Michigan minimum wage is rising on Jan. 1 thanks to new state law

LANSING, Mich. (FOX 2) - As the confetti falls on New Year's, a new law goes into effect impacting businesses everywhere, including restaurants.

Big picture view:

On Jan 1, the minimum wage is rising from $12.48 an hour to $13.73, a full dollar and change. The goal is to get to $15.00 an hour, set for January 2027. Tipped worker wages will also increase 40%. The increase stems from the 2018 "Improved Workforce Opportunity Wage Act."

This all impacts small businesses like restaurants and coffee shops.

Meanwhile, Star of India owner Razzak Raju says he hopes small businesses will survive this.

"Everything is expensive nowadays," he said. "Like, when we go for the shopping. Like the groceries, napkins, even a knife sharpener, they increase the prices as well. So we got to think about it. Lots of small businesses, they might not be able to carry this kind of expense."

What they're saying:

FOX 2 reached out to the Michigan Restaurant & Lodging Association. They provided this statement:

"The minimum wage taking effect January 1 will hit restaurant operators with a 30% increase in the standard minimum wage and a 37% increase in the tipped minimum wage from last January, while restaurant industry revenue is projected to be flat in 2026. For many, the reality is setting in that they will be forced to either cut labor or raise menu prices to keep their doors open, knowing full well that affordability is the number one concern on the mind of most consumers right now."

What's next:

This impacts employers with two or more workers, and again, the goal is to get to $15 in 2027.

For additional information on laws going to take effect in 2026, you can tap here. 

For a complete list of Michigan laws, go HERE for the state legislature's page.