Michigan minimum wage 2027, in one line: $15.00 an hour from January 1, up from $13.73 today, under Public Act 1 of 2025. The tipped rate rises to $6.30. For a Michigan service business the date that matters is not January 1 but today: every quote, service agreement and seasonal contract you sign this autumn for work done after New Year is priced on labour that will cost $1.27 an hour more per minimum-wage employee, plus the employer's payroll tax on it. On a full-time employee that is $2,843.68 a year. From 2028 the rate moves with inflation, and nobody will know the 2028 figure until November 1, 2027, which is why an agreement that runs into 2028 needs a clause for it.
In short
- The Michigan minimum wage is $15.00 from January 1, 2027, up $1.27 (9.25%) from $13.73 (Public Act 1 of 2025).
- The tipped rate is 42% of the minimum, $6.30, rising to 50% by 2031.
- A full-time employee at the minimum costs $2,843.68 more a year, wages plus the employer's 7.65% Social Security and Medicare share.
- From 2028, the rate follows Midwest inflation; the figure is published by November 1 of the year before.
Michigan minimum wage 2027: the rates in the statute
The schedule is written into the act, not left to a board. Section 4 reads: "Beginning January 1, 2026, $13.73. Beginning January 1, 2027, $15.00." The Department of Labor and Economic Opportunity's minimum wage page states the same two dates and rates. The act covers an employer "that employs 2 or more employees at any 1 time within a calendar year," and an employee "not less than 16 years of age."
| Rate | 2026 | 2027 | Change |
|---|---|---|---|
| Standard minimum wage | $13.73 | $15.00 | +$1.27 |
| Tipped employee (40% in 2026, 42% in 2027) | $5.49 | $6.30 | +$0.81 |
| Full-time year at the minimum (2,080 hours) | $28,558.40 | $31,200.00 | +$2,641.60 |
| Same year with employer Social Security and Medicare (7.65%) | $30,743.12 | $33,586.80 | +$2,843.68 |
The 7.65% is the employer's share the IRS sets out in Topic 751: 6.2% for Social Security and 1.45% for Medicare. Unemployment insurance and workers' compensation premiums come on top and vary by business, so they are left out of the table.
The same 2025 law changed the Earned Sick Time Act. Littler's summary sets out the accrual as "one hour of leave for every 30 hours worked," with a 40-hour annual use cap for businesses with 10 or fewer employees and 72 hours for larger ones. Small businesses have been covered since October 1, 2025.
Why a quote signed now is already a 2027 price
Service businesses sell in autumn and do the work in winter and spring. Annual maintenance agreements, snow contracts, spring landscape bookings and remodels quoted in October all run past January 1. The labour in those prices was usually costed at this year's rate, often from a price book nobody has opened since the last increase.
Per job, the change is small. A job with 40 labour hours by minimum-wage helpers costs $50.80 more in wages and $54.69 with the employer's payroll tax. Per year, it is not small: five full-time helpers at the minimum is $14,218.40 more. The yearly figure arrives through a hundred quotes that each looked fine on their own.
Six steps before the end of the year
- List everyone paid under $15.00 today. Include part-time and seasonal staff and anyone on the tipped rate.
- Put the change in your own numbers. Multiply each person's hours by $1.27 (or by the gap between their pay and $15.00), then add 7.65%. That is the floor of the increase, before any raise you choose to give.
- Reprice the labour line in your price book now. Any quote that will be performed after January 1, 2027 should carry the 2027 rate. Quotes already signed are what they are; quotes going out next week are not.
- Decide what happens just above $15.00. A lead hand at $15.50 today will be 50 cents above a new helper in January. Whether you move that pay is a business decision, but make it before the schedule is built, not after someone asks.
- Check the tipped-rate paperwork if you use it. Section 4d allows the $6.30 rate only when tips make up the difference, the employee keeps the tips, and the employer "informed the employee of the provisions of this section, in writing, at or before the time of hire, and the employee gave written consent."
- Add a wage clause to anything that runs into 2028. From October 2027 the state treasurer calculates a new rate from the Midwest consumer price index and publishes it by November 1; it takes effect the following January 1. A two-year service agreement signed this autumn will cross that date.
The mistake most owners make at step 6
They assume $15.00 is the ceiling. The act makes it a starting point. Section 4(2) says that "every October beginning in October, 2027, the state treasurer shall calculate an adjusted minimum wage rate" by the 12-month increase in the Midwest CPI-U, and Section 4(3) skips the increase only if Michigan's unemployment rate was 8.5% or higher in the preceding year. A price fixed for three years is a bet that inflation stays at zero. A clause that ties the labour line to the published rate, reviewed by whoever drafts your agreements, removes the bet.
The penalty for getting the rate itself wrong is set out too. Under Section 9, an affected employee "at any time within 3 years" may sue for the unpaid difference "and an equal additional amount as liquidated damages," with costs and attorney fees.
What we build for this
Among the services we build is quote and proposal automation: quotes and proposals assembled from your own price book, on your own template, sent for signature and followed up until they are signed or declined. It never sets a price; you do. Its use here is plain: when the labour rate changes on January 1, it is changed in one place, and every quote after that carries it.
The rate changes on New Year's Day. The quotes that pay for it are going out this month.
