Michigan Minimum Wage Rules: MCL 408.931, 2025 PA 1 & Back Pay Formulas
An authoritative legal guide to Michigan’s statutory $13.73 per hour wage floor, the historical evolution under Mothering Justice and 2025 PA 1, youth and training wage provisions, and back-pay enforcement.
Direct Answer Summary
Michigan's standard minimum wage is $13.73 per hour for all covered non-exempt employees throughout calendar year 2026. Following the Michigan Supreme Court's landmark 2024 decision and the enactment of 2025 Public Act 1, rates increased from $10.56 to $12.48 on February 21, 2025, stepped to $13.73 on January 1, 2026, and will reach $15.00 on January 1, 2027. Coverage begins at 2 or more employees. Minors aged 16–17 may be paid 85% ($11.67/hr in 2026), and a $4.25 training wage applies to new hires under 20 during their initial 90 calendar days. Any wage paid below the applicable statutory floor is an unlawful underpayment recoverable through LEO or civil action.
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Verify gross earnings, test youth and training wage eligibility, and calculate exact back-pay shortfalls.
1. Statutory Framework: MCL 408.931 et seq. & 2025 PA 1
Michigan's minimum wage is governed by the Improved Workforce Opportunity Wage Act (Public Act 337 of 2018, codified at MCL 408.931–408.945).
In July 2024, the Michigan Supreme Court ruled in Mothering Justice v. Attorney General that the Legislature's 2018 adopt-and-amend tactic was unconstitutional, ordering the reinstatement of voter-initiated wage schedules. In response to commercial uncertainty, the Legislature passed 2025 Public Act 1 (effective February 21, 2025), which enacted the following definitive statutory progression:
- Prior Baseline (through Feb 20, 2025): $10.56 per hour.
- February 21, 2025 – December 31, 2025: $12.48 per hour.
- January 1, 2026 – December 31, 2026: $13.73 per hour.
- January 1, 2027 – December 31, 2027: $15.00 per hour.
- Post-2027 Adjustments: Annual inflation indexation calculated by the State Treasurer, not to exceed 3.5% annually.
2. Employer Coverage & Youth/Training Sub-Minimum Rates
Under MCL 408.932(d), an employer is covered by Michigan minimum wage law if it employs 2 or more employees at any one time within a calendar year. Employers with only 1 worker are exempt from the state statute (though federal FLSA coverage at $7.25/hr applies if interstate commerce standards are met).
Permissible Sub-Minimum Wage Tiers (MCL 408.934b)
- Youth Wage (Ages 16–17): Employers may pay minors aged 16 and 17 exactly 85% of the standard minimum wage. In 2026, 85% of $13.73 equals $11.67 per hour ($11.6705 rounded). In 2027, 85% of $15.00 equals $12.75 per hour.
- Training Wage (Under Age 20): Under MCL 408.934b(2), an employer may pay a newly hired employee under 20 years old a training wage of $4.25 per hour for the first 90 calendar days of employment. Employers may not displace existing employees to hire training-wage workers.
- Minors Under Age 16: Individuals under age 16 are exempt from the state minimum wage act under MCL 408.940(1)(a).
3. Mathematical Back-Pay Formulas & Worked Examples
When an employer pays an hourly wage below the statutory mandate, back pay equals the exact shortfall between statutory required gross pay and confirmed gross wages received.
Required Gross Pay = Hours Worked × Statutory Rate
Wage Shortfall = max(0, Required Gross Pay - Confirmed Gross Wages Paid)
Worked Numerical Examples
Employee works 40 hours in June 2026 at the statutory $13.73/hr rate. Required earnings = 40 × $13.73 = $549.20. Gross pay received = $549.20. Shortfall = $0.00 (Fully Compliant).
Employee works 35 hours in October 2026 and is paid $12.00/hr ($420.00 gross). Statutory earnings floor = 35 × $13.73 = $480.55. Confirmed wage shortfall = $480.55 - $420.00 = $60.55 in back pay owed.
A 17-year-old works 25 hours in 2026. The lawful youth wage is 85% of $13.73 = $11.67/hr. Required gross = 25 × $11.67 = $291.75. If paid $291.75, shortfall = $0.00.
4. Common Misconceptions About Michigan Minimum Wage
- Misconception 1: "Detroit or Ann Arbor can set a higher city minimum wage."
Michigan law (MCL 123.1385, the Local Government Labor Regulatory Limitation Act) explicitly preempts local units of government from enacting local minimum wage ordinances. Michigan enforces a uniform single statewide rate. - Misconception 2: "The $4.25 training wage can continue indefinitely."
MCL 408.934b(2) strictly restricts the $4.25 rate to the employee's first 90 calendar days. On day 91, the employee must immediately transition to the full adult minimum wage (or 85% youth rate if aged 16–17). - Misconception 3: "Solo proprietors with one helper must pay $13.73."
Employers with only 1 worker are exempt from state coverage under MCL 408.932(d). However, federal FLSA standards ($7.25) still govern if interstate commerce is engaged.
5. Official Regulatory Authorities & Citations
- Statutory Authority: MCL 408.931–408.945 – Improved Workforce Opportunity Wage Act.
- Amendatory Act: 2025 Public Act 1 (effective February 21, 2025).
- Supreme Court Authority: Mothering Justice v. Attorney General, 514 Mich. 256 (2024).
- Enforcement Agency: Michigan Department of Labor and Economic Opportunity (LEO), Wage and Hour Division.
- Local Preemption: MCL 123.1385 – Local Government Labor Regulatory Limitation Act.