Yes, Michigan allows employers to require overtime work. However, they must follow applicable overtime laws and rates if the employee is not exempt from overtime rules. Mandatory overtime does not change an employee’s status from exempt to nonexempt. Compensatory time (comp time) can be offered if the employee voluntarily agrees before working the overtime, and it must accrue at overtime rates (time and a half of the time worked).
Michigan Labor Laws
Michigan Minimum Wage
As of January 1, 2020, Michigan’s state minimum wage is $9.65 per hour. An increase to $9.87 per hour is scheduled for 2021, contingent on the state unemployment rate falling below 8.5%.
Michigan Labor Law Posters
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History of Michigan Labor Laws
Michigan has a long history of labor laws and strong support for labor unions.
In 1947, Michigan’s Public Employment Relations Act required employees to join any union present at their workplace. This mandatory union membership was changed in 2013 with the introduction of freedom to work laws, making Michigan a modified right-to-work state. Police officers and firefighters were exempt from these new laws.
Following this transition, several significant labor law changes occurred:
- In 2018, Michigan repealed its Prevailing Wage Law, which had mandated specific pay rates and fringe benefits for construction workers on state projects.
- Also in 2018, the state legislature passed a law preventing municipalities from restricting what salary history employers could ask about on job applications.
- In 2019, Michigan became the first state to mandate paid sick leave for many workers.
Municipality Minimum Wage Laws
Michigan currently enforces a statewide minimum wage law, without allowing cities or counties to set higher rates.
As of January 1, 2020, the state minimum wage is:
- $9.65 per hour for most workers
- $3.67 per hour for tipped employees (before tips)
- $8.20 per hour for some minors
- $4.25 per hour as a training rate for minors in certain cases
In 2017, only about 2.1% of Michigan workers were earning minimum wage, likely due to the state’s strong union presence.
Michigan Minimum Wage Exemptions
Michigan’s minimum wage law, known as the Workforce Opportunity Wage Act, requires all private employers with two or more employees (aged 16 or older) to comply with state minimum wage regulations.
To determine exempt and nonexempt workers, Michigan follows the federal Fair Labor Standards Act (FLSA) rules. Exempt workers may be exempt from minimum wage and overtime rules or from overtime rules only. Simply being on a salary does not automatically qualify an employee as exempt; federal guidelines for pay, duties, and job type must also be met.
Michigan Posting Requirements
In addition to federal labor law poster requirements, Michigan mandates that specific information be posted in an easily accessible area for employees.
These state labor law posters and notices include:
- The latest minimum wage poster from the state
- Michigan’s Right to Know Law
- The New or Revised SDS form (as part of Michigan OSHA requirements)
For employers with at least 50 employees, information on the Paid Medical Leave Act (PMLA), passed in March 2019, must also be posted. Additionally, a no smoking sign is required under Michigan’s Smoke Free Air Law of 2009.
Required Posters:
- Minimum Wage
- Youth Employment Standards
- Paid Medical Leave (PMLA)
- Fair Employment
- Unemployment Insurance
- Whistleblowers’ Protection Act
- Safety and Health Protection on the Job
- Michigan Right to Know Law (SDS #2105)
- New or Revised SDS (SDS #2106)
- No Smoking Sign
Tipped Wage in Michigan
Michigan allows employers to pay tipped employees a lower direct rate of pay than the minimum wage, counting a portion of tips received toward the total, with certain exceptions and restrictions.
As of January 2021, the minimum tipped wage is $3.67 per hour, which adjusts annually along with the standard minimum wage rate.
The combined total of the tip credit (tips counted toward the wage rate) and the direct rate of pay must equal at least the regular minimum wage ($9.65 in 2021). If tips received do not average out to cover the difference between $3.67 per hour and $9.65 per hour, the employer must pay the difference to ensure the employee earns at least $9.65 per hour.
Tips must be calculated on a workweek or pay period basis for each employee, rather than daily. The tips received for the workweek or pay period are divided by the total hours worked to determine the average tips per hour rate.
Tip pools are permitted within the federal definitions of a tip pool and with prior notice to the employee.
Special recordkeeping rules apply for tip credits. For any pay period where the employer takes a tip credit, whether from individual or pooled tips, the employer must record the tip credit amount in employment records. These records must be signed and dated by the tipped employee before wages are paid for that period.
Overtime Wage in Michigan
Michigan generally follows federal Fair Labor Standards Act (FLSA) rules for overtime wages.
Employees must be paid time and a half for any hours worked over 40 in a seven-day workweek, unless they are exempt. Exempt employees are defined by FLSA rules based on job duties, salary amount, and job category, not just whether they are salaried or hourly.
The regular rate of pay is calculated as an average of the amount paid per hour over the pay period if the employee has different pay rates at different times. Michigan does not limit the number of hours worked in a day or week, except for minors in some cases. Employers are not required to allow scheduled overtime shifts if their needs change.
Michigan also follows FLSA rules for holidays and weekends, meaning there is no requirement for double or triple time for overtime worked during these periods.
However, Michigan allows compensatory time off (comp time) instead of overtime pay if certain conditions are met. Both the employer and employee must be covered under the Improved Workforce Opportunity Wage Act, and a collective bargaining agreement must not cover the employee. Additionally, the employer must provide at least 10 days of paid leave time during the year outside of comp time.
