Michigan Minimum Wage to Rise in 2026: Here’s Why

Michigan is set to increase its minimum wage from $12.48 to $13.73 an hour, beginning January 1, 2026. This change is part of a new state law aimed at raising the base wage rate while adjusting provisions for tipped workers.

Details of the Minimum Wage Increase in Michigan

The minimum wage increase stems from a legislative decision earlier this year to amend a ballot measure that was reinstated in court. The following key points outline the changes:

• The minimum wage for most workers will rise to $13.73 on January 1, 2026.
• The sub-minimum wage for tipped workers will increase from $4.74 to $5.49.
• The planned wage for minors will also see an increase from $10.61 to $11.67 per hour.
• The minimum wage is projected to reach $15 per hour by 2027 and will be adjusted according to inflation thereafter.
• The tipped wage is expected to reach 50% of the minimum wage by 2031.

Impact on Tipped Workers and Businesses

While this increase benefits Michigan’s lowest-paid workers, it raises concerns among businesses, particularly in the restaurant sector. Many restaurant owners are apprehensive about the effects of these wage adjustments on their operations.

Justin Winslow, President of the Michigan Restaurant and Lodging Association, remarked on the struggle faced by restaurants due to declining customer traffic and rising costs. He noted the necessity for businesses to find ways to balance their labor costs amidst these wage hikes.

Public Sentiment and Market Response

Some business leaders, like Steven Dyme from Flowers for Dreams, express the need for higher wages in response to rising living costs. Dyme, operating in major cities like Chicago, Detroit, and Milwaukee, believes increased wages are essential for addressing the affordability gap for workers.

The Legal and Legislative Journey

The road to achieving these wage increases has been fraught with challenges. It began in 2018 as a citizen-led initiative aimed at raising the minimum wage to $15 an hour and eliminating the sub-minimum wage for tipped workers. Although the necessary signatures were collected, state lawmakers quickly amended the measure, leading to protracted legal battles.

In 2024, the Michigan Supreme Court ruled that the state Legislature had violated the constitution by amending the initiated legislation within the same term. This ruling mandated wage and sick leave increases. Despite opposition from lobby groups, lawmakers reached a bipartisan agreement in February 2025 to expedite minimum wage increases while maintaining the sub-minimum wage for tipped workers.

The new sick leave policies also took shape, requiring small businesses to provide five days of paid leave for staff and larger firms to offer nine days.

Conclusion

The upcoming changes to Michigan’s minimum wage are poised to impact the state’s workforce significantly. As workers prepare for higher wages and businesses adjust to new costs, the conversation surrounding wage equality and sustainability continues to unfold across the state.