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Don’t make the mistake of paying the wrong minimum wage

On Behalf of | Apr 8, 2020 | Business Law |

The federal government has a minimum wage set by law. That figure represents the lowest possible rate that employers can pay their workers in any state in this country. That rate was recently increased to $9.65 for most residents at the beginning of this year. There are a few different types of workers that you don’t have to pay this much though.

The minimum hourly wage in Michigan is currently $9.65. It’s slated to increase to $9.87 on Jan. 1, 2021. This rate increase may not actually happen, however. Whether it does go up is largely contingent upon what Michigan’s unemployment rate is by year’s end. If it’s 8.5% or higher, then it won’t happen.

Tipped workers here in Michigan, on the other hand, aren’t paid the state minimum wage that other employees receive because they are each allotted an “average” hourly tip rate. For example, these types of employees currently get paid $3.67 per hour and are assumed to receive $5.98 in tips on average each hour that they work. On Jan. 1, 2021, the tipped employee rate will increases to $3.75 (assuming that the regular minimum wage increases).

Workers between the ages of 16 and 19 can lawfully be paid at a rate that’s lower than the state minimum wage. Those employees ages 16 to 17 only have to be paid 85% of the current rate, or $8.20 per hour. Plus, newly hired workers between the ages of 16 and 19 may only be entitled to an hourly rate of $4.25 for any training hours that they work.

As with any regulations, there are always exceptions to the rule. Some workers may be entitled to hourly pay that either falls below or comes in higher than the state minimum wage rate depending on the sector that they work in. A business law attorney can help you handle a full range of legal needs including any employment concerns so that you keep your company’s liability risk low.


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