Compliance Watch:

What are my rights as a salaried employee in Michigan?

Michigan salaried employees laws define a salaried employee in the state an individual who receives a fixed, predetermined amount of compensation from their employer regularly. In Michigan, an employer is required to pay their salaried employees on a weekly, biweekly, or monthly schedule, regardless of the number of hours worked. Once a payday schedule has been set, an employer cannot deviate from it. Salaried employees in Michigan can receive their salaries in cash, check, direct deposit, or through a payroll debit card. 

Salaried employees in Michigan falls under two categories based on eligibility for overtime. The first category is salaried employees with exempt status. Employees in this category do not qualify for overtime and receive the same compensation even when the time worked surpasses the threshold for overtime. They include professional, executive, and administrative employees. Comparatively, non-exempt employees receive overtime pay for all time worked above 40 hours in a workweek.

Please note that this table provides a general overview of the differences between exempt and non-exempt employees in Michigan. Specific details may vary depending on individual employment contracts, industry standards, and changes in labor laws. It’s crucial to stay informed about the latest regulations to ensure compliance.

You can learn more about the rights of an hourly employee in Michigan through our detailed guide.

Salaried employees in Michigan have the right to the following basic provisions at the workplace:

• Minimum Wage: Non-exempt salaried employees in Michigan have the right to receive at least the minimum wage established by Michigan labor laws. As of 1st January 2024, the minimum wage in Michigan is $10.33. In comparison, exempt salaried employees in Michigan are entitled to the federal minimum weekly pay for exempt salaried employees as per the FLSA. Therefore, they should receive a minimum of $684 every week or $35,568 every year.
• Overtime Pay: Non-exempt salaried employees who work more than 40 hours per week are generally entitled to receive overtime pay at a rate of 1.5 times their regular hourly rate.
• Workplace Safety: Salaried employees have the right to a safe and healthy work environment. Employers with three or more employees who work a minimum of 35 hours a week for not less than 13 weeks are required to provide workers’ compensation insurance. The insurance compensates workers for lost wages, disability, rehabilitation, healthcare, and death due to work-related injuries. 
• Equal Pay: Salaried employees have the right to receive equal pay for equal work, regardless of gender or other protected characteristics. Employers in the state can only base differences in compensation on merit, seniority, work quality, and quantity. 
• Family and Medical Leave: Eligible salaried employees have the right to take unpaid leave under the Family and Medical Leave Act (FMLA) for certain family or medical reasons without fear of job loss. The state of Michigan requires employees to submit formal applications for unpaid family and medical leave if they will be away from work for five or more consecutive days. 
• Paid Leave: Non-exempt employees whose employers have more than 50 employees are eligible for paid leave under the Paid Medical Leave Act.
• Breaks and Meal Periods: Salaried employees under the age of 18 have the right to 30-minute uninterrupted rest breaks for every five hours worked. 
• Pay Frequency: Michigan law leaves the determination of the length of a pay period to the employers’ discretion but employers are required to pay employees at regular intervals. However, if an employer chooses a bi-monthly pay schedule, they just pay their employees within 15 days of the previous pay period. Similarly, employers who choose a monthly pay schedule must pay their employees on or before the first day of every month. 

Please note that employment laws can change over time, so it’s crucial to consult with the Michigan Department of Labor and Economic Opportunity or an attorney for the most up-to-date information and guidance on your specific situation.

Yes, some salaried employees in Michigan have the right to overtime pay. Here are a few things to note about salaried employees and overtime eligibility in the state:

• Exempt vs. Non-Exempt Employees: According to Michigan overtime laws, overtime eligibility in the state hinges on the distinction between exempt and non-exempt employees.
• Legal Foundation: The Fair Labor Standards Act (FLSA) serves as the foundation for overtime regulations in Michigan.
• Salary Threshold: Employees must earn less than $684 per week or $35,568 per year to qualify for overtime. 
• Job Duties: Exempt employees usually engage in managerial, administrative, or professional tasks, while non-exempt employees typically perform manual or clerical work.
• Hourly vs. Salaried: Overtime eligibility doesn’t solely depend on an employee’s hourly or salaried status.
• Enforcement: The Michigan Department of Labor and Economic Opportunity (LEO) and the U.S. Department of Labor oversee overtime regulations and can investigate and enforce compliance.

Please note that labor laws can change over time, so it’s crucial to stay up-to-date with the latest regulations and overtime eligibility rules in Michigan.

