Michigan Labor Laws

Updated: 03/06/2020

Michigan Minimum Wage

Michigan's set state minimum wage is $9.65 per hour as of January 1, 2020, with an increase to $9.87 per hour scheduled in 2021 if the state unemployment rate falls under 8.5%.

USA map with Michigan superimposed

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History of Michigan Labor Laws

Michigan has a long history of labor laws and labor union support.

Michigan's Public Employment Relations Act in 1947, for instance, required employees to join any union present at their workplace. This requirement of union membership to keep a job was only changed in 2013 with new freedom to work laws that made Michigan a modified right to work state (police officers and firefighters were exempted from the freedom to work laws).

Following the transition to a modified right to work state, more frequent labor law changes took place:

  • In 2018 Michigan's Prevailing Wage Law that required specific pay rates and fringe benefits for construction workers on state projects was repealed.
  • Also in 2018, the state legislature passed legislation banning 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 to workers in many cases.

Municipality Minimum Wage Laws

Michigan currently uses only a statewide minimum wage law rather than allowing cities or counties to set alternative higher rates.

Michigan's state minimum wage (as of January 1, 2020) is $9.65 per hour, $3.67 per hour for tipped employees (before tips), an $8.20 rate for some minors, and a $4.25 training rate for minors in some cases.

As of 2017, only about 2.1% of Michigan workers were earning minimum wage, possibly due to strong unionization in the state.

Michigan Minimum Wage Exemptions

Michigan's minimum wage law, the Workforce Opportunity Wage Act, makes all private employers with two or more employees (at least age 16) accountable to the state minimum wage rules.

Michigan uses the federal Fair Labor Standards Act (FLSA) rules to determine exempt and nonexempt workers. Exempt workers may be exempt from minimum wage and overtime rules or overtime rules only. Salary pay status alone is not enough to qualify as an exempt worker, and federal guidelines must be met for pay, duties and job type.

Michigan Posting Requirements

In addition to the federal labor law poster requirements, as with most states, Michigan requires specific information to 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, and 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, is also required. A no smoking sign is also required as part of 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 minimum wage and count a portion of tips received toward the total, with some exceptions and restrictions.

The minimum tipped wage, as of January 2020, is $3.67 per hour (it will adjust annually along with the standard minimum wage rate) before tips.

Tip credit (tips counted toward wage rate) plus the direct rate of pay must equal at least the regular minimum wage ($9.65 in 2020). Should tips received not average out to enough to make up the difference between $3.67 per hour and $9.65 per hour, the employer must pay the difference so that the employee has an effective wage of at least the $9.65 per hour.

Tips must be calculated on a workweek or pay period basis for each employee instead of daily. Tips received for the workweek or pay period are to be divided by total hours worked to get the average tips per hour rate.

Tip pools are allowed within federal definitions of a tip pool and with prior notice to the employee.

However, special recordkeeping rules apply for tip credits. For any pay period where the employer takes a tip credit, whether individual or pool tips, the employer must record the tip credit amount in employment records. Those records must be signed and dated by the tipped employee before the wages are paid for that period.

Overtime Wage in Michigan

Michigan defers to federal FLSA rules in most overtime wage cases.

Any hours worked over 40 hours within a seven-day workweek must be paid at time and a half of the employee's regular rate of pay unless the employee is exempt.

Exempt employees are defined under FLSA rules regarding job duties, salary amount, and job category, not merely whether they are salaried or hourly employees.

The regular rate of pay is an average of the amount per hour paid over the pay period if the employee receives different pay rates at different times. Michigan does not restrict the number of hours worked in a day or week except for minors in some cases. Likewise, there is no requirement that an employer allows you to work scheduled overtime shifts if their needs change.

Similarly, Michigan follows FLSA rules on holidays and weekends and does not require double or triple time for overtime worked in those conditions.

However, Michigan does allow comp time off (compensatory time) to be offered instead of overtime pay if certain conditions are met by both the employer and employee. Both employer and employee must be covered under the Improved Workforce Opportunity Wage Act, and a collective bargaining agreement may not otherwise cover the employee. Further, an employer has to provide at least 10 days of paid leave time during the year outside of comp time.

If conditions are met, an employee may voluntarily accept comp time as long as accrued comp time does not exceed 240 hours. After 240 hours of accumulated comp time, an employee must be paid the standard time and a half of the regular rate of pay.

Employees may not be coerced, intimidated or required to take comp time instead of overtime pay. Compensatory time must be provided at the same rate that overtime pay would have been provided. In other words, it must be awarded at one and a half times the hours worked.

Child Labor Laws in Michigan

Michigan considers a minor to be anyone under age 18 who is not an emancipated minor and, with some exceptions, considers age 14 to be the minimum age to work in the state.

Minors aged 16 and up 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 are required to keep proof of graduation/certificates of their minor employees.

Minors in performances by performing arts organizations are not subject to Michigan child labor laws if the organization receives a letter of approval from the Department of Labor.

Covered minors under Michigan child labor law must obtain work permits before starting work, and work permits are not guaranteed to be issued by school officers. Employers must keep work permits on file. Even if a work permit is given, it can be revoked under certain conditions, such as poor academic or behavior at school.

Exceptions to the need for permits include some minors at least age 13 working in specific agricultural jobs and unpaid volunteers if the organization qualifies under the statute.

While rest breaks are not guaranteed for adult workers, minors may not work more than five continuous hours without at least a 30-minute break for meal and rest time.

Along with daily and weekly time worked limits, minors are restricted as to what hours of the day they can work. Most of the restrictions are to prevent working during school or the minor working so late that it interferes with rest for school the next day. Along with restrictions on hazardous jobs, minors are not allowed to work in any fixed location cash transaction job after 8 p.m. or sunset (whichever comes first) without another adult worker present.

Some minors are not subject to an alternative minimum wage. Those aged 16 and 17 can be paid under an 85% rule that allows an employer to pay 85% of the current minimum wage, or $8.20 per hour in 2020.

Employers can also pay new hire minors aged 16 to 19 years old a training wage of $4.25 per hour but only for the first 90 days that they are employed.

Employer Recordkeeping Requirements

Michigan has specific employer recordkeeping requirements in addition to the federal rules that employers are subject to, such as the FLSA, the Civil Rights Act and the Family Medical Leave Act (FMLA).

With exceptions for certain industries and some small shop exceptions to Michigan OSHA (MIOSHA) reporting, most employers must keep employee payroll records for at least three years. These records should include hours worked, wages paid, any wage deductions, tip credits taken (along with employee signatures confirming this), and fringe benefit information. Comp time records, showing both accrual and hours used, must also be kept.

Records showing employer contribution to unemployment insurance and supporting files must be kept for LARA (Michigan's Department of Licensing and Regulatory Affairs). State workers' compensation and MIOSHA require records on injuries or illnesses of employees that result in disability or death of the employee.

Child labor laws require proof of age of minors, work permits, time records (including specific hours worked), and any other supporting compliance documentation be kept by the employer. Time records, specifically, must be kept at least one year.

Recent Michigan Labor Law Updates

Unemployment Insurance - Mandatory - June 2019

The Michigan Unemployment Compensation Notice to Employee has been updated with changes on how to file for unemployment benefits. A claim for benefits may be filed by registering at a Michigan Works Service Center in person, online or by phone.

Paid Medical Leave - Mandatory - February 2019

The Michigan Department of Licensing and Regulatory Affairs has released a new Paid Medical Leave poster. The new Michigan Paid Medical Leave Act requires employers to provide one hour of paid medical leave for every 35 hours worked, effective March 29, 2019. The new law also requires employers to post this notice informing employees of their rights.

Minimum Wage - Mandatory - February 2019

Updated to reflect an increase from $9.25 an hour to $9.45 an hour effective March 29, 2019. The poster also shows increases for 2020 and 2021.

Michigan Labor Law Frequently Asked Questions

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