ARE YOU PREPARED FOR THE JANUARY 1, 2017 MINIMUM WAGE INCREASE AND POSTING REQUIREMENTS?

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By: JAMES M. REID 

Effective January 1, 2017, minimum wage will be increased from $8.50 ($3.23 for tipped employees) to $8.90 ($3.38 for tipped employees) pursuant to the Michigan Workforce Opportunity Wage Act (the “Act”), which repealed the Minimum Wage Act of 1964 in 2014.

In addition, on January 1, 2018, minimum wage will be increased to $9.25 ($3.52 for tipped employees).  Starting in 2019 and thereafter, any increases to minimum wage will be calculated by the average annual change in the consumer price index for the midwest region for the most recent five-year period.  However, there will not be any increase if Michigan’s unemployment rate (as determined by the bureau of labor statistics of the United States Department of Labor) was over 8.5% for the preceding year.  In addition, the maximum yearly increase will be capped at 3.5%.  The new rate will be posted by February 1 of each year on the Wage and Hours Division of the Department of Licensing and Regulatory Affairs’ website and the adjusted rate is effective on April 1 of such year.  The rate for tipped employees will be 38% of the inflation-adjusted minimum wage. 

Employees covered by the overtime provisions of the Act must be paid one and a half times their regular rate of pay for all hours actually worked exceeding 40 hours in a workweek.

The Act also requires employers to post a copy of the Act, or the Michigan Occupational Safety and Health Administration (“MIOSHA”) poster, WHD 9904 MIOSHA Required Poster, General Requirements – Minimum Wage and Overtime, in the workplace.  MIOSHA works collaboratively with employers and employees to: (1) protect earned wages and fringe benefits; and (2) prevent workplace injuries, illnesses, and fatalities. 

As is common with many employment laws, employers should also be aware of all other related laws that may be applicable and/or overlapping.  In order to ensure compliance with the Act and other related employment laws regarding payments (including, without limitation, the Michigan Payment of Wages and Fringe Benefits Act, the Michigan Sales Representative Act, and the Federal Fair Labor Standards Act), employers may want to seek the advice of an experienced employment attorney.

This article was written by JAMES M. REID, a member of the Legal Affairs Committee of Detroit SHRM, a Resource Partner and Director of MISHRM, and a shareholder of the law firm of Maddin Hauser Roth & Heller PC located in Southfield, Michigan. He can be reached at (248) 351-7060 or jreid@maddinhauser.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. December 2016.