A judge on the Court of Claims threw out changes made late in 2018 as Republican Gov. Rick Snyder was near the end of his term and Democrats were preparing to take over top statewide posts.
Advocates had turned in enough signatures to raise the minimum wage to $12 an hour by 2022 and eventually eliminate a lower tipped wage in the restaurant industry. The minimum wage now is $9.87 per hour; less for tipped workers.
There was also a successful petition drive to expand sick leave opportunities.
The Legislature adopted both in 2018 -- a possible step -- instead of letting voters have their say. But lawmakers then returned a few months later and watered them down by a simple majority vote.
"It could not amend the laws within the same legislative session," Judge Douglas Shapiro said. "To hold otherwise would effectively thwart the power of the people to initiate laws and then vote on those same laws -- a power expressly reserved to the people in the Michigan Constitution."
Ron Bieber, president of the Michigan AFL-CIO, said the decision was a "huge victory" for working families.
Appeals are likely. Wendy Block of the Michigan Chamber of Commerce said businesses could suffer with the sudden changes.
"The talent shortage has employers already paying historic wages and benefits -- all while facing rising inflation and supply chain chaos -- just to keep the doors open," Block said.