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Michigan's new minimum wage in a nutshell: What business owners need to know

As of January 1, Michigan's minimum wage has increased to $8.90 an hour, up from $8.50 an hour. The following Q&A addresses what the change means for business owners.

Is this a new law?

No. The minimum wage increase was established by a 2014 Michigan law that is gradually raising the minimum wage. The final scheduled increase will occur next year, when the minimum raise reaches $9.25 an hour.

What happens after 2018?

After the 2018 increase, the law requires the state treasurer to keep adjusting the state's minimum wage to keep up with inflation, as measured by the consumer price index.

Who does the law apply to?

Michigan's law applies to any employer with two or more employees age 16 or older. 

The law allows employers to pay 16- and 17-year-olds only 85 percent of the minimum wage, which now works out to $7.57 an hour.

Employees who receive tips must be paid at least 38 percent of the minimum wage, as long as tips make their hourly earnings at least equal to the minimum wage - otherwise, employers need to make up the difference.

How does this compare to other states?

Michigan is hardly alone in raising its minimum wage above the federal minimum of $7.25 an hour - more than half the states have done the same. The highest statewide minimum wages at the moment are in Massachusetts and Washington, at $11 an hour.

The Associated Press recently reported that 19 states are increasing their minimum wage this year. Though not everyone is happy about the increases, there's plenty of pressure to keep minimum wages climbing. Groups across the country are continuing to push for a $15 minimum wage, which some cities have already implemented.

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