4 Key Changes to Know About Michigan’s Minimum Wage Increase on Jan. 1

As 2026 begins, workers across Michigan are bracing for a bigger paycheck.

From local diners in downtown Lansing to retailers statewide, a significant change is coming right on January 1.

This marks the next phase of a multi-year plan to boost wages, and it impacts nearly everyone.

Here are the four essential things you need to know about the upcoming Michigan minimum wage increase.

1. The New Wage Rates

The state’s standard minimum wage will officially jump to $13.73 an hour.

This is a notable increase from the current rate and is designed to help wages keep pace with the cost of living.

Tipped employees will also see their base pay rise to $5.49 an hour, though employers must ensure tips cover the gap to the full minimum wage.

Additionally, the rate for minors aged 16 and 17 will increase to $11.67 an hour.

2. The Law Behind the Change

These adjustments are not arbitrary; they are mandated by the Improved Workforce Opportunity Wage Act.

This legislation was the result of a contentious political battle and a major compromise in the state legislature.

The act was created to prevent a more drastic overhaul of the system for tipped workers while still ensuring a path toward a higher statewide minimum wage.

3. The Ongoing Tipped Wage Debate

The conversation around wages for Michigan's tipped workers remains heated.

Many restaurant owners and service industry veterans argued that eliminating the tipped wage credit would cripple small businesses with higher labor costs.

Conversely, labor advocates contended that it would provide a more stable and predictable income for servers and bartenders.

The resulting compromise was a sharp rebuke to the initial ballot initiative that sought to end the subminimum wage system entirely.

4. More Increases Are on the Horizon

This January 1 increase is not the final step.

The law establishes a clear path for the minimum wage to reach $15 an hour by 2027.

After that, future increases will be tied directly to inflation, creating an automatic adjustment mechanism.

This plan is intended to prevent wages from stagnating in the future, a major victory for labor advocates in Michigan.

FAQ: Michigan's Minimum Wage

What will Michigan's new minimum wage be on January 1?

The standard minimum wage in Michigan will increase to $13.73 per hour starting January 1, 2026.

How does the wage increase affect tipped restaurant workers?

Tipped workers will see their base pay increase to $5.49 per hour. Employers must ensure that wages plus tips equal at least the full minimum wage of $13.73 per hour.

Is this the last minimum wage increase for Michigan?

No, the wage is scheduled to increase incrementally until it reaches $15 per hour in 2027, after which it will be adjusted annually based on inflation.