Understanding overtime laws in Michigan ensures you receive fair compensation for your work. This guide will help you determine who qualifies for overtime pay, how to calculate it, and what steps to take if owned overtime.
Who is Entitled to Overtime Pay in Michigan?
In Michigan, the Fair Labor Standards Act (FLSA) governs overtime pay. If you work more than 40 hours in a workweek, you are generally entitled to overtime pay.
Non-exempt employees, typically including hourly workers, must receive overtime compensation. However, some salaried employees may also qualify based on their job duties and salary level.
Exemptions and Exceptions
Not all employees qualify for overtime pay. Exempt employees include those in executive, administrative, and professional roles, as well as certain computer professionals and outside salespersons. Your job duties and salary determine if you are exempt.
The Duties and Salary Tests
The duties test examines your job responsibilities. For instance, executives must primarily manage the enterprise, direct the work of at least two other employees, and have the authority to hire or fire. The salary test requires that you earn a minimum salary. For 2024, the minimum salary threshold for exempt employees under FLSA is $35,568 annually.
Rate and Calculation
Calculating your overtime pay involves a specific formula. The standard overtime rate is one and a half times your regular hourly rate.
To determine your regular hourly rate, divide your weekly earnings by the total number of hours worked that week. Then, multiply this rate by 1.5 for any hours worked over 40 in a week.
For example, if you earn $600 a week for 40 hours of work, your regular hourly rate is $15. If you work 45 hours, your overtime rate is $22.50 per hour. Therefore, your overtime pay for the extra five hours would be $112.50.
Additional Considerations for Salaried Employees
Salaried employees can sometimes qualify for overtime. If you receive a salary but do not fall under the exempt categories, you should still be eligible for overtime pay.
Your overtime rate is based on your equivalent hourly wage, calculated by dividing your weekly salary by the number of hours you normally work.
Compensatory Time vs Overtime
In Michigan, employees may choose compensatory time (comp time) instead of overtime pay. Comp time allows employees to receive paid time off instead of extra pay for overtime hours.
While only government employers can offer comp time under federal law, private employers in Michigan may also implement this system under specific conditions.
To start a compensatory time system, your employer needs a written agreement from you. This agreement states that instead of overtime pay, you will receive one and a half hours of paid time off for every hour worked beyond 40 in a workweek.
To qualify for comp time, you must receive at least 10 days of paid time off per year.
You can accumulate up to 240 hours of comp time, equivalent to nearly one month of paid leave. However, your employer may limit the use of comp time if it would cause significant disruption to their operations.
If you leave your job, whether voluntarily or involuntarily, your employer must pay you for all accumulated comp time.
Exceptions and Exemptions
Certain professions in Michigan are exempt from overtime pay requirements.
Retail and service employees can be classified as administrative, executive, or professional if more than 40% of their workweek activities fall into these categories.
Exempt professions include:
Workers not covered by minimum wage requirements
Agricultural workers
Employees of seasonal amusement establishments
Public office holders
Administrative, professional, or executive employees, such as teachers or school administrators
Potential Penalties for Noncompliance and Misclassifying Employees
Employers must avoid common mistakes regarding overtime laws, such as misclassifying employees as exempt or non-exempt. In Michigan, failing to comply with these laws can lead to several repercussions, including:
Reimbursing employees for unpaid overtime
Paying liquidated damages, often doubling the unpaid overtime wages
Escalating legal claims that could lead to class action lawsuits
Incurring legal expenses and investing time in litigation
Understanding and following these regulations helps ensure fair compensation and avoids legal issues.
Steps to Take if You Believe You’re Owed Overtime Pay
If you think you’re owed back overtime pay, follow these steps:
Document Your Hours: Keep detailed records of your hours worked, including any overtime.
Review Your Pay Stubs: Check your pay stubs for any discrepancies in your overtime pay.
Understand the Statute of Limitations: In Michigan, you have three years to file a claim for unpaid overtime under FLSA if the violation was willful.
File a Complaint: You can file a complaint with the Michigan Department of Labor and Economic Opportunity or the U.S. Department of Labor.
Consult an Attorney: If necessary, consult with an employment attorney to understand your rights and options.
Legal Rights
Understanding your rights under Michigan overtime laws ensures you receive fair compensation for your work. Employers must comply with these laws, and if they fail to do so, they face significant penalties.
Michigan’s overtime laws aim to protect workers and ensure they receive fair pay for their hard work. By knowing who qualifies for overtime, understanding how to calculate it, and knowing what steps to take if you’re owed back pay, you can safeguard your rights and ensure you’re fairly compensated.
If you have any doubts or need assistance, don’t hesitate to seek legal advice to protect your rights and secure the pay you’ve earned.
So Do You Have a Case?
Are you dealing with issues related to overtime pay or suspect your employer violated labor laws? At Lemberg Law, our experienced attorneys can help secure the compensation you deserve. Don’t wait—contact us today for a free consultation.
About the Author:
Sergei Lemberg is an attorney focusing on consumer law, class actions related to automotive issues, and personal injury litigation. With nearly two decades of experience, his areas of practice include Lemon Law (vehicle defects), Debt Collection Harassment, TCPA (illegal robocalls and texts), Fair Credit Reporting Act, Overtime claims, Personal Injury cases, and Class Actions. He has consistently been recognized as the nation's "most active consumer attorney." In 2020, Mr. Lemberg represented Noah Duguid before the United States Supreme Court in the landmark case Duguid v. Facebook. He is also the author of "Defanging Debt Collectors," a guide that empowers consumers to fight back against debt collectors and prevail, as well as "Lemon Law 101: The Laws That Lemon Dealers Don't Want You to Know."
Can my employer notify me midweek that I have mandatory overtime to complete by the end of the week?