Michigan’s Supreme Court Clarifies Its Mothering Justice Opinion and Sets State’s Minimum Wage Increases and Tip Credit Phaseout

Quick Hits

• The Michigan Supreme Court issued an order mandating specific wage increases and gradually eliminating the tip credit by 2030.
• The new wage and tip credit adjustments take effect on February 21, 2025.
• The Michigan Legislature has introduced a bill that, if enacted, will scale back the scheduled wage increases while preserving the tip credit.

In its September 18, 2024, order in Mothering Justice v. Attorney General, the Michigan Supreme Court confirmed the dates and inflation-based calculations for the minimum wage increases and corresponding gradual elimination of the tip credit, which will begin on February 21, 2025. The September 18 order also clarified that the tip credit would be eliminated by 2030, not 2029, as stated in the court’s original July 31, 2024, ruling.

Based on the court’s order, the minimum wage increases and tip credit reductions will be implemented according to the following schedule:

Original Year	Original Minimum Wage	Adjustment Value	New Year	New Minimum Wage	Tipped Workers’ Minimum Wage
2019	$10.00	1.24752	February 21, 2025	$12.48	48% of minimum wage
2020	$10.65	1.24752	February 21, 2026	$13.29	60% of minimum wage
2021	$11.35	1.24752	February 21, 2027	$14.16	70% of minimum wage
2022	$12.00	1.24752	February 21, 2028	$14.97	80% of minimum wage
			February 21, 2029	$14.97 + CPI	90% of minimum wage
			February 21, 2030	2029 Minimum Wage + CPI	100% of minimum wage (No tip credit)

With the deadline approaching on February 21, 2025, the Michigan Legislature has introduced a bill (Senate Bill No. 991) that, if enacted, will scale back the newly scheduled wage increases while preserving the tip credit. SB 991 was referred to the Senate Committee on Labor on September 11, 2024.

The Michigan Supreme Court’s September 18, 2024, order did not address the portion of its July 31, 2024, decision that reinstated the Earned Sick Time Act (ESTA). Although lawmakers have yet to introduce a bill to address the ESTA, the Michigan Department of Labor and Economic Opportunity has published answers to frequently asked questions outlining how the state intends to interpret and enforce the ESTA.

Ogletree Deakins’ Detroit (Metro) office will continue to monitor developments and will provide updates on the Hospitality, Leaves of Absence, Michigan, and Wage and Hour blogs as additional information becomes available.

Additionally, the Ogletree Deakins Client Portal provides subscribers with timely updates on wage and hour laws, including the Michigan minimum wage developments. Our updated Minimum Wage and Minimum Wage Tip Credit law summaries contain state and major locality current minimum wage and tip credit rates and future minimum wage and tip credit rates that those jurisdictions have published and/or announced. (Full law summaries are available for Premium-level subscribers; Snapshots and Updates are available for all registered client-users.) For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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