Detroit City Wire

State Treasurer Rachael Eubanks is seeking guidance from the Department of Attorney General on the adopt and amend Supreme Court ruling, which requires her agency to calculate an inflation-adjusted minimum wage. This follows a presentation with the Detroit Regional Chamber on Tuesday.

The adopt and amend ruling, decided last month, held that the Legislature cannot adopt and later amend voter-initiated laws in the same session. This led to the reinstatement of a law calling for an increase in Michigan’s minimum wage to $12 per hour by 2022 and bringing tipped minimum wage up to the regular minimum wage.

The court decision now necessitates a revised schedule for phasing in minimum wage increases to account for inflation and the years that have passed since the original law was supposed to take effect. The current minimum wage stands at $10.33 for non-tipped workers and $3.93 for tipped workers.

Eubanks mentioned that although the court requires Treasury to implement these changes by November, her department is looking for clarification from the attorney general on “a technical standing” regarding what the wording in the court decision means in order to determine a calculation as intended by the court.

She indicated that her department is not yet close to determining an actual number or rate needed to comply with these changes.

Regarding revenue implications for the state, Eubanks stated that her department is still analyzing calculations within the instructions of the court decision. They plan to evaluate its effects on Michigan's economy overall during January's Consensus Revenue Estimating Conference.

“Right now, I’m keeping an open mind about it,” Eubanks said. “Could it be no impact? Could it be an increase? Could it be a decrease? It’s too soon to say.”

Eubanks highlighted potential impacts on both sides: as an employer and through increased withholdings.

Budget Director Jen Flood said initial estimates show that the impact on the state as an employer will be “minimal.”

Flood added that they are working with the Department of Labor and Economic Opportunity on enforcing this distribution of changing minimum wages and assisting employers with navigating complex policies.

“The administration’s take is, how do we support employers through this transition?” Flood said.