{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan/json", "type": "application/json" } ], "data": { "topic": "wage-and-hour", "state": "michigan", "frontmatter": { "title": "Wage and Hour Law in Michigan", "description": "A question-by-question summary of Michigan wage and hour law, covering the Improved Workforce Opportunity Wage Act minimum wage of $13.73 that rises to $15.00 on January 1, 2027 and is CPI-indexed after that, the weekly-only overtime rule, the absence of any adult meal-or-rest-break mandate, the Payment of Wages and Fringe Benefits Act rules on next-payday final pay backed by an administrative 10% annual penalty rather than an automatic waiting-time penalty, semi-monthly paydays and itemized pay statements, the economic-reality test for worker classification, and a tipped cash wage that rises from 40% of the minimum wage in 2026 to 50% by 2031, which 2025 PA 1 preserved but narrowed rather than eliminating the partial tip credit.", "state": "Michigan", "lastReviewed": "2026-07-15", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "minimumWageFloor": "indexedHigh", "bottomLine": "Michigan sets an above-federal minimum wage — $13.73 an hour, rising to $15.00 on January 1, 2027 and then indexed to inflation — with weekly-only overtime, no adult meal-or-rest-break mandate, next-payday final pay enforced administratively through a 10% annual penalty rather than an automatic waiting-time penalty, the economic-reality test for worker status, and a tipped cash wage that rises from 40% to 50% of the minimum wage by 2031 — preserving but narrowing the partial tip credit rather than eliminating it.", "keyLaw": "Improved Workforce Opportunity Wage Act, MCL 408.931 et seq.; Payment of Wages and Fringe Benefits Act, MCL 408.471 et seq.", "dailyOvertime": "weeklyOnly", "mealRestBreaks": "none", "finalPayTiming": "nextPayday", "latePayPenalty": "adminEnforcementOnly", "payFrequency": "semiMonthly", "wageStatement": "detailedStatutoryList", "workerClassificationTest": "economicRealities", "tipCredit": "partialTipCredit", "currentAsOf": "2026-01-01" }, "about": [ "Michigan wage and hour law", "Michigan minimum wage and the Improved Workforce Opportunity Wage Act indexing formula", "Michigan overtime and meal-and-rest breaks", "Michigan final pay and Payment of Wages and Fringe Benefits Act enforcement", "Michigan worker classification (the economic-reality test)", "Michigan tip credit" ], "translations": [ { "language": "中文", "status": "planned" }, { "language": "Español", "status": "planned" }, { "language": "Português", "status": "planned" }, { "language": "Deutsch", "status": "planned" } ] }, "questions": [ { "slug": "minimum-wage", "label": "What is the state minimum wage, and how does it relate to the federal floor?", "heading": "What is the minimum wage?", "answerText": "Michigan has a single statewide minimum wage that sits well above the federal floor of $7.25 per hour. Under the Improved Workforce Opportunity Wage Act the rate is $13.73 per hour beginning January 1, 2026, and it climbs to $15.00 on January 1, 2027. After that the wage does not freeze: beginning in October 2027 the state treasurer recalculates the rate each year and raises it by the rate of inflation, so the floor moves with the Midwest CPI rather than by a fresh vote. One built-in brake applies — a scheduled indexed increase does not take effect if the state's unemployment rate was 8.5% or higher for the preceding year. And there is no higher local minimum wage to check: a Michigan local government may not require an employer to pay more than the state (or applicable federal) rate.", "sources": [ { "id": "q1-mcl-408-934-schedule", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934", "citation": "MCL § 408.934(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934", "proposition": "Section 4 of the Improved Workforce Opportunity Wage Act sets the Michigan minimum wage at $13.73 per hour beginning January 1, 2026 and $15.00 per hour beginning January 1, 2027.", "verbatimQuote": "Subject to the exceptions specified in this act, the minimum hourly wage rate is: (a) Beginning February 21, 2025, $12.48. (b) Beginning January 1, 2026, $13.73. (c) Beginning January 1, 2027, $15.00.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q1-mcl-408-934-schedule" }, { "id": "q1-mcl-408-934-index", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934", "citation": "MCL § 408.934(2).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934", "proposition": "After the scheduled increases reach $15.00, section 4 indexes the Michigan minimum wage to inflation, directing the state treasurer to calculate an adjusted rate each October beginning in 2027.", "verbatimQuote": "Every October beginning in October, 2027, the state treasurer shall calculate an adjusted minimum wage rate. The adjustment must increase the minimum wage by the rate of inflation.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q1-mcl-408-934-index" }, { "id": "q1-mcl-408-934-suspension", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934", "citation": "MCL § 408.934(3).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934", "proposition": "A scheduled indexed increase to the Michigan minimum wage is suspended when the state's unemployment rate was 8.5% or higher for the year immediately preceding the increase.", "verbatimQuote": "An increase in the minimum hourly wage rate as prescribed in subsection (2) does not take effect if the unemployment rate, as determined by the Bureau of Labor Statistics of the United States Department of Labor, for this state is 8.5% or greater for the year immediately preceding the year of the prescribed increase.