Goes Into Effect January 1, 2018
The new rate effective January 1, 2018 is $9.25 per hour.
Employees who regularly receive tips may be paid $3.52 per hour as long as that person is claiming at least $5.73 in tips per hour.
The law allows an employer to pay a newly hired employee age 16 to 19 $4.25 per hour for the first 90 days of employment.
The law also allows a Michigan employer to pay employee’s aged 16-18 $7.86 per hour after the first 90 days and $7.25 if your sales are less than $500,000.
Overtime rates for tipped employees are calculated as follows:
Amount you are paying the tipped employee: $4.00
Amount to meet minimum wage: $5.25 ($9.25-4.00)
Minimum times 1.5: $13.88 ($9.25 X 1.5)
Tipped minimum: $8.63 ($13.88 – $5.25)
Kallas payroll service will make the changes automatically on your payroll but we ask that you keep an eye on it the first or second payroll in 2018 because there are always exceptions that could cause an error; especially for employees with multiple rates of pay.
If your pay period includes January 1, 2018, the law allows you to pay the lower rate through December 31. If you choose to do this we ask that you let us know ahead of time as those adjustments will take time and are not automatic. If you choose not to split the payroll into two minimum wage rates, the new rate will be included for the entire payroll ending at the beginning of January.