands inside the statutory window after each work period closes.

Sources for this answer

Primary source · Primary law · 1978-06-13

E.1 MCL § 408.472

Section 2 sets a semi-monthly default payday — first-half wages by the first of the next month, second-half wages by the fifteenth.

an employer shall pay the following to an employee: (a) On or before the first day of each calendar month, the wages earned by the employee during the first 15 days of the preceding calendar month. (b) On or before the fifteenth day of each calendar month, the wages earned by the employee during the preceding calendar month from the sixteenth day through the last day.

See MCL § 408.472(1).

Primary source · Primary law · 1978-06-13

E.2 MCL § 408.472

Section 2 lets an employer keep a regularly scheduled weekly or biweekly payday if wages are paid within fourteen days of the end of the work period, and a monthly pay period if wages are paid within fifteen days of the period's end.

An employer who has established a regularly scheduled weekly or biweekly payday is in compliance with subsection (1) if both of the following conditions are met: (a) Wages are paid to the employee on the established regularly recurring payday. (b) The payday occurs on or before the fourteenth day following the end of the work period in which the wages are earned. (4) An employer who has established a regularly scheduled monthly pay period is in compliance with subsection (1) if the employer pays to the employee, within 15 days after the end of a monthly pay period, all wages earned during the monthly pay period.

See MCL § 408.472(3)-(4).

What must a pay statement show?

Michigan requires an itemized pay statement at each payment of wages. The Payment of Wages and Fringe Benefits Act directs the employer to furnish each employee, at the time of payment, a statement listing the hours worked, the gross wages paid, the pay period covered, and a separate itemization of deductions — and, for a hand harvester paid by the piece, the number of units harvested . This is a defined statutory list rather than a general recordkeeping gesture, so a bare check without the itemized breakdown does not comply. The one carve-out is the hours-worked component: an employer need not report hours worked for bona fide executive, administrative, and professional employees, public elective officials, and political appointees .

The statute names each element the statement must carry, tying the itemization to the moment wages are paid.

An employer shall furnish each employee at the time of payment of wages a statement of the hours worked by the employee, the gross wages paid, identification of the pay period for which payment is being made, a separate itemization of deductions, and for each hand harvester paid on a piece work basis furnish a statement of the total number of units harvested by the employee.

Sources for this answer

Primary source · Primary law · 1978-06-13

F.1 MCL § 408.479

Section 9 requires the employer to furnish each employee, at the time of payment, a statement showing hours worked, gross wages, the pay period, and a separate itemization of deductions.

An employer shall furnish each employee at the time of payment of wages a statement of the hours worked by the employee, the gross wages paid, identification of the pay period for which payment is being made, a separate itemization of deductions, and for each hand harvester paid on a piece work basis furnish a statement of the total number of units harvested by the employee.

See MCL § 408.479(2).

Primary source · Primary law · 1978-06-13

F.2 MCL § 408.479

Section 9(4) excuses the hours-worked component of the wage statement for employees in a bona fide executive, administrative, or professional capacity, public elective officials, and political appointees.

Employers need not maintain payroll records indicating the total hours worked by, or furnish wage statements of hours worked by: (a) An employee employed in a bona fide executive, administrative, or professional capacity, including an employee employed in the capacity of academic administrative personnel or teacher in an elementary or secondary school, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in the employee's workweek which the employee devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40% of the employee's hours in the workweek are devoted to those activities. (b) An individual who holds a public elective office. (c) A political appointee of a person holding public elective office or a political appointee of a public body.

See MCL § 408.479(4).

Employee or independent contractor?

For wage claims, Michigan uses the economic reality test — not the common-law right-of-control test, and not the IRS-style withholding-and-control factor test an employer might reach for. In Buckley v. Professional Plaza Clinic Corp., a Payment of Wages and Fringe Benefits Act case, the Court of Appeals held that a lower court clearly erred by failing to apply the economic reality test to decide whether a worker was an employee or an independent contractor . That test weighs the totality of the circumstances across four factors — control of the worker's duties, payment of wages, the right to hire, fire, and discipline, and whether the duties are an integral part of the employer's business — and no single factor decides the question . So a worker's status for a wage claim turns on those economic-reality factors, not on a contract label or the parties' tax treatment .

Buckley arose under the wage-payment act, and the court corrected a circuit court that had leaned only on tax withholding and control. The holding fixes the economic reality test as the governing wage-context standard.

Thus, we conclude that the circuit court clearly erred because it failed to apply, or misapplied, the economic reality test.

The test is a totality inquiry built on four enumerated factors — control of the worker's duties, payment of wages, the right to hire, fire, and discipline, and whether the duties are an integral part of the employer's business — rather than a single control question.

Because the list is nonexclusive and no factor controls, classification turns on the whole relationship rather than any one indicator such as a contract label or tax treatment.

Under this test, no one factor is dispositive; indeed, the list of factors is nonexclusive and a court may consider other factors as each individual case requires.