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q1-mcl-408-934-suspension" }, { "id": "q1-mcl-123-1385-preemption", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 123.1385", "citation": "MCL § 123.1385.", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-123-1385", "proposition": "A Michigan local government may not require an employer to pay a wage higher than the state minimum wage (or the applicable federal minimum wage), so there is no higher local minimum wage for private employers.", "verbatimQuote": "A local governmental body shall not adopt, enforce, or administer an ordinance, local policy, or local resolution requiring an employer to pay to an employee a wage higher than the state minimum hourly wage rate determined under section 4 of the workforce opportunity wage act, 2014 PA 138, MCL 408.414, or, if applicable to the employer, the minimum wage provisions of the fair labor standards act of 1938, 29 USC 201 to 219, unless those federal minimum wage provisions would result in a lower minimum hourly wage than provided under state law.", "date": "2015-06-30", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q1-mcl-123-1385-preemption" } ] }, { "slug": "overtime", "label": "Does the state require daily overtime beyond the federal 40-hour weekly rule?", "heading": "When is overtime owed?", "answerText": "Only on a weekly basis, as a general rule. The Improved Workforce Opportunity Wage Act requires one-and-one-half times the regular rate for hours worked in a workweek over 40, mirroring the federal rule; it sets no general daily-overtime threshold and no double-time tier. A Michigan employee who works long individual days but 40 or fewer hours in the week is not owed state overtime, the opposite of the daily-overtime regime in states like California. The narrow exceptions the act does carry are sector-specific and mostly public-sector: alternative work periods for public fire-protection and law-enforcement personnel, a 14-day work-period option for public hospitals and residential-care institutions that does pick up an over-eight-hours-in-a-day component, and the standard executive, administrative, and professional exemptions — so for the ordinary private workforce the operative rule is the 40-hour week.", "sources": [ { "id": "q2-mcl-408-934a-overtime", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934a", "citation": "MCL § 408.934a(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934a", "proposition": "Section 4a(1) requires overtime at 1-1/2 times the regular rate for hours worked in a workweek over 40, with no general daily-overtime threshold — so Michigan follows the federal weekly overtime standard for the ordinary workforce.", "verbatimQuote": "Except as otherwise provided in this act, an employee shall receive compensation at not less than 1-1/2 times the regular rate at which the employee is employed for employment in a workweek in excess of 40 hours.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q2-mcl-408-934a-overtime" }, { "id": "q2-mcl-408-934a-hospital", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934a", "citation": "MCL § 408.934a(3)(b).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934a", "proposition": "Section 4a(3) gives public hospitals and residential-care institutions a 14-day work-period option under which overtime is owed for hours over 8 in a workday and over 80 in the 14-day period — a narrow public-sector exception, not a general daily-overtime rule.", "verbatimQuote": "For the employee's employment in excess of 8 hours in a workday and in excess of 80 hours in the 14-day period, the employee receives compensation at a rate of 1-1/2 times the regular rate, which shall be not less than the statutory minimum hourly rate at which the employee is employed.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q2-mcl-408-934a-hospital" } ] }, { "slug": "meal-rest-breaks", "label": "Are meal and rest breaks mandated, and are they paid?", "heading": "Are breaks required?", "answerText": "No — not for adults. Michigan has no statute requiring meal or rest breaks for adult private-sector employees; break policy is left to the employer and to the FLSA rules on which breaks count as paid working time. The only Michigan break mandate is for minors: the youth employment law requires a 30-minute meal and rest interval for a minor who works more than five continuous hours. For the adult workforce there is no state entitlement to a meal or rest break and no missed-break premium.", "sources": [ { "id": "q3-mcl-409-112-minors", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 409.112", "citation": "MCL § 409.112.", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-409-112", "proposition": "Michigan mandates a meal-and-rest break only for minors — a 30-minute interval after five continuous hours of work — and imposes no meal-or-rest-break requirement on adult employees.", "verbatimQuote": "A minor shall not be employed for more than 5 hours continuously without an interval of at least 30 minutes for a meal and rest period.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q3-mcl-409-112-minors" } ] }, { "slug": "final-pay", "label": "When must final wages be paid on separation, and what is the penalty for paying late?", "heading": "When is final pay due?", "answerText": "Michigan fixes no calendar deadline for final wages. An employer must pay a voluntarily departing employee all wages earned and due as soon as the amount can, with due diligence, be determined, and must pay a discharged employee immediately — a word the same subsection then qualifies with the identical due-diligence clause. Because neither subsection names a payday, final pay in practice converges on the next regularly scheduled pay cycle once the amount is determinable, rather than on any statutory day-of-separation deadline. Two narrow carve-outs adjust the timing: a voluntarily departing hand-harvest worker must be paid within three days, and a contract worker whose pay cannot be fixed until the contract ends is paid in full at that termination. Michigan has no California-style automatic waiting-time penalty; late payment is enforced administratively — the department orders the unpaid wages plus a penalty at 10% annually running from the date the employer is notified of the complaint until payment is made, and may add exemplary damages of up to twice the wages due for