Overtime Pay Law Summaries
Michigan, Overtime Pay Law Summaries
The Michigan law relating to overtime is located in the Michigan Compiled Laws, Labor Code, at Chapter 408, Sections 408.382, 408.384a, 408.393 and 408.394. These provisions are part of the Minimum Wage Law of 1964. The full text of the law is available beginning at Wages-Hours ¶23-44,001 .
DEFINITIONS
“Employer” means a person, firm, or corporation, including the state and its political subdivisions, agencies, and instrumentalities, and a person acting in the interest of the employer, that employs two or more employees at any one time within a calendar year. An employer will be subject to Michigan's overtime pay law during the remainder of that calendar year (Sec. 408.382, as amended by H. 4177, L. 1997).
“Employee” means an individual not less than 16 years of age employed by an employer on the employer's premises or at a fixed site designated by the employer, and includes a minor employed under the Youth Employment Standards Act (Sec. 408.382, as amended by H. 4177, L. 1997).
COVERAGE
Michigan's overtime pay law covers most employees over the age of 16, with limited exceptions explained at below, that work on the employer's premises. Minors are also covered. Public and private employers that employ two or more persons at any one time are covered employers (Sec. 408.382, as amended by H. 4177, L. 1997).
Notwithstanding Sec. 408.394(1) (see EXCEPTIONS below), an employee shall be paid in accordance with the overtime compensation requirements of Sec. 408.384a if the employee meets either of the following conditions (Sec. 408.394(2), as amended by P.A. 373 (H. 6213), L. 2005, enacted September 22, 2006):
Is employed in domestic service employment to provide companionship services for individuals who, because of age or infirmity, are unable to care for themselves and is not a live-in domestic service employee.
Is employed to provide child care, but is not a live-in domestic service employee. However, the requirements of Sec. 408.384a do not apply if the employee meets all of the following conditions: (a) is under the age of 18; (b) provides services on a casual basis; (c) provides services that do not regularly exceed 20 hours per week, in the aggregate.
EXCEPTIONS
Michigan's overtime pay law does not apply to an employer that is subject to the minimum wage provisions of the federal Fair Labor Standards Act, except where the application of the federal minimum wage provisions would result in a lower minimum wage than provided by Michigan law. Each of the following applies to an employer who is subject to the state's overtime pay law only by application of this subsection (Sec. 408.394(1), as amended by P.A. 373 (H. 6213), L. 2005, enacted September 22, 2006):
Sec. 408.384a does not apply.
The overtime pay law does not apply to an employee who is exempt from the minimum wage requirements of the federal Fair Labor Standards Act.
Michigan's overtime pay law does not apply to (1) persons employed in summer camps for not more than four months or to employees who are covered under Sec. 14 of the federal Fair Labor Standards Act; (2) agricultural fruit growers, pickle growers and tomato growers, or other agricultural employers who traditionally contract for harvesting on a piecework basis, as to those employees used for harvesting, until the board has acquired sufficient data to determine an adequate basis to establish a scale of piecework and determines a scale equivalent to the prevailing minimum wage for that employment. The piece rate scale shall be equivalent to the minimum hourly wage in that, if the payment by unit of production is applied to a worker of average ability and diligence in harvesting a particular commodity, he or she receives an amount not less than the hourly minimum wage (Sec. 408.394(3) and (4), as amended by P.A. 373 (H. 6213), L. 2005, enacted September 22, 2006).
Notwithstanding any other provision of Michigan's overtime pay law, Sec. 408.394(1) and (2) (see above) do not deprive an employee or any class of employees of any right that existed on September 30, 2006, to receive overtime compensation (Sec. 408.394(5), as amended by P.A. 373 (H. 6213), L. 2005, enacted September 22, 2006).
In addition, Michigan's overtime pay law does not apply to (Sec. 408.384a, as amended by H. 4177, L. 1997):
executive, administrative, or professional employees, including academic administrative personnel or elementary or secondary teachers. Retail or service establishment employees are not excluded from the definition of bona fide executive or administrative employees because of the number of hours in the employee's workweek that the employee devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40 percent of the employee's hours in the workweek are devoted to those activities;
elected public officials;
political appointees;
amusement or recreational establishment employees, if the establishment does not operate for more than seven months in a calendar year (see details below);
agricultural employees, including farming in all its branches, including forestry or lumbering operations and delivery to market (see details below);
employees who are not subject to Michigan's minimum hourly wage provisions.