Practice caution

Do not import a tax-style factor test — the kind built on IRS withholding categories — or a bare right-of-control analysis into a wage-payment dispute. Buckley applies the economic reality test to wage claims and treats the failure to apply it as clear error, so a worker's status for a wage claim must be assessed on the four economic-reality factors and the totality of the circumstances .

Sources for this answer

Primary source · Primary law · 2008-10-02

G.1 Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)

Buckley holds that a court deciding employee-versus-contractor status under the Payment of Wages and Fringe Benefits Act clearly errs when it fails to apply the economic reality test.

Thus, we conclude that the circuit court clearly erred because it failed to apply, or misapplied, the economic reality test.

See Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).

Primary source · Primary law · 2008-10-02

G.2 Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)

Buckley states the four economic-reality factors — control of duties, payment of wages, the right to hire, fire, and discipline, and whether the duties are an integral part of the employer's business — weighed as a totality of the circumstances.

(1) [the] control of a worker's duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline, and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal.

See Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).

Primary source · Primary law · 2008-10-02

G.3 Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)

Buckley holds that no single economic-reality factor is dispositive and the list is nonexclusive, so classification turns on the totality of the circumstances.

Under this test, no one factor is dispositive; indeed, the list of factors is nonexclusive and a court may consider other factors as each individual case requires.

See Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).

Is a tip credit allowed?

Yes — a partial one that is being narrowed, not eliminated. The Improved Workforce Opportunity Wage Act lets an employer of tipped employees pay a reduced cash wage set as a percentage of the standard minimum, and that percentage rises on a fixed schedule: 40% of the minimum beginning January 1, 2026, climbing to 50% by January 1, 2031 . At the 2026 minimum of $13.73, the 40% cash wage is $5.49 an hour. The reduced rate is not automatic: it applies only if the employee's own gratuities equal or exceed the gap to the full minimum, the tips are proven through the employee's federal FICA declaration and retained by the employee (subject to voluntary sharing within the chain of service), and the employer informed the employee of the tip-credit provisions in writing and obtained written consent at or before hire . This preserved-but-capped structure is what 2025 PA 1 enacted after the Mothering Justice reset, in place of the full phase-out the reinstated initiative would have produced. Tips themselves stay with the worker: gratuities remain the property of the employee who receives them, whichever wage the employer pays .

The tipped cash wage is expressed as a percentage of the standard minimum, stepping up year by year toward a 50% floor.

The minimum hourly wage rate of an employee described in subsection (1) is as follows: (a) Beginning February 21, 2025, 38% of the minimum hourly wage rate established under section 4. (b) Beginning January 1, 2026, 40% of the minimum hourly wage rate established under section 4. (c) Beginning January 1, 2027, 42% of the minimum hourly wage rate established under section 4. (d) Beginning January 1, 2028, 44% of the minimum hourly wage rate established under section 4. (e) Beginning January 1, 2029, 46% of the minimum hourly wage rate established under section 4. (f) Beginning January 1, 2030, 48% of the minimum hourly wage rate established under section 4. (g) Beginning January 1, 2031, 50% of the minimum hourly wage rate established under section 4.

The credit does not let the employer keep the tips. Gratuities are the employee's property regardless of which wage the employer pays.

Except as otherwise provided under subsection (1)(d), gratuities remain the property of the employee who receives them, regardless of whether the employee's employer pays the employee the minimum hourly wage rate established under subsection (2) or the minimum hourly wage rate established under section 4.

Sources for this answer

Primary source · Primary law · 2025-02-21

H.2 MCL § 408.934d

Section 4d makes the reduced tipped cash wage available only if all statutory conditions are met — the employee receives gratuities that equal or exceed the gap to the full minimum, the gratuities are proven through the employee's FICA declaration and retained by the employee, and the employer gave written notice and obtained written consent at or before hire.

The minimum hourly wage rate of an employee must be established as provided for under subsection (2) if all of the following conditions are met: (a) The employee receives gratuities in the course of the employee's employment. (b) The gratuities described in subdivision (a) equal or exceed the difference between the minimum hourly wage rate established under subsection (2) and the minimum hourly wage established under section 4. (c) The gratuities are proven gratuities as indicated by the employee's declaration for purposes of the federal insurance contribution act, 26 USC 3101 to 3128. (d) Except as otherwise provided in this subdivision, the entirety of the gratuities are retained by the employee who receives them. This subdivision does not prohibit an employee from voluntarily sharing the employee's gratuities with another employee if the other employee is directly or indirectly part of the chain of service and the other employee's duties are not primarily managerial or supervisory. (e) The employee's employer informed the employee of the provisions of this section, in writing, at or before the time of hire, and the employee gave written consent.

See MCL § 408.934d(1).

Primary source · Primary law · 2025-02-21

H.1 MCL § 408.934d

Section 4d sets the tipped-employee cash wage as a percentage of the standard minimum — 40% beginning January 1, 2026, rising to 50% by January 1, 2031 — preserving a partial tip credit rather than eliminating it.