Yes. Employers are allowed to make deductions from an employee’s wages in various situations. Here is a general list of instances when an employer in Michigan may be permitted to make deductions from an employee’s wages:

• Legally Mandated Deductions: Employers can deduct federal and state income tax from an employee’s salary. As of 2024, the current rate of individual income tax in Michigan is 4.25%. Employers can also deduct social security and medicare contributions in addition to court-ordered deductions such as child support and alimony.
• Voluntary Deductions: In addition to compulsory legally authorized deductions, employers can make other deductions for the employee with their written authorization. These include contributions to retirement plans, donations to charity, and insurance premiums. 
• Uniforms and Equipment: Michigan laws allow employers to deduct the cost of uniforms, tools, or equipment needed for work. However, the employees have to agree to the deductions beforehand. Further, the deductions should not reduce an employee’s salary below the minimum wage in the state. 
• Damage or Loss: In Michigan, employees are liable for damaged equipment and the destruction of company property caused by negligence or misconduct. Employers can deduct these costs from an employee’s salary. 
• Cash Shortages: Employers can recover cash register shortages, lost or stolen inventory, and similar discrepancies from an employee’s salary. 
• Recovering Overpaid Wages or Advances: Employers can recoup overpaid wages from an employee’s salary. However, Section 7(4) of the Payment of Wages and Fringe Benefits Act outlines some conditions to be met before making the deductions as follows:

1. 1. Reason for Overpayment: An employer can only deduct an employee’s wages if the overpayment resulted from a mathematical miscalculation, typographical error, clerical error, or misprint in processing the employee’s regularly scheduled wages or fringe benefits.
   2. Minimum Wage Rate Compliance: An employer must ensure that the employee’s rate of pay remains above the state or federal minimum wage rate after the deduction. Deductions cannot reduce gross wages below the greater of the two minimum wage rates.
   3. Timing of Deduction: The deduction must be made within six (6) months of the overpayment date. Employers can spread the deduction over multiple pay periods if needed to recoup the full amount.
   4. Advance Written Notice: An employer must provide written notice to the employee at least one pay period before the intended deduction.
   5. Deduction Amount Limitation: The amount deducted from an employee’s salary should not exceed 15% of their gross wage earnings.
   6. Deduction Order: An employer can only make the deduction to recover an overpayment after all legally authorized deductions and employee-authorized deductions have been made.

It’s important to note that labor laws and regulations regarding wage deductions can vary widely, so both employers and employees should be aware of the specific rules applicable in their jurisdiction. Employers should also obtain written consent from employees for any voluntary deductions, and deductions should generally not reduce an employee’s wages below the minimum wage or violate other labor laws.

In Michigan, salaried employees aged 18 and above do not have the right to breaks under federal and Michigan labor laws. However, minors are eligible for 30-minute breaks for every five hours worked. 

That said, an employer may decide to allow employees to take breaks. If this happens, the breaks have to be paid for exempt salaried employees. Non-exempt employees do not have to be compensated for breaks that last more than 20 minutes if they are relieved of their duties completely for the entire duration of the break. 

In addition to the mandatory breaks for minors, the state allows breaks for breastfeeding employees. Michigan laws defer to the FLSA on breaks for nursing mothers. Consequently, employers in the state must provide some accommodations for breastfeeding employees who are bound by the FMLA by providing breaks to express milk and a safe, enclosed, and private space to do so. 

Similarly, the state defers to the FMLA on unpaid family and medical leave for exempt employees. As such, exempt salaried employees are entitled to up to 12 weeks of unpaid leave for the birth or adoption of a child, recovery from illness, or to take care of an immediate family member recovering from an illness.

Michigan leave laws also compel employers to provide paid sick leave for some salaried employees. According to the Paid Medical Leave Act, which took effect in March 2019, non-exempt employees whose employers have over 50 employees are eligible for paid sick leave. They accrue one day of leave for every 35 hours worked for up to 40 days every year. Further, employers are required to carry over unused sick leave to the following year. 

As per the Paid Medical Leave Act, employers in Michigan can require employees to provide documentation when applying for leave under the act. Further, employees are limited in the usage of paid time off under the act. They can only use their paid sick leave under the following circumstances:

• For diagnosis and preventive care for themselves or their immediate family.
• If their workplace or their children’s school or place of care is closed due to a public health emergency.
• If they or their immediate family members are exposed to a communicable disease.
• For mental healthcare.
• Victims of domestic violence can use the time off to receive primary and mental healthcare, for relocation, participation in criminal proceedings, or to receive the services of a victim services organization.

