Michigan plans $14.97 minimum wage by 2028 — but seeks court clarity first

• Michigan lays out ‘intended’ plan to raise minimum wage but asks state Supreme Court for clarity on earlier ruling 
• Michigan Supreme Court ordered wage raises after striking down a 2018 maneuver to adopt and quickly amend a citizen initiative
• Attorney General Dana Nessel seeks further court instructions by Sept. 15

LANSING — Michigan intends to raise its minimum wage to $12.48 in 2025 and $14.97 by 2028 but is seeking clarity from the state Supreme Court before proceeding. 

That’s according to a Wednesday filing by the state treasury and labor departments, which is asking justices to further explain by Sept. 15 their earlier blockbuster ruling requiring wage increases that account for inflation. 

“Given the unprecedented situation … the state, employers, and employees all need clear guidance from this court on the proper methodology,” Attorney General Dana Nessel’s office wrote in the motion.

The Supreme Court in July ruled that a Republican-led legislature erred in 2018 when it adopted and subsequently modified a citizen initiative to raise Michigan’s minimum wage and eliminate the state’s tipping wage — currently $3.93 per hour — during the same legislative session. 

In that decision, justices also ruled the state must implement “a remedy that links wage increases to the same annual schedule as proposed” but accounting for inflation. The 2018 initiative initially called for a $10 minimum wage, but the court noted that “is not the same as $10 in 2024.” 

Related:

• What to know about Michigan’s pending minimum wage changes
• Michigan minimum wage to rise, tipped wage to disappear, under blockbuster ruling
• Michigan minimum wage increase is ‘nightmare’ for restaurants, industry says

Questions over what inflation adjustment to use has left state officials scrambling in recent weeks, however, leading Nessel’s office to ask for “clarity as to how the court’s remedy should be implemented” on behalf of the state Treasury and Department of Labor and Economic Opportunity.

If Gov. Gretchen Whitmer’s administration follows its own interpretation of the ruling, as outlined Wednesday, Michigan’s hourly minimum wage of $10.33 would rise to $12.48 in 2025, $13.29 by 2026, $14.16 by 2027 and $14.97 in 2028.

The court order required the state to adjust for inflation with “the end date of July 31” but “did not clearly” provide a beginning date for the calculation, attorneys in Nessel’s office wrote in the Wednesday filing. 

That left the state with several possible interpretations for how to adjust wages for 2025 through 2028. Among them? Starting that calculation at Jan. 1, 2019, and adjusting for inflation through July 31 — the date of the court’s initial decision.

That’s a starting point the Treasury Department feels is correct, according to the request, which notes Michigan’s labor department will “begin preparing to implement the law” in that fashion on Sept. 16 unless directed otherwise.

Under the state’s interpretation of the ruling, wages would increase by just under a dollar year over year.

Wednesday’s filing also outlined four additional possible interpretations for implementation but noted that Treasury officials do not consider any of them a “proper approach” to executing the ruling.

Nessel’s office also raised other lingering questions about the ruling, including when to even begin the wage increases. That typically begins Jan. 1 of each year, but the court’s decision calls for beginning wage increases on Feb. 21.

There is also some ambiguity about phasing out Michigan’s lower minimum wage for tipped workers, which the court previously ruled should be eliminated over the next four years, state attorneys wrote Wednesday.

But even with clarity from the court, concern surrounding implementation of the proposal altogether is expected to continue. 

Business and restaurant groups have largely railed against eliminating Michigan’s tipped wage system, referring to the court ruling as a “nightmare” while calling for some form of legislative action.

It’s not yet clear how or if the Legislature will act. Majority Democrats have remained tight-lipped on any potential changes to the incoming law, other than to say leadership is still reviewing options.

“I’m not going to push my legal team to tell me before they’re ready to have the chance to really look at it all,” Whitmer told reporters following a press conference earlier this month. 

Lawmakers are currently on their regularly scheduled summer break, with tentative plans to return to the Capitol Sept. 11.

In the interim, at least one at least one legislator is proposing a new plan to blunt the impact of the Supreme Court’s decision.

State Sen. Thomas Albert, R-Lowell, on Thursday introduced legislation he said would increase the minimum wage to $12.05 by 2030, keep the tipped wage at 38% of the full rate and exempt businesses with fewer than 50 employees from new paid sick leave rules. 

The legal battle to raise Michigan’s minimum wage began roughly six years ago, when political organization One Fair Wage’s proposal to eliminate Michigan’s tipped minimum wage was passed by the Republican-led legislature before it could reach the ballot. 

Legislators quickly modified the new laws amid pressure from business groups and the restaurant industry, significantly paring down the plan. 

They extended the timeline for increasing the minimum wage above $12 to 2030 and kept the lower tipped minimum wage in place.