The minimum hourly wage rate of an employee described in subsection (1) is as follows: (a) Beginning February 21, 2025, 38% of the minimum hourly wage rate established under section 4. (b) Beginning January 1, 2026, 40% of the minimum hourly wage rate established under section 4. (c) Beginning January 1, 2027, 42% of the minimum hourly wage rate established under section 4. (d) Beginning January 1, 2028, 44% of the minimum hourly wage rate established under section 4. (e) Beginning January 1, 2029, 46% of the minimum hourly wage rate established under section 4. (f) Beginning January 1, 2030, 48% of the minimum hourly wage rate established under section 4. (g) Beginning January 1, 2031, 50% of the minimum hourly wage rate established under section 4.

See MCL § 408.934d(2).

Primary source · Primary law · 2025-02-21

H.3 MCL § 408.934d

Section 4d provides that gratuities remain the property of the employee who receives them, whether the employer pays the tipped cash wage or the full section-4 minimum.

Except as otherwise provided under subsection (1)(d), gratuities remain the property of the employee who receives them, regardless of whether the employee's employer pays the employee the minimum hourly wage rate established under subsection (2) or the minimum hourly wage rate established under section 4.

See MCL § 408.934d(4).

How is it enforced?

Each of the two wage statutes carries its own enforcement machinery. For a minimum-wage or overtime shortfall, the Improved Workforce Opportunity Wage Act lets the affected employee choose: bring a direct civil action, within three years, to recover the underpayment plus an equal amount as liquidated damages, costs, and attorney fees — or file a claim with the state director, who investigates and, if voluntary compliance fails, may bring the civil action on the employee's behalf . For a final-pay, pay-frequency, or pay-statement claim, the Payment of Wages and Fringe Benefits Act supplies a departmental complaint: the employee may file a written complaint with the department within twelve months of the alleged violation, and the department investigates, determines the merits, and orders relief . The department's monetary teeth — the 10% annual penalty and up-to-double exemplary damages — attach to violations of the wage-payment sections it enumerates, which include final pay and pay frequency; the pay-statement duty sits outside that penalty list and is backed instead by the act's general civil penalty .

The wage act gives the employee a choice of remedies — a private suit with liquidated damages, or a claim filed with the director — both within a three-year window.

If an employer violates this act, the employee affected by the violation, at any time within 3 years, may do any of the following: (a) Bring a civil action for the recovery of the difference between the amount paid and the amount that, but for the violation, would have been paid the employee under this act and an equal additional amount as liquidated damages together with costs and reasonable attorney fees as are allowed by the court. (b) File a claim with the director who shall investigate the claim.

Wage-payment claims take the administrative route, opening with a written complaint the employee may file within a twelve-month window.

An employee who believes that his or her employer has violated this act may file a written complaint with the department within 12 months after the alleged violation.

Sources for this answer

Primary source · Primary law · 2025-02-21

I.1 MCL § 408.939

Section 9 lets an employee affected by a minimum-wage or overtime violation choose, within three years, between a private civil action for the shortfall plus an equal amount as liquidated damages, costs, and attorney fees, and filing a claim with the director.

If an employer violates this act, the employee affected by the violation, at any time within 3 years, may do any of the following: (a) Bring a civil action for the recovery of the difference between the amount paid and the amount that, but for the violation, would have been paid the employee under this act and an equal additional amount as liquidated damages together with costs and reasonable attorney fees as are allowed by the court. (b) File a claim with the director who shall investigate the claim.

See MCL § 408.939(1).

Primary source · Primary law · 1978-06-13

I.2 MCL § 408.481

Section 11 lets a Payment of Wages and Fringe Benefits Act employee file a written complaint with the department within twelve months of the alleged violation, after which the department investigates and determines the merits.

An employee who believes that his or her employer has violated this act may file a written complaint with the department within 12 months after the alleged violation.

See MCL § 408.481(1).

Primary source · Primary law · 1978-06-13

I.3 MCL § 408.488

Section 18's department-ordered remedies — unpaid wages, the 10% annual penalty, and exemplary damages of up to twice the amount due — reach violations of the enumerated wage-payment sections (2 through 8, which include pay frequency and final pay); a separate general civil penalty of up to $1,000 reaches any violation of the act.

The department shall order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay the following: (a) Wages due to the employee. (b) Fringe benefits due to or on the behalf of the employee in accordance with the terms set forth in the written contract or written policy. (c) A penalty at the rate of 10% annually on the wages and fringe benefits due beginning at the time the employer is notified that a complaint has been filed and ending when payment is made. (2) The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay to the employee exemplary damages of not more than twice the amount of the wages and fringe benefits which were due, if the violation is flagrant or repeated. (3) The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay attorney costs, hearing costs, and transcript costs. (4) The department may assess a civil penalty of not more than $1,000.00 against an employer who violates this act, which civil penalty shall be credited to the general fund of this state.

See MCL § 408.488.

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