No Minimum Wage Increase in January 2021

Date: December 14, 2020

Michigan's 2021 minimum wage increase is cancelled

The Michigan Wage and Hour Division announced the state’s scheduled hourly minimum wage increase to $9.87 is not expected to go into effect on January 1, 2021 and will remain at the current $9.65 an hour rate. Tipped employees rates of pay will remain $3.67 an hour and the training wage for newly hired employees aged 16 and 17 will remain at $4.65 an hour for their first 90 days.

The current minimum wage act passed in 2018 prohibits scheduled minimum wage increases if the state’s annual unemployment rate for the preceding calendar year is above 8.5 percent. The annual unemployment average from January through October is 10.2 percent and unlikely to dip below the 8.5 percent threshold when the final 2020 unemployment numbers are released.

While Michigan’s October unemployment rate continued its downward trend and is 5.5%, the annual average from January through October currently sits at 10.2% and is highly unlikely to dip below the 8.5% threshold when the federal Bureau of Labor Statistics (BLS) releases the final 2020 unemployment numbers for Michigan.

The next minimum wage increase to $9.87 will occur following the next calendar year when the annual unemployment rate is less than 8.5 percent.

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