It is important to remember that laws related to breaks and paid leave can change over time. Therefore, it’s important to ensure you have the most current and accurate information regarding the benefits available to Michigan employees under the FLSA, FMLA, Paid Leave Medical Act, or any other legislation.

Michigan laws exempt some categories of salaried employees from overtime eligibility. As such, exempt status means that the employees cannot claim or receive overtime compensation for time worked beyond 40 hours a week. Non-exempt status, on the other hand, implies that the employee is eligible for overtime for every minute worked above 40 hours a week.

Here are the key implications of exempt employee status in Michigan:

• Overtime Pay Exemption: One of the most significant implications of being classified as an exempt employee is the exemption from overtime pay requirements. Exempt employees are not entitled to receive overtime pay for hours worked beyond 40 hours per week, regardless of the number of hours worked.
• Salary-Based Compensation: Exempt employees in Michigan are generally paid a predetermined salary of above $684 a week or $35,568 a year. This salary must be paid consistently, regardless of the number of hours worked.
• Job Security and Benefits: Exempt employees may enjoy greater job security and access to certain benefits compared to non-exempt employees. They often have more stable employment arrangements and can take up to 12 weeks of unpaid leave without worrying about their job.

Please keep in mind that this table provides a general overview of exempt and non-exempt employee characteristics in Michigan. Specific details can vary based on individual circumstances, job roles, and changes in labor laws or employment agreements.

In Michigan, the primary criteria for classifying an employee as exempt or non-exempt are based on salary level and job duties as follows:

• The Salary Basis Test: To be considered exempt, an employee must typically be paid a salary that meets or exceeds the minimum threshold of $684 per week as established by the FLSA. Second, exempt employees must receive their full salary for any week in which they perform any work, regardless of the quantity or quality of that work
• Duties Test: Executive, professional, and administrative employees in Michigan who pass the salary basis test are exempt. To qualify for the executive exemption, an employee must primarily perform managerial duties such as supervising at least two employees, having authority over hiring and firing, and having a significant role in decision-making. To qualify for the administrative exemption, the employee must perform work directly related to management or general business operations, exercise discretion and independent judgment in their roles, and have tasks that involve substantial responsibility.
  Finally, to qualify for the professional exemption, an employee’s work must involve advanced knowledge in a field of science or learning or require creativity and imagination.

As of 1st January 2024, the minimum wage for non-exempt salaried employees in Michigan is $10.33 per hour. Exempt employees, on the other hand, must earn a minimum of $684 every week or $35,568 per year. Employers must be keen to ensure that any deductions except court-ordered garnishments and voluntary deductions should not reduce an employee’s salary below the minimum wage.

Overtime is compensated at a rate of 1.5 times the regular rate for non-exempt salaried employees. Additionally, employees can opt for compensatory time instead of overtime pay. Under this arrangement, an employee receives 1.5 hours off for every 1 hour worked for up to 240 hours in a year.

In Michigan, a salaried employee has the right to the following employee benefits and protections:

• Overtime Pay: Eligible employees are entitled to overtime pay or compensatory time.
• Paid Sick Leave: Some Michigan employees are entitled to paid sick leave, allowing them to accrue and use up to 40 hours every year for personal illness, family care, or other covered reasons.
• Family and Medical Leave: Eligible employees can take unpaid leave and enjoy the protection of the federal Family and Medical Leave Act (FMLA).
• Workplace Discrimination: Michigan law prohibits workplace discrimination based on race, color, religion, sex, national origin, age, disability, arrest record, genetic information, marital status, and other protected characteristics.
• Whistleblower Protection: Employees who report illegal activities or safety violations within their workplace are protected from retaliation by the Michigan Whistleblowers’ Protection Act.
• Workers’ Compensation: Employees who suffer job-related injuries or illnesses are entitled to workers’ compensation benefits, including medical care and wage replacement.

In Michigan, Violations of labor or employment laws can encompass wage and hour disparities, unsafe working conditions, or discriminatory practices. You can file a wage violation claim with the Michigan Department of Labor and Economic Opportunity by filling out the WH43 Employment Wage Complaint Form. Please note that you must file the claim within 6 months of the violation.

If you’ve experienced workplace discrimination, you can file a report in person at the offices of the Michigan Department of Civil Rights or file a claim online. It is important to note that you can only report workplace discrimination within 180 days of the act. Finally, you can report safety or health violations by filing a complaint with the Michigan Occupational Safety and Health Administration.