Barring an unprecedented increase in employment rates before December 31, 2020, a failsafe will keep Michigan's minimum wage from increasing as planned in 2021.

The Michigan Bureau of Employment Relations, Wage and Hour Division announced earlier that the state’s scheduled minimum wage increase is not expected to go into effect on Jan. 1, 2021.

A failsafe built into Michigan’s Improved Workforce Opportunity Wage Act of 2018 prohibits scheduled minimum wage increases when the state’s annual unemployment rate for the preceding calendar year is above 8.5 percent. Michigan recorded a jobless rate of 8.6 percent in the third quarter of 2020, which was 11.4 percentage points below the second-quarter rate of 20.0 percent. This reflected people recalled to jobs after the substantial pandemic-related layoffs in April.

State regulators say they doubt the annual rate will fall by December 31, 2020. The U.S. Bureau of Labor and Statistics will calculate Michigan’s final annual unemployment rate. With no increase in 2021, most Michigan workers earning minimum wage will earn around $9.65. That does not take into account those working minimum wage as tipped employees. A waiter or waitress in Michigan makes $3.67 hourly, not factoring in tips or gratuities.

The next minimum wage increase to $9.87 for hourly employees will occur following the next calendar year when and if the annual unemployment rate is less than 8.5 percent. Tipped employees would see their hourly wage increased to $3.75 once the employment numbers fall below 8.5 percent.

Read the latest Michigan Unemployment Rate Report in its entirety by clicking here. 

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