The COVID-19 pandemic is set to hit workers in another way, as a scheduled minimum wage hike is unlikely to go into effect on Jan. 1.
The rate was supposed to rise from $9.65 per hour to $9.87, but that’s unlikely to happen, the Michigan Bureau of Employment Relations, Wage and Hour Division said last week.
Why is that? In 2018, there were two citizen-led petition drives that received enough signatures to go on the ballot: one mandating sick leave for workers and another raising the minimum wage to $12 per hour.
The GOP-led Legislature adopted both measures in the summer, thus preventing them from going on the ballot. But after the November general election, Republicans introduced new legislation backed by most business groups to water down both measures, which was passed and signed by then-Gov. Rick Snyder, a Republican.
Under the new law, the Improved Workforce Opportunity Wage Act of 2018, scheduled minimum wage increases aren’t permitted when the state’s annual unemployment rate for the preceding calendar year is above 8.5%.
The state’s 2020 annual unemployment rate, which is determined by the Bureau of Labor Statistics (BLS), U.S. Dept. of Labor, is calculated by using both average labor force and unemployment levels for January through December.
Thanks to the COVID-19 pandemic, the rate is expected to break 8.5%. While Michigan’s October unemployment rate continued its downward trend and was 5.5%, the annual average from January through October currently sits at 10.2%. Officials said it’s “highly unlikely” to dip below the 8.5% threshold when BLS releases the final 2020 unemployment numbers for Michigan.
If, as expected, the annual unemployment rate does not fall below 8.5%, then effective Jan. 1:
- Michigan’s minimum wage will remain at $9.65 an hour.
- The 85% rate for minors age 16 and 17 remains $8.20 an hour.
- Tipped employees rates of pay remains $3.67 an hour.
- The training wage of $4.25 an hour for newly hired employees age 16 and 17 for their first 90 days of employment remains unchanged.
Michigan’s minimum wage rate could next increase to $9.87 on Jan. 1, 2022.