LANSING, Mich. — Starting Friday, workers earning minimum wage in Michigan have begun to see an increase in their pay following a compromise reached between Democratic Governor Gretchen Whitmer and Republican lawmakers. This agreement modifies regulations regarding sick leave and wages for employees in tipped positions to alleviate concerns expressed by business owners about possible job reductions.
The raise that took effect on Friday was previously scheduled, but a sufficient number of Democrats decided to collaborate with Republicans in the Legislature to expedite future increases. In doing so, they made certain concessions to businesses that had cautioned against the potential ramifications of significant wage hikes.
Governor Whitmer lauded the bipartisan effort in a statement from her office, recognizing the cooperation of both parties in achieving a fair solution. Over 280,000 residents had originally backed a substantial overhaul of the state’s minimum wage seven years ago. However, instead of allowing the issue to be voted on during the 2018 statewide ballot, the Republican-dominated legislature enacted changes that were subsequently diluted before the new governor and a refreshed legislative body took office. A ruling by the Supreme Court last year deemed these actions illegal and restored the initial alterations, a decision that garnered support from labor unions.
One Fair Wage, a national organization advocating for higher minimum wages, expressed strong opposition to the legislation approved by Governor Whitmer. The organization plans to initiate a referendum to revert the law back to the Supreme Court’s ruling. “We’re mobilizing to ensure voters—not politicians—have the ultimate say in whether these protections are upheld,” stated Saru Jayaraman, President of One Fair Wage.
As of January 1, 2025, Michigan’s minimum wage was recorded at $10.56 an hour, with tipped workers receiving an even lower rate. thanks to the court’s decision, the minimum pay will now increase to $12.48 per hour effective Friday. Under the terms of the compromise enacted by Whitmer, this minimum wage is expected to rise to $15 an hour by 2027, an acceleration of the schedule previously mandated by the court. Following this, annual adjustments based on inflation, as determined by the state treasurer, will also come into effect.
However, the legislators removed provisions that would have completely eliminated the lower wage structure for tipped employees. Instead, the wage for these workers will be adjusted to reach 50% of the state’s minimum wage by the year 2031.
There are concerns among some bartenders and restaurant servers that patrons might feel less inclined to tip generously if they are aware that their wages are higher. John Sellek, a representative for Save MI Tips, a group advocating for maintaining lower wages for tipped workers, remarked in a statement, “Michigan servers and bartenders can sleep a little easier knowing a bipartisan legislative solution to the impending tip credit crisis is a big step closer to reality.”
Under the agreement finalized late Thursday, businesses with 10 employees or fewer are required to provide either five days of paid sick leave per year or one hour for each 30 hours worked. Larger businesses must offer nine days of leave. Small businesses have until October to comply with these new regulations, which extend the original court-imposed deadline and eliminate the previous mandate of an additional 32 hours of unpaid leave for employees.
While both parties took steps back in negotiations, Republicans predominantly supported the final passage of the changes, in contrast to a split among Democrats.
“It is urgent that we have a deal,” stated Republican Speaker of the House Matt Hall on Wednesday, emphasizing the need for a timely agreement to avoid blame from the public. Following disputes in December, where House Republicans walked out in protest against the Democrats for not addressing the wage adjustments ordered by the court, a Democrat’s departure from the session left the House chamber without the necessary quorum, resulting in the collapse of several priority bills.
In the aftermath of the November elections, House Republicans reclaimed the majority in the chamber, while Democrats continue to hold a majority in the Senate. The new laws will be retroactive to just after midnight on Friday, thereby fulfilling the court’s deadline.
