Federal & State Regulations | Tips - Michigan | J. J. Keller® Compliance Network

State Info

Summary of difference between federal and state regulations

There are certain instances where employers can pay employees at a rate lower than the minimum hourly wage specified by the Fair Labor Standards Act. The most common instance pertains to an employee who earns tips. The employer can deduct the amount of the tips (but only up to a certain maximum amount) from the hourly wage.

Beginning September 1, 2014, the hourly rate paid to tipped employees must be at least 38 percent of the state minimum wage. At the minimum wage of $8.15 effective that date, the rate for tipped employees must be at least $3.10. As the minimum wage increases each year starting January 1, 2016, the tipped minimum wage will increase proportionally.