Amusement and recreational establishments.- An employer's business will be considered an amusement or recreational establishment if it complies with all of the following provisions (R 408.728, as amended effective January 29, 2000):
It is open for the general public at a fixed site.
It is open primarily to provide leisure activities for those who attend.
It does not operate for more than seven months in a calendar year.
A grocery store, restaurant, motel, curio, souvenir shop, or any other retail and service establishment is not considered an amusement or recreational establishment unless it is so related to an amusement or recreational establishment that it could not, in a reasonable manner, offer its services to the general public independently, and is not open to the general public beyond the months the amusement or recreational establishment to which it is related is open (R 408.728, as amended effective January 29, 2000).
The exempt status of an amusement or recreational establishment and a grocery store, restaurant, motel, curio, souvenir shop, or other retail and service establishment operated under the same ownership will be determined separately for each establishment (R 408.728, as amended effective January 29, 2000).
If an amusement or recreational establishment operates at widely separated fixed locations, the exempt status of each fixed location will be determined separately (R 408.728, as amended effective January 29, 2000).
Employees of a central office or warehouse or office that services an amusement or recreational establishment will not be considered employed by the amusement or recreational establishment (R 408.729, as amended effective January 29, 2000).
An employee whose duties are divided between working for an amusement or recreational establishment and a nonexempt business owned by the same employer will not be exempt from the overtime provisions of the act for any workweek in which work performed at the nonexempt business exceeds 20% of the hours worked (R 408.729, as amended effective January 29, 2000).
Agricultural employees.- An employee will not be considered employed in agriculture for any workweek in which nonagricultural work exceeds 20% of the hours worked in the workweek (R 408.730, as amended effective January 29, 2000).
An employee of an establishment that produces agricultural commodities and sells such commodities to the general public will not be considered employed in agriculture, regardless of his or her duties, if more than 50% of the gross income of the establishment results from sales to the general public (R 408.730, as amended effective January 29, 2000).
WHAT THE EMPLOYER MUST DO
An employee must receive compensation at not less than one and one-half times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours, except as provided below (Sec. 408.384a, as amended by H. 4177, L. 1997).
An employer must establish an employee's workweek and must indicate the beginning time and day of the workweek in the employment record for the employee (R 408.721(1), as amended effective January 29, 2000).
Once the beginning time of an employee's workweek is established, it remains fixed and may be changed only if the change is intended to be permanent and is not designed to evade the overtime requirements of the law (R 408.721(2), as amended effective January 29, 2000).
Each workweek stands alone. Averaging of hours over two or more weeks is prohibited, regardless of whether the employee works on a standard or swing shift schedule and regardless of whether the employee is paid on an hourly, daily, weekly, biweekly, monthly, piecework, commission or other basis, except as otherwise provided by law (R 408.721(3), as amended effective January 29, 2000).
An employer must establish an employee's work period and must indicate the beginning and ending time and date of the work period in the employment record for the employee. The work period need not coincide with the pay period. The beginning and ending date of a work period may not be changed, regardless of the number of hours worked within the period, unless the change is intended to be permanent and is not designed to evade the overtime requirements of the act. An employer may have different work periods for different employees (R 408.722, as amended effective January 29, 2000).
If an employee is paid on an hourly rate plus commission or salary plus commission, then the salary and commission will be considered as gross earnings for the workweek, and the regular rate is obtained by dividing the sum by the number of hours for which the salary was paid (R 408.723(1), as amended effective January 29, 2000).
If an employee is paid on a piece-rate basis, then the regular rate of pay is computed by adding together the total earnings of the workweek from piece rates and all other earnings and any sums paid for other hours worked. This sum total is divided by the number of hours worked in that week to yield the pieceworker's regular rate for that week (R 408.723(2), as amended effective January 29, 2000).
