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| For Immediate Release |
Contact: Andy Deloney |
May 15, 2008
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517/377-3931 |
Alert: Michigan Minimum Wage Set to Increase on July 1st
Effective July 1, the Michigan minimum wage will increase from the current rate of $7.15 per hour to $7.40. Michigan employers need to be aware of the following information to be compliant with the law and avoid wage and hour violations.
Michigan employers employing 2 or more employees who are at least 16 years old are required to pay the Michigan minimum wage of $7.40 per hour beginning July 1, 2008. The federal minimum wage is set to increase to $6.55 per hour July 24, 2008, but is less than the required Michigan minimum wage; 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. Therefore the state wage of $7.40 applies.
Overtime rate
The state minimum wage law still provides an overtime rate of 1½ times the regular rate of pay for non-exempt employees. Effective July 1, 2008, the overtime rate will be $11.10.
Payroll wage for tipped employees
The minimum payroll wage for tipped employees will remain at $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 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.
Overtime rate for tipped employees
The formula for determining the overtime rate for tipped employees remains the same:
[minimum wage rate x 1.5] - tip credit = overtime pay rate
Currently, the formula looks like this, provided reported tips per hour were equal to or greater than $4.50:
[$7.15 x 1.5] - $4.50 = $6.225
Effective July 1, 2008 the formula is as follows, provided reported tips per hour are equal to or greater than $4.75. Note that the value of the tip credit is increased because of the higher minimum wage:
[$7.40 x 1.5] - $4.75 = $6.35
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. Currently, the youth minimum wage is $6.08. Effective July 1, 2008, the youth minimum wage will increase to $6.29.
However, the state 85 percent rate of $6.29 is valid only between July 1, 2008 and July 23, 2008. Effective July 24, 2008, the federal minimum wage will increase to $6.55. Remember, where an employee is subject to both the state and federal minimum wage laws (as 16- and 17-year-olds are), the employee is entitled to the higher of the two minimum wage rates. Therefore, effective July 24, 2008, 16- and 17-year-olds in Michigan must be paid a minimum wage of $6.55.
Training wage
There is no change in the Michigan training wage. Under the state minimum wage law, new employees 16- to 19-years-old may be paid a training wage of $4.25 per hour for first 90 days of employment or until the day they turn 20-years-old, whichever happens first.
Questions or concerns?
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. Simply pick up the phone and dial 800.968.9668.
Labor law posters
The MRA can help you ensure you stay current with all the posting requirements of state and federal law. Call the MRA at 800.968.9668 or purchase them online – members get a discount!
The Michigan Restaurant Association (MRA) is the recognized leader of Michigan's hospitality industry, providing essential services to the foodservice community. Founded in 1921, the MRA represents more than 4,500 Michigan foodservice establishments. The industry plays an integral role in Michigan's economy, employing more than 423,000 people and creating more than $12.8 billion in annual sales. For more information please call 800-968-9668.
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