On February 21, 2025, Governor Gretchen Whitmer signed legislation that preserves Michigan’s tip credit and scales back an increase to the state’s minimum wage. On Wednesday, February 19, 2025, just days before this legislation and the new Earned Sick Time Act (ESTA) were set to take effect, amendments to the minimum wage law received final approval from both the House and Senate. As a result, this afternoon, Governor Whitmer signed both pieces of legislation into law. For more information about changes to ESTA, see Varnum’s advisory here.

Under the amendments to the minimum wage law, the new minimum hourly wage rate is:

Hourly Rate	Effective Date
$12.48	February 21, 2025
$13.73	January 1, 2026
$15.00	January 1, 2027

The new minimum hourly wage rate for tipped employees is:

Hourly Wage Rate	Effective Date
38% of the minimum hourly wage rate	February 21, 2025
40% of the minimum hourly wage rate	January 1, 2026
42% of the minimum hourly wage rate	January 1, 2027
44% of the minimum hourly wage rate	January 1, 2028
46% of the minimum hourly wage rate	January 1, 2029
48% of the minimum hourly wage rate	January 1, 2030
50% of the minimum hourly wage rate	January 1, 2031

The bill also stipulates that beginning in October 2027, the state’s minimum wage must increase based on the rate of inflation. The state treasurer will calculate the increase by multiplying the otherwise applicable minimum wage...

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