a flagrant or repeated violation.", "sources": [ { "id": "q4-mcl-408-475-quit", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.475", "citation": "MCL § 408.475(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-475", "proposition": "Section 5 requires an employer to pay a voluntarily departing employee all wages earned and due as soon as the amount can with due diligence be determined — with no bright-line calendar deadline — and to pay a departing hand-harvest worker within three days.", "verbatimQuote": "An employer shall pay to an employee voluntarily leaving employment all wages earned and due, as soon as the amount can with due diligence be determined. However, an employer shall pay all wages earned and due to an employee engaged in any phase of the hand harvesting of crops as soon as the amount can, with due diligence, be determined, but, in any event, not later than 3 days after the employee's voluntary termination of employment.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q4-mcl-408-475-quit" }, { "id": "q4-mcl-408-475-discharge", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.475", "citation": "MCL § 408.475(2).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-475", "proposition": "Section 5 says a discharged employee must be paid immediately, but qualifies that word with the same due-diligence clause, so the statute sets no same-day calendar deadline.", "verbatimQuote": "An employer shall immediately pay to an employee who has been discharged from employment all wages earned and due, as soon as the amount can with due diligence be determined.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q4-mcl-408-475-discharge" }, { "id": "q4-mcl-408-475-contract", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.475", "citation": "MCL § 408.475(3).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-475", "proposition": "Section 5(3) carves out a contract worker whose pay cannot be determined until the contract ends: the employer estimates wages under section 2 in the interim and makes final payment in full at the termination of the contract.", "verbatimQuote": "This section shall not apply to an employee working under contract who either voluntary leaves employment or is discharged from employment if the amount due cannot be determined until the termination of the contract. In such cases, the employer shall pay to the employee under the provisions of section 2 all wages earned by the employee as nearly as they can be estimated. Final payment shall be made in full at the termination of the contract.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q4-mcl-408-475-contract" }, { "id": "q4-mcl-408-488-penalty", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.488", "citation": "MCL § 408.488(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-488", "proposition": "Section 18 makes late payment an administrative matter: the department orders the unpaid wages plus a 10%-a-year penalty running from the date the employer is notified of a complaint until payment is made — not an automatic waiting-time penalty.", "verbatimQuote": "The department shall order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay the following: (a) Wages due to the employee. (b) Fringe benefits due to or on the behalf of the employee in accordance with the terms set forth in the written contract or written policy. (c) A penalty at the rate of 10% annually on the wages and fringe benefits due beginning at the time the employer is notified that a complaint has been filed and ending when payment is made.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q4-mcl-408-488-penalty" }, { "id": "q4-mcl-408-488-exemplary", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.488", "citation": "MCL § 408.488(2).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-488", "proposition": "Section 18 lets the department order exemplary damages of up to twice the wages and fringe benefits due when a violation is flagrant or repeated.", "verbatimQuote": "The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay to the employee exemplary damages of not more than twice the amount of the wages and fringe benefits which were due, if the violation is flagrant or repeated.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q4-mcl-408-488-exemplary" } ] }, { "slug": "pay-frequency", "label": "How often must workers be paid?", "heading": "How often must workers be paid?", "answerText": "At least semi-monthly by default. The Payment of Wages and Fringe Benefits Act sets a twice-a-month baseline — wages for the first half of a month paid by the first of the next month, and wages for the second half paid by the fifteenth. The act then supplies safe harbors so a common payroll cadence still complies: an employer that runs a regularly scheduled weekly or biweekly payday satisfies the statute if it pays within fourteen days of the end of the work period, and an employer on a monthly pay period complies if it pays within fifteen days of the period's end. An employer may always pay more often than the statute requires.", "sources": [ { "id": "q5-mcl-408-472-frequency", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.472", "citation": "MCL § 408.472(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-472", "proposition": "Section 2 sets a semi-monthly default payday — first-half wages by the first of the next month, second-half wages by the fifteenth.", "verbatimQuote": "an employer shall pay the following to an employee: (a) On or before the first day of each calendar month, the wages earned by the employee during the first 15 days of the preceding calendar month. (b) On or before the fifteenth day of each calendar month, the wages earned by the employee during the preceding calendar month from the sixteenth day through the last day.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q5-mcl-408-472-frequency" }, { "id": "q5-mcl-408-472-safeharbor", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.472", "citation": "MCL § 408.472(3)-(4).