News & Information
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| For Immediate Release |
Contact: Andy Deloney |
July 14, 2009
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517/377-3931 |
Federal Minimum Wage Increase Takes Effect July 24 – How Does This Affect You?
Effective July 24, 2009, the federal minimum wage increases from $6.55 per hour to $7.25. Michigan’s minimum wage remains at $7.40 and the payroll wage for tipped employees remains at $2.65 per hour.
Michigan employers employing 2 or more employees who are at least 16 years old are still required to pay the Michigan minimum wage of $7.40 per hour.
Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wage rates. Since the new federal minimum wage is less than the required Michigan minimum wage, the state wage of $7.40 applies.
Youth employment rate
Minor employees aged 16 or 17 years may be paid a youth wage that is equal to or greater than 85 percent of the state minimum hourly wage rate. Using this formula, the state youth minimum wage would be $6.29.
However, because of the federal standard where an employee is entitled to the higher of the two minimum wage rates (as 16- and 17-year-olds are), the employee is entitled to the higher of the two minimum wage rates. Therefore, effective July 24, 2009, 16- and 17-year-olds in Michigan must be paid a minimum wage of $7.25.
Payroll wage for tipped employees
The state minimum payroll wage for tipped employees remains $2.65 per hour provided that the employee earns an average of $4.75 per hour in tips. If the employee does not earn at least that much in tips, the employer’s obligation is to pay as much in payroll that is necessary to get the tipped employee to $7.40 per hour. A written tip statement signed by the employee AND dated before the date the paycheck was received must be maintained by the employer for each pay period that tips are reported. Members of the Michigan Restaurant Association (MRA) can contact the MRA Public Affairs Department to get questions answered in regard to the minimum wage law.
Payroll wage for tipped employees aged 16 or 17 years
The state minimum payroll wage for 16- and 17-year-old tipped employees remains $2.65 per hour provided that they earn an average of $4.60 per hour in tips to ensure the employees receives a total minimum of $7.25 per hour to satisfy the new federal minimum wage requirement. If the employee does not earn at least that much in tips, the employer’s obligation is to pay as much in payroll that is necessary to get the 16- and 17-year-old tipped employees to $7.25 per hour. A written tip statement signed by the employee AND dated before the date the paycheck was received must be maintained by the employer for each pay period that tips are reported.
Founded in 1921, the Michigan Restaurant Association represents more than 4,500 Michigan foodservice establishments. The foodservice industry plays an integral role in Michigan’s economy, employing more than 436,000 people and creating more than $11.3 billion in total annual sales. For more information, call (517) 482-5244.
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