Michigan Minimum Wage: Rates and Rules for Employers

Michigan's minimum wage went up again on January 1, 2026, and it's scheduled to keep climbing. For any owner paying an hourly team, that makes "what do I actually owe each person?" a question worth getting right, because the answer changed recently and depends on who you're paying.

It's not one flat number. The Michigan minimum wage has separate rates for standard employees, tipped workers, minors, and brand-new hires, and the whole schedule was reshaped in the past two years by a court ruling and new legislation. 

This guide walks through the current Michigan minimum wage for every worker type, how overtime is calculated, what's coming next, and the steps that'll help you stay compliant.

Michigan minimum wage rates at a glance

The current Michigan minimum wage is $13.73 per hour as of January 1, 2026. That rate applies to most hourly employees, but several worker types have their own numbers, and the figure's on a fixed schedule of increases. Here's everything in one place:

• Standard minimum wage: $13.73 per hour.
• Tipped minimum wage: $5.49 per hour in cash, as long as tips bring the total to at least $13.73 per hour.
• Minors aged 16 to 17: $11.67 per hour, which is 85% of the standard rate.
• Training wage: $4.25 per hour for new hires under 20, for their first 90 days.
• Overtime: at least $20.60 per hour, which is 1.5 times the standard rate, for hours over 40 in a workweek.
• Next scheduled increase: $15.00 per hour on January 1, 2027.

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What is the minimum wage in Michigan right now?

The current minimum wage in Michigan is $13.73 per hour as of January 1, 2026, up from $12.48. It applies to employers with two or more employees aged 16 and older. Where both state and federal rules apply, you follow whichever rate is higher.

Michigan vs. the federal minimum wage

The federal minimum wage is still $7.25 per hour, so Michigan state minimum wage is the one you'll follow. When a state rate sits above the federal floor, the higher number wins. If your business crosses state lines or employs workers covered by both laws, apply whichever rate is greater for each worker.

When does the Michigan minimum wage rate take effect?

One detail trips up a lot of owners during a raise year: the new rate kicks in based on the pay date, not the hire date or when the hours were worked. Here's what that looks like in practice:

• If a pay period straddles January 1, the hours paid out on or after that date use the new rate.
• If your pay date falls before January 1, that run is processed under the prior rate even if some hours were worked after the increase.
• Workers under 16 fall outside these minimum wage provisions entirely.

Getting that into your payroll calendar before December keeps you from underpaying in the first run of the year.

Michigan tipped minimum wage and the tip credit

The tipped minimum wage Michigan sets, including the Michigan server minimum wage restaurants follow, is $5.49 per hour in cash, or 40% of the standard wage. The catch is that their tips plus that cash wage need to reach at least $13.73 per hour. If they fall short in any pay period, you cover the gap.

This is the part of the law where small mistakes get expensive, so it helps to see the math.

How the tip credit works, with an example

Say a server earns the $5.49 cash wage and works a slow lunch shift. Their tips average only $6.00 per hour. Cash plus tips comes to $11.49 per hour, below the $13.73 floor, so you owe the $2.24 per hour gap for that shift.

On a busy night when tips push well past $13.73, no makeup payment is needed. You check the math against the standard minimum wage every pay period.

Michigan tipped wage rules every employer needs to know

These rules apply whether you're looking at the server minimum wage Michigan requires, the waitress minimum wage Michigan sets, it's the same rate for all tipped employees. A few specifics to know:

• Notification: you need to tell tipped employees you're taking the tip credit before it's applied.
• Tip reporting: employees report their tips, and you track them.
• No management tip pooling: managers and supervisors can't participate in tip pools or take any portion of employee tips.
• Rising percentage: the tipped percentage climbs on a fixed schedule, 40% in 2026, rising by 2% each year, reaching 50% by 2031. The cash portion you owe grows alongside the standard rate every year.

Minimum wage for minors and the training wage in Michigan

The Michigan minimum wage for minors aged 16 to 17 is 85% of the standard wage, $11.67 per hour in 2026. Separately, newly hired employees under 20 can earn a $4.25 training wage for their first 90 calendar days.