Employees can voluntarily accept comp time, provided it does not exceed 240 hours. After reaching 240 hours, the employee must be paid the standard time and a half for overtime. Employees cannot be coerced or required to take comp time instead of overtime pay. Comp time must be provided at the same rate as overtime pay, meaning one and a half times the hours worked.
Child Labor Laws in Michigan
In Michigan, a minor is defined as anyone under the age of 18 who is not emancipated. The minimum age to work in the state is generally 14, with some exceptions.
Minors aged 16 and older who have graduated high school or received an equivalency certificate, and minors aged 17 who pass the general educational development test, are not covered by this legislation. Employers must keep proof of graduation or certificates for these minor employees.
Minors performing with arts organizations are exempt from Michigan child labor laws if the organization has a letter of approval from the Department of Labor.
Minors covered by Michigan child labor law must obtain work permits before starting work. These permits are not guaranteed and can be revoked for reasons such as poor academic performance or behavior. Employers must keep these permits on file.
Exceptions to the need for permits include minors at least 13 years old working in specific agricultural jobs and unpaid volunteers if the organization qualifies under the statute.
Minors cannot work more than five continuous hours without a 30-minute break for meals and rest. They also face restrictions on the hours they can work to ensure it does not interfere with school. Minors cannot work in fixed-location cash transaction jobs after 8 p.m. or sunset (whichever comes first) without another adult present.
Minors aged 16 and 17 can be paid 85% of the current minimum wage, which was $8.20 per hour in 2021. New hire minors aged 16 to 19 can be paid a training wage of $4.25 per hour for the first 90 days of employment.
Employer Recordkeeping Requirements in Michigan
Michigan has specific employer recordkeeping requirements in addition to federal rules such as the FLSA, the Civil Rights Act, and the Family Medical Leave Act (FMLA).
Most employers, with some exceptions for certain industries and small shops under Michigan OSHA (MIOSHA) reporting, must keep employee payroll records for at least three years. These records should include:
- Hours worked
- Wages paid
- Any wage deductions
- Tip credits taken (with employee signatures confirming this)
- Fringe benefit information
- Comp time records (showing both accrual and hours used)
Employers must also maintain records showing contributions to unemployment insurance and supporting files for LARA (Michigan’s Department of Licensing and Regulatory Affairs). State workers’ compensation and MIOSHA require records on employee injuries or illnesses that result in disability or death.
For child labor laws, employers must keep proof of age of minors, work permits, time records (including specific hours worked), and any other supporting compliance documentation. Time records must be kept for at least one year.
Michigan Labor Law Questions & Answers
Minors in Michigan have hour limits based on their age:
- Minors aged 16 to under 18: Cannot work more than 48 hours a week when school is not in session or 24 hours in one week during school sessions. They are also limited to no more than eight hours per day on average and a maximum of 10 hours per day occasionally. They cannot work more than six days in a row. Exceptions exist for some agricultural work, allowing those 16 and older to work up to 62 hours in one week with consent, and up to 11 hours per day.
- Minors under age 16: Cannot work more than a total of 48 hours a week, including school hours during school sessions. When school is not in session, they can work up to 48 hours in one week, with an average daily total of eight hours and no more than 10 hours on any one day.
Michigan does not require employers to provide work breaks to adult workers, nor does federal employment law. However, if short breaks are offered, they must be paid as time worked. Minors cannot work more than five straight hours without at least a 30-minute rest or meal break.
Yes, some employers are required to provide paid medical leave or sick time to certain employees in Michigan under the Paid Medical Leave Act (PMLA), which took effect on March 29, 2019. This law applies to private employers with 50 or more employees, but it does not apply to federal government employees, other states, or political units in other states.
There are 12 exemptions to eligibility under the PMLA, including employees who worked less than 25 hours per week in the previous year or less than 25 weeks out of the year. The act counts all workers toward the 50-employee threshold, regardless of whether they are full-time or part-time, even if some are exempt from the benefits.
The PMLA requires employers to provide eligible employees with accruing sick leave at a rate of one hour for every 35 hours worked. The leave accrual is capped at one hour per workweek and 40 hours per benefit year (a consecutive 12-month period used for calculating benefits).
Employees can roll over up to 40 hours of unused medical leave from one year to the next, but employers are not required to allow more than 40 hours of leave per benefit period. If an employer provides at least 40 hours of paid leave per year, they are considered compliant with the PMLA, even if the leave is paid vacation time.
Employers are limited in the restrictions they can place on the use of accrued paid medical leave. Employees may use accrued time in one-hour increments unless a different policy is stated in writing in employee benefit documents, such as an employee handbook.
Other than requiring employees to wait 90 days to begin taking accrued leave, employers cannot limit how soon accrued leave can be taken. Employees can use accrued paid medical leave for most medical situations, family medical concerns, or legal proceedings related to domestic violence.
Yes, tip pooling is legal in Michigan, following the federal rules outlined in the Fair Labor Standards Act (FLSA). Michigan’s minimum wage and direct wage are higher than the federal minimum wage, but the process for conducting a tip pool remains the same.
Employees must be notified in advance of a tip pool, and tip pools must not mix different types of service employees. Employees who are not typically tipped should not be included in tip pools.
Mandatory service charges added to bills are not considered tips under federal rules, and any funds paid to employees from these charges must be treated as wages, not tips.
Michigan Labor Law Posters
Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters.