Michigan’s minimum wage will jump to $12 an hour in February 2025

Michigan’s minimum wage will jump to over $12 an hour early next year as a result of a July 31 Michigan Supreme Court ruling.

In a 4-3 decision, the state’s high court said that Republican lawmakers had in 2018 unconstitutionally adopted two initiatives — one to increase the state’s minimum wage and a second mandating all employers provide employees with paid sick leave — in order to prevent them from appearing on the general election ballot, but then amended the proposal’s language to weaken some of its key provisions after the election.

“In sum, by adopting the Wage Act and the Earned Sick Time Act and then later stripping those acts of their key features in the same legislative session, the Legislature unconstitutionally violated the people’s initiative rights,” Justice Elizabeth Welch wrote in the majority opinion. “Accordingly, we hold that the Amended Wage Act and the Amended Earned Sick Time Act are unconstitutional.”

The court decision restored the original intent of the ballot measures, effectively raising the state’s minimum wage and enacting a new paid sick leave policy that will both take effect on Feb. 21, 2025. The Supreme Court opinion stated that the new rules were written so as to give business owners enough time to prepare to comply with the forthcoming changes to pay and time-off policies.

Michigan’s minimum wage is currently $10.33 per hour, and even less for tipped workers, disabled individuals and 16- and 17-year-olds. Starting in February, the minimum wage will be about $12.50, based on the amount stipulated when the initiatives were originally adopted plus an amount calculated based on federal Bureau of Labor Statistics inflation data. By 2028, the state’s minimum wage will be about $15 an hour and will increase with inflation in the years thereafter.

The law will also gradually phase out a lower minimum wage for tipped workers. In February, tipped workers will begin making 48% of the adopted minimum wage, up from the current 38% standard. This will increase to 60% of the minimum wage in 2026, 70% in 2027, and 80% in 2028. By 2029, tipped workers will receive the same minimum hourly wage as nontipped workers.

Saru Jayaraman, the founder and president of the advocacy organization One Fair Wage, applauded the court’s ruling in a statement. One Fair Wage helped to gather more than 400,000 signatures for the original ballot initiative and was among the plaintiffs in the lawsuit decided on July 31.

“This is a great day for the more than 860,000 workers in Michigan who are getting a raise,” Jayaraman said. “We have finally prevailed over the corporate interests who tried everything they could to prevent all workers, including restaurant workers, from being paid a full, fair wage with tips on top.”

Under the ruling, employers with fewer than 50 workers will no longer be exempt from offering employees paid sick leave. Michigan businesses with fewer than 10 employees will be required to allow their workers to accrue up to 40 hours of annual paid sick leave, and larger employers will have to allow their employees to accrue up to 72 hours of annual paid sick leave. 

Michigan Attorney General Dana Nessel, who was named as a defendant in the lawsuit in her official capacity but supported the plaintiffs’ argument, called the court’s ruling a landmark victory for Michigan voters.

“The Legislature cannot manipulate its power to undermine the will of the people,” Nessel said in a statement. “This ruling sends a clear message that elected officials cannot disregard the voices of their constituents. I am glad to see the Court recognize and respect that the people reserved for themselves the power of initiative, a crucial tool meant to shape the laws that govern them.”