Ask the Lawyer, CAUTION: WAGE HIKE AHEAD!
CAUTION: WAGE HIKE AHEAD!
QUESTION: I run a company, with a pretty small profit margin. I pay my worker’s minimum wage; the amount I spend on wages just keeps rising. I heard the minimum wage is going to go up again pretty soon. When is that going to happen, and how much will it be? And, is there any way to get out of paying it?
ANSWER: If you feel like you’re paying your workers more than you did a few years ago, you are. In 2014, the minimum rate was just $7.40 an hour; in 2017 that figure rose to $8.90 per hour. Starting in January 2018, you can expect to pay a minimum wage of $9.25 per hour to your workers. Workers under age 18 can be paid a reduced rate of 85 percent of the minimum, or $7.86 an hour in 2018.
The increase is courtesy of the Workforce Opportunity Wage Act, 2014 PA 138, which passed in 2014. The first phase of minimum wage increases ends with the 2018 increase. Beginning in January 2019 – and every January after that – the minimum wage will be adjusted by an amount reflecting “the average annual percentage change in the consumer price index for the most recent 5-year period for which data are available.” In the last few years, the CPI has been, on average, less than 2 percent.
The minimum wage applies to employers who employ “two or more persons 16 years of age or older.” If your workers are under 16, you’re off the hook for the new hourly rate (but young workers are limited to no more than 48 hours per week, combined, of school and work and work is only permitted outside school hours). You also need to keep track of your workers’ hours– both Michigan and federal law require workers to get time-and-a-half for hours over 40 in one week.
If you are starting a new business, you may want to consult a lawyer, to make sure you understand federal and state requirements.
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GWINN TAURIAINEN PLLC, is a Troy based law firm representing clients from Warren, Sterling Heights, Ferndale, Royal Oak, Oak Park, Oakland and Wayne Counties and all of Southeast Michigan
ASK THE LAWYER
By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN TAURIAINEN PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3310 facsimile