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-472", "proposition": "Section 2 lets an employer keep a regularly scheduled weekly or biweekly payday if wages are paid within fourteen days of the end of the work period, and a monthly pay period if wages are paid within fifteen days of the period's end.", "verbatimQuote": "An employer who has established a regularly scheduled weekly or biweekly payday is in compliance with subsection (1) if both of the following conditions are met: (a) Wages are paid to the employee on the established regularly recurring payday. (b) The payday occurs on or before the fourteenth day following the end of the work period in which the wages are earned. (4) An employer who has established a regularly scheduled monthly pay period is in compliance with subsection (1) if the employer pays to the employee, within 15 days after the end of a monthly pay period, all wages earned during the monthly pay period.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q5-mcl-408-472-safeharbor" } ] }, { "slug": "pay-statement", "label": "What must a Michigan pay statement show?", "heading": "What must a pay statement show?", "answerText": "Michigan requires an itemized pay statement at each payment of wages. The Payment of Wages and Fringe Benefits Act directs the employer to furnish each employee, at the time of payment, a statement listing the hours worked, the gross wages paid, the pay period covered, and a separate itemization of deductions — and, for a hand harvester paid by the piece, the number of units harvested. This is a defined statutory list rather than a general recordkeeping gesture, so a bare check without the itemized breakdown does not comply. The one carve-out is the hours-worked component: an employer need not report hours worked for bona fide executive, administrative, and professional employees, public elective officials, and political appointees.", "sources": [ { "id": "q6-mcl-408-479-statement", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.479", "citation": "MCL § 408.479(2).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-479", "proposition": "Section 9 requires the employer to furnish each employee, at the time of payment, a statement showing hours worked, gross wages, the pay period, and a separate itemization of deductions.", "verbatimQuote": "An employer shall furnish each employee at the time of payment of wages a statement of the hours worked by the employee, the gross wages paid, identification of the pay period for which payment is being made, a separate itemization of deductions, and for each hand harvester paid on a piece work basis furnish a statement of the total number of units harvested by the employee.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q6-mcl-408-479-statement" }, { "id": "q6-mcl-408-479-exceptions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.479", "citation": "MCL § 408.479(4).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-479", "proposition": "Section 9(4) excuses the hours-worked component of the wage statement for employees in a bona fide executive, administrative, or professional capacity, public elective officials, and political appointees.", "verbatimQuote": "Employers need not maintain payroll records indicating the total hours worked by, or furnish wage statements of hours worked by: (a) An employee employed in a bona fide executive, administrative, or professional capacity, including an employee employed in the capacity of academic administrative personnel or teacher in an elementary or secondary school, except that an employee of a retail or service establishment shall not be excluded from the definition of employee employed in a bona fide executive or administrative capacity because of the number of hours in the employee's workweek which the employee devotes to activities not directly or closely related to the performance of executive or administrative activities, if less than 40% of the employee's hours in the workweek are devoted to those activities. (b) An individual who holds a public elective office. (c) A political appointee of a person holding public elective office or a political appointee of a public body.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q6-mcl-408-479-exceptions" } ] }, { "slug": "worker-classification", "label": "What test does the state use to classify a worker as an employee or contractor?", "heading": "Employee or independent contractor?", "answerText": "For wage claims, Michigan uses the economic reality test — not the common-law right-of-control test, and not the IRS-style withholding-and-control factor test an employer might reach for. In Buckley v. Professional Plaza Clinic Corp., a Payment of Wages and Fringe Benefits Act case, the Court of Appeals held that a lower court clearly erred by failing to apply the economic reality test to decide whether a worker was an employee or an independent contractor. That test weighs the totality of the circumstances across four factors — control of the worker's duties, payment of wages, the right to hire, fire, and discipline, and whether the duties are an integral part of the employer's business — and no single factor decides the question. So a worker's status for a wage claim turns on those economic-reality factors, not on a contract label or the parties' tax treatment.", "sources": [ { "id": "q7-buckley-economic-reality", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)", "citation": "Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).", "url": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/", "deepLink": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/#:~:text=Thus%2C%20we%20conclude%20that%20the,misapplied%2C%20the%20economic%20reality%20test.", "proposition": "Buckley holds that a court deciding employee-versus-contractor status under the Payment of Wages and Fringe Benefits Act clearly errs when it fails to apply the economic reality test.", "verbatimQuote": "Thus, we conclude that the circuit court clearly erred because it failed to apply, or misapplied, