Understanding the minimum wage requirements in Michigan

Employees in Michigan are entitled to receive compensation for their work that at least meets the state’s minimum requirements for hourly wages.

Employers in Michigan and elsewhere engage in wage theft on a large scale. This means that they improperly classify employees to avoid paying minimum wage and overtime and also just refuse to comply with the law. There are two ways to fight this misconduct: form unions at the work place and know your rights. This article is designed to deal with the second solution, namely know your rights.

Minimum hourly wage rate

Under the Improved Workforce Opportunity Act, people working for employers with two or more employees over the age of 16-years-old are entitled to receive at least the minimum hourly wage rate. Effective January 1, 2020, this rate is $9.65 for every hour worked. However, employees who can reasonably expect to receive tips may be paid less than this rate. Provided their reported average hourly tips are at least $5.98, tipped employees may receive an hourly rate of $3.67.

The law also provides allowances for employers to pay minor-aged workers less than the required minimum hourly rate. Employers may pay employees between the ages of 16-years-old and 17-years-old 85% of the minimum hourly rate; which, for 2020, will increase to $8.20 per hour. During the first 90 days of their employment, employees between 16-years-old and 19-years-old may be paid a training wage of $4.25 for every hour worked.

Overtime

While state and federal laws do not limit the number of hours that people can work during a 7-day workweek, they do necessitate that employers provide overtime pay to those who work more than 40 hours. Employees must be paid one and one-half times their regular pay rate for overtime work. For example, a worker whose regular pay rate is $10 per hour would receive $15 per hour for every hour they work over the 40th during a given workweek.

If employees agree, qualifying employers may offer compensatory time instead of paying them overtime wages. In such cases, employees may receive their normal hourly wages and compensatory time off work of one and one-half hours for each hour of overtime they put in. The state requires that agreements to receive compensatory time must be put in writing and workers' accrued compensatory time must not exceed 240 hours.

Non-payment complaints

Should their employers fail to pay them their rightfully earned wages or overtime, employees may file a complaint with the Michigan Department of Labor and Economic Opportunity. After an investigation and if the matter cannot be resolved informally, the department may issue a written determination. The employer and the employee may choose to appeal this decision, and a hearing may be held before an administrative law judge to decide whether a violation occurred.

Workers who are due minimum wages for hours worked or overtime pay from their employers may also choose to file a civil action to recover the money they are entitled to. Therefore, people in Michigan who believe their employers violated the state's minimum hourly wage and overtime law with regards to their pay may benefit from talking to a legal representative about their rights and options.