Fire protection and law enforcement.- Michigan, or its political subdivisions, agencies, or instrumentalities, does not violate the overtime pay law with respect to the employment of an employee in fire protection activities or an employee in law enforcement activities, including security personnel in correctional institutions, if any of the following applies (Sec. 408.384a, as amended by H. 4177, L. 1997):
In a work period of 28 consecutive days, the employee receives for tours of duty, which in the aggregate exceed 216 hours, compensation for those hours in excess of 216 at a rate not less than one and one-half times the employee's regular rate-that rate may not be not less than the statutory minimum hourly rate.
For an employee with a work period of least seven but less than 28 days, the employee receives for tours of duty, which in the aggregate exceed a number of hours that bears the same ratio to the number of consecutive days in the employee's work period as 216 bears to 28 days, compensation for those hours in excess of 216 at a rate not less than one and one-half times the employee's regular rate-that rate may not be less than the statutory minimum hourly rate.
If an employee engaged in fire protection activities would receive overtime payments solely as a result of that employee's trading of time with another employee under a voluntary trading time arrangement, overtime, if any, will be paid to employees who participate in the trading of time as if the time trade had not occurred. “Trading time arrangement” means a practice under which employees of a fire department voluntarily substitute for one another to allow an employee to attend to personal matters. The practice is neither for the convenience of the employer nor because of the employer's operations.
Hospitals.- The state or its political subdivisions, agencies, or instrumentalities engaged in the operation of a hospital or an establishment that is primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises will not violate the overtime pay law if, under a written agreement or written employment policy arrived at between the employer and the employee before performance of the work, a work period of 14 consecutive days is accepted instead of the workweek of seven consecutive days for purposes of overtime computation.
Under the agreement, for the employee's employment in excess of eight hours in a workday and in excess of 80 hours in the 14-day period, the employee must receive compensation at a rate of one and one-half times the employee's regular rate-the rate may not be less than the statutory minimum hourly rate (Sec. 408.384a, as amended by H. 4177, L. 1997).
Compensatory time.- In lieu of monetary overtime compensation, an employee subject to Michigan's minimum wage and overtime law may receive compensatory time off at a rate of not less than one and one-half hours for each hour of employment for which overtime compensation is required by law, subject to all of the following (Sec. 408.384a, as amended by H. 4177, L. 1997):
The employer allows employees a total of at least 10 days of leave per year without loss of pay and provides the compensatory time to the employee only pursuant to either of the following: (a) applicable provisions of a collective bargaining agreement, memorandum of understanding, or any other written agreement between the employer and representative of the employee; (b) if employees are not represented by a collective bargaining agent or other representative designated by the employee, a plan adopted by the employer and provided in writing to its employees that provides employees with a voluntary option to receive compensatory time off for overtime work when there is an express, voluntary written request to the employer by an individual employee for compensatory time off in lieu of overtime pay before the performance of any overtime assignment.
The employee has not earned compensatory time in excess of 240 hours.
The employee is not required as a condition of employment to accept or request compensatory time. An employer may not directly or indirectly intimidate, threaten, or coerce or attempt to intimidate, threaten, or coerce an employee for the purpose of interfering with the employee's rights to request or not request compensatory time off in lieu of overtime, or requiring an employee to use compensatory time. In assigning overtime hours, an employer may not discriminate among employees based upon an employee's choice to request or not request compensatory time off in lieu of overtime compensation.
An employee may not accrue more than a total of 240 hours of compensatory time.
Upon the request of an employee who has earned compensatory time, the employer must within 30 days following the request, provide monetary compensation for that compensatory time at a rate not less than the regular rate earned by the employee at the time the employee performed the overtime work.
An employee who has earned compensatory time must, upon the voluntary or involuntary termination of employment, be paid unused compensatory time at a rate of compensation not less than the regular rate earned by the employee at the time the employee performed the overtime work. A terminated employee's receipt of or eligibility to receive monetary compensation for earned compensatory time may not be used by either of the following: (a) the employer to oppose an employee's application for unemployment compensation; (b) the state to deny unemployment compensation or diminish an employee's entitlement to unemployment benefits.
An employee must be allowed to use any compensatory time accrued for any reason, unless use of the compensatory time for the period requested will unduly disrupt the operations of the employer.
Unless prohibited by a collective bargaining agreement, an employer may terminate a compensatory time plan upon not less than 60 days' notice to employees.
