Michigan minimum wage increase alert

by Cameron D. Ritsema, Bodman PLC

Under Michigan’s Improved Workforce Opportunity Wage Act (IWOWA), minimum wage increases in the state took effect on January 1, 2026.

Who is covered?

• IWOWA applies to employees who work in Michigan for employers with two or more employees, 16 years of age and older.
• Employers subject to both federal and state minimum hourly wage rates should follow the stricter (in this case, Michigan’s) hourly wage rate.

New rates

Minimum hourly wage. As of January 1, 2026, the minimum hourly wage increased from $12.48 to $13.73 per hour.

Minor hourly wage. The 85% rate for minors (workers between 16 and 18 years old) increased from $10.60 to $11.67 per hour.

Tipped hourly wage. The minimum wage for employees who receive tips increased to $5.49 per hour (40% of the full minimum wage), provided the employee receives at least $8.24 per hour in tips. Reminder: Tipped employees must (1) be informed of their employer’s tip provisions, (2) receive and report tips, and (3) receive equal to or above the minimum wage rate by combination of tips and minimum hourly rate (or the employer must pay the shortfall).

Training hourly wage. The $4.25 per hour wage rate for newly hired employees under the age of 20 for their first 90 calendar days of employment remains unchanged.