Michigan's minimum wage will go up in January increasing the mandated hourly rate by a $1.25.
Starting Jan. 1, 2026:
- The minimum hourly rate will increase from $12.48 to $13.73 an hour.
- The rate for minors (16-17 year-olds) will increase from $10.48 to $11.67 per hour.
- The minimum rate for tipped employees will increase to $5.49 an hour, which is 40% of the full minimum wage (provided they make at least $8.24 in tips)
According to a state press release, the rate is set by the Improved Workforce Opportunity Wage Act which was signed into law in 2018. The goal of the legislation was to periodically raise the minimum wage until it reaches $15 an hour.
A study conducted by the University of Michigan in 2024 found raising the minimum wage on a scheduled timeline poses little risk to small businesses while raising the earnings of low income workers.
Independent businesses are typically able to adapt to minimum wage increases, but smaller businesses, particularly restaurants, can sometimes take a hit from the raises if they were already struggling, the study found.
The study also says minimum wage hikes have little to no effect on employment rates, but do increase employee retention.
The final scheduled increase will be implemented in 2027, bringing Michigan's minimum wage up to $15 an hour.