NOTICE
Every employer subject to Michigan's overtime pay law, regulations or orders must post copies of the law, regulations or orders in a conspicuous place in the area where employees are employed. The Director of the Department of Consumer and Industry Services will furnish copies of the overtime pay law, regulations, and orders to employers without charge (Sec. 408.391).
ENFORCEMENT
The Director of the Department of Consumer and Industry Services administers and enforces Michigan's overtime pay law (Sec. 408.392).
Investigatory authority.- At the request of the Wage Deviation Board, the Director of the Department of Consumer and Industry Services may investigate and ascertain the wages of employees of an employer subject to the overtime pay law (Sec. 408.392).
Confidential records.- The Director of the Department of Consumer and Industry Services and his or her employees will not reveal facts or information obtained in the course of official duties, except as when required by law, to report upon or take official action or testify in proceedings regarding the affairs of an employer covered by the overtime pay law (Sec. 408.392).
Court actions.- If the Director of the Department of Consumer and Industry Services determines there is reasonable cause to believe that an employer has violated Michigan's overtime pay law, and the director is subsequently unable to obtain voluntary compliance by the employer within a reasonable period of time, the director will bring a civil action for the recovery of the difference between the amount paid and the amount that, but for the violation, would have been paid the employee under Michigan's overtime pay law and an equal additional amount as liquidated damages, together with costs and reasonable attorney's fees. No contract or agreement between the employer and the employee or any acceptance of a lesser wage by the employee will bar the action (Sec. 408.393, as amended by S. 1, L. 1997).
Employee's remedies.- If an employer violates Michigan's overtime pay law, the affected employee, at any time within three years, may (1) bring a civil action for the recovery of the difference between the amount paid and the amount that, but for the violation, would have been paid the employee under Michigan's overtime pay law and an equal additional amount as liquidated damages, together with costs and reasonable attorney's fees; (2) file a claim with the director, who will investigate the claims (Sec. 408.393, as amended by S. 1, L. 1997).
WHO TO CONTACT
Wage and Hour Division, Michigan Department of Labor and Economic Growth, P.O. Box 30476, Lansing, MI 48909-7976. (The physical address for the division is 6546 Mercantile Way, Suite 5, Lansing, MI 48911). Telephone: (517) 335-0400. E-mail: WHINFO@MICHIGAN.GOV.
RECORDKEEPING
Every covered employer must furnish the employee a statement of the hours worked by the employee and of the wages paid, listing deductions made each pay period. The employer must also furnish the Director of the Department of Consumer and Industry Services, upon demand, a sworn statement of the records (Sec. 408.391).
Open records.- The records must be open to inspection by the director, a deputy or any authorized agent of the department at any reasonable time (Sec. 408.391).
Compensatory time.- An employer must (Sec. 408.384a, as amended by H. 4177, L. 1997):
maintain in an employee's pay record a statement of compensatory time earned by that employee in the pay period that the pay record identifies;
provide an employee with a record of compensatory time earned by or paid to the employee in a statement of earnings for the period in which the compensatory time is earned or paid.
POSTING
Every employer subject to Michigan's overtime pay law, regulations or orders must post copies of the law, regulations or orders in a conspicuous place in the area where employees are employed. The Director of the Department of Consumer and Industry Services will furnish copies of the overtime pay law, regulations, and orders to employers without charge (Sec. 408.391).
PENALTIES
Any person that violates any provision of Michigan's overtime pay law, regulation or order is guilty of a misdemeanor (Sec. 408.395).
Compensatory time.- An employer who violates the provisions of Sec. 408.384a(8)(c), or the compensatory time provisions generally, is subject to a civil fine of not more than $1,000 (Sec. 408.384a, as amended by H. 4177, L. 1997; Sec. 408.393, as amended by S. 1, L. 1997).
Discrimination.- An employer that discharges or in any other manner discriminates against an employee because the employee has served or is about to serve on the Wage Deviation Board; or has testified or is about to testify before the board; or because the employer believes that the employee may serve on the board or may testify before the board or in any investigation under the provisions of the overtime pay law, is guilty of a misdemeanor (Sec. 408.395).
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