Michigan employers should note that a new minimum wage increase takes effect January 1, 2026. Under legislation passed in February 2025, the minimum hourly wage will rise to $13.73 per hour on January 1, with a corresponding increase to the tipped employee minimum wage.

Beginning January 1, 2026, the minimum wage for tipped employees will increase to 40 percent of the standard minimum wage, $5.49 per hour, continuing a phased-in schedule in future years.

Employers should review payroll practices, budgeting, and compliance policies now to prepare for the upcoming changes. Additional increases are scheduled for 2027 and beyond, with future adjustments tied to inflation.