Paychecks at the bottom of Michigan’s wage scale started 2026 with a jump that many workers will feel right away.
Effective January 1, 2026, the state’s minimum wage rose from $12.48 to $13.73 an hour, a $1.25 increase that applies across industries where the state minimum wage law covers employees.
The same Jan. 1 change also moved the related wage tiers that shape who benefits and by how much. The 85% rate for 16- and 17-year-old workers increased from $10.60 to $11.67 an hour, keeping teen workers below the adult minimum while still rising on the same schedule. The training wage stayed $4.25 an hour for newly hired employees under 20 during their first 90 calendar days on the job.
Tipping remains the most contested part of Michigan’s minimum wage policy.
Michigan’s tipped minimum wage increased to $5.49 an hour, set at 40% of the full minimum wage, under the state’s current phase-in plan. That base hourly rate only applies if the employee’s tips make up the difference to reach the full minimum wage. State guidance describes the threshold this way: the tipped rate applies provided the employee receives at least $8.24 in tips, which would bring the combined hourly amount to the full $13.73.
Michigan’s minimum wage trajectory has been shaped by years of legal and legislative conflict tied to a 2018 citizen-led effort to raise the minimum wage to $15 and end the lower wage for tipped workers. After a Michigan Supreme Court ruling faulted how lawmakers handled that earlier initiative, state leaders moved again in early 2025. The result was a bipartisan compromise signed by Gov. Gretchen Whitmer that set a clearer schedule: $13.73 in 2026, $15.00 in 2027, and inflation-linked increases after that.
That compromise narrowed what tipped workers would have received under a faster, court-driven path, and it landed hard in communities where tipped work is a major slice of the local economy. Metro Detroit’s restaurant, hospitality, and service workforce includes thousands of workers whose weekly income depends on the tip-credit system working exactly as intended. When tips fall short, the law requires employers to make up the difference so pay reaches the full minimum wage. When workers say they do not see that “make-whole” happening consistently, wage policy turns into a kitchen-table issue fast.
Advocates have made clear they are not done. The change in law angered worker groups who wanted one wage floor for everyone, and organizers launched a petition drive aimed at putting the tipped-wage question back to voters, seeking a path that would move tipped workers to the same minimum wage on a set timeline. It’s been reported that advocates were pushing an initiative that would give tipped workers the same minimum wage by 2030.
Employers and business groups, including many in the small-business restaurant world, have argued that steep increases in the tipped base wage could push menu prices higher, squeeze staffing, and make it harder for independent spots to stay open. Worker advocates respond that tips are too volatile to function as a reliable wage policy, and that a separate tipped wage can invite uneven enforcement, unpredictable earnings, and—at the extremes—wage theft.
For workers and employers trying to comply today, the practical takeaway is straightforward. The floor is $13.73 for most covered workers as of January 1, 2026. Teen and training wages follow their own rules. Tipped wages remain lower on paper, with strict conditions attached.
Michigan’s wage debate often gets reduced to numbers, yet the lived reality is rent, groceries, DTE, childcare, car insurance, and the price of simply being able to show up to work every day. The Jan. 1 bump raises the floor. The next fight is about who still has to stand beneath it.