Youth rate vs. training wage: what's the difference?

These are two separate rules, and they get mixed up constantly. Here's how they actually compare:

• Youth rate (16 to 17 year olds): tied to age. The minimum wage in Michigan for 16 year olds (and 17 year olds) is $11.67 per hour for as long as the worker's in that range. It turns off when they turn 18.
• Training wage (new hires under 20): tied to tenure, not age. Pays $4.25 per hour for the first 90 calendar days of employment, regardless of age. After 90 days, they move to whatever rate fits their age and role.

Workers under 16 fall outside the standard minimum wage provisions entirely, so neither rate applies. If you hire seasonal teenagers or first-time workers, tracking both the age and the hire date separately keeps your payroll clean and your records defensible.

How overtime pay works under Michigan minimum wage law

Michigan requires overtime pay of 1.5 times an employee's regular rate for any hours worked over 40 in a single workweek. At the current minimum wage, that puts the floor at $20.60 per hour. Overtime's calculated weekly, not by the day, and Michigan doesn't require daily overtime or double time.

There's a knock-on effect worth planning for: every time the minimum wage rises, the overtime floor rises with it. As the standard rate climbs toward $15.00 in 2027, the minimum overtime rate climbs too. For a small business running a tight labor budget, unplanned overtime is a cost that quietly scales with every raise year.

Which employees are exempt from Michigan overtime?

Not everyone qualifies for overtime. Michigan exempts these worker categories:

• Executive, administrative, and professional employees who meet both the federal salary threshold ($684 per week) and the applicable duties test.
• Agricultural employees, due to the seasonal and variable nature of farm work.
• Seasonal amusement and recreational workers at establishments open fewer than seven months a year.
• Elected officials and political appointees.

Worth keeping in mind: if an employee doesn't meet both the salary threshold and the duties test, the job title alone doesn't make them exempt. Misclassification is one of the most common overtime mistakes out there, and you still have to pay for overtime hours even if the employee worked them without authorization.

Catching overtime before it happens beats paying for it after the fact. The time clock in tools like Homebase sends overtime alerts as employees near the 40-hour threshold, which gives you room to adjust the schedule while shifts are still easy to cover.

Upcoming changes to the Michigan minimum wage

Michigan's minimum wage increase schedule is set by law. Here's where it stands and where it's headed:

• February 21, 2025: $12.48 per hour (the rate that followed the Michigan Supreme Court ruling).
• January 1, 2026: $13.73 per hour, the current Michigan minimum wage 2026 rate.
• January 1, 2027: $15.00 per hour, the scheduled Michigan minimum wage 2027 increase.
• January 1, 2028 and beyond: annual inflation adjustments using the Consumer Price Index for the Midwest region, with the adjusted rate published by November 1 each year.

One built-in exception can pause any scheduled increase, worth knowing before you set your labor budget.

Could a scheduled increase be paused?

If you're wondering whether a Michigan minimum wage increase is coming, or simply asking: is minimum wage going up in Michigan?, yes, it's scheduled. An increase doesn't take effect if Michigan's unemployment rate for the prior year was 8.5% or higher.

This isn't hypothetical: it happened in 2021, when high pandemic-era unemployment froze the planned raise and the wage held at $9.65. So while the Michigan minimum wage schedule points clearly toward $15.00 in 2027, a sharp economic downturn the year before could delay it.

The reason the schedule looks the way it does today comes down to recent history. A 2024 Michigan Supreme Court decision in Mothering Justice v. Attorney General revived the original 2018 wage law, and the legislature followed with a bipartisan fix signed in February 2025 that set the current rate schedule and preserved the tip credit. 

That's exactly why the number keeps moving, and why it's worth bookmarking a page like this one.

How to stay compliant with Michigan minimum wage requirements

Staying compliant comes down to a handful of recurring tasks: paying the right rate to the right worker, posting the required notice, and keeping clean records. None of it is complicated on its own, but missing any one of them carries real penalties. Here's how to keep it straight.

Update payroll for Michigan minimum wage rates and worker types

The trickiest part is that your team might include standard, tipped, minor, and training-wage workers all at once, each at a different rate. When the minimum wage changes, every affected rate needs to update on the right pay date. Running each one by hand is where errors creep in, especially in a raise year.

This is where keeping time tracking and pay in one place earns its keep. Homebase payroll applies the correct rate automatically and supports multiple pay rates for the same team, so a January increase flows through without manual recalculation.

Display the required workplace poster

You need to post the state's Minimum Wage, Overtime, and Paid Leave notice from the Department of Labor and Economic Opportunity where your employees can see it. Whenever the rate changes, update the posted notice to reflect the current figures. Keep a digital copy for your records too.

Keep accurate records

You'll need to keep accurate wage and hour records for at least three years. If you're ever audited, those records are what show you paid correctly, covered tip shortfalls, and applied the right youth or training rates. The law keeps shifting in Michigan, and it's easy to miss an update. HR Pro sends law alerts when state and federal rules change, which takes that ongoing monitoring off your plate.

What are the penalties for Michigan minimum wage violations?

The penalties add up fast:

• Up to $1,000 civil fine for failing to pay minimum wage or overtime.
• Up to $2,500 civil fine for failing to pay the tipped minimum wage.
• Back wages owed to the affected employee.
• Liquidated damages equal to the amount of back wages.
• Attorney fees and court costs if it goes to civil action.

“I can say without a doubt that having Homebase simplified my life greatly. Homebase saves me frustration. That is as important to me as numbers. The fact that I'm not wasting time being angry and frustrated is worth so much to me,” Kala Maxym, Co-founder, The Chocolate Dispensary

Take the guesswork out of Michigan minimum wage compliance with Homebase

Michigan's minimum wage is $13.73 per hour in 2026, with separate rates for tipped workers, minors, and new hires, and it's on track to reach $15.00 in 2027. Paying your team correctly means applying the right rate to each person, keeping records, and posting the current notice, year after year as the number moves.

Doing that by hand gets harder with every raise. When your time tracking and pay run together, the right rate applies on the right pay date automatically, multiple pay rates and tip handling are built in for mixed teams, and you spend less of January double-checking math. That's what we built Homebase payroll to do.

“Every time I open up payroll, I'm happy, because of how simple it is,” Bradley Cooke, Executive Director, Forebay Aquatic Center

Frequently asked questions about Michigan minimum wage

What is the minimum wage in Michigan?

Michigan's minimum wage is $13.73 per hour as of January 1, 2026, up from $12.48. It applies to employers with two or more employees aged 16 and older, and where state and federal rules overlap, you always follow whichever rate is higher.

What is the tipped minimum wage in Michigan?

The tipped minimum wage in Michigan is $5.49 per hour in cash, which is 40% of the standard wage. Tips plus the cash wage need to reach at least $13.73 per hour, and if they fall short, the employer covers the difference.

What is the minimum wage for minors in Michigan?

The minimum wage for minors aged 16 to 17 in Michigan is $11.67 per hour, or 85% of the standard rate. New hires under 20 can also be paid a separate $4.25 training wage for their first 90 days, that's a different rule from the youth rate.

Is the Michigan minimum wage going up?

When does minimum wage go up in Michigan? The next increase is January 1, 2027, when the rate rises to $15.00 per hour, then adjusts annually for inflation starting in 2028. A scheduled increase can be paused if the state's unemployment rate for the prior year hits 8.5% or higher.

What is the overtime rate in Michigan?

Michigan's overtime rate is 1.5 times an employee's regular rate for hours worked over 40 in a workweek, a floor of $20.60 per hour at the current minimum wage. Overtime's calculated weekly, and Michigan doesn't require daily overtime or double time.

Is overtime taxed differently in Michigan?

Overtime in Michigan is taxed as regular income, though two temporary deductions now apply: a federal deduction under the One Big Beautiful Bill Act for tax years 2025 through 2028, and a Michigan state deduction under HB 4961 for tax years 2026 through 2028. The full picture is covered in our guide on whether overtime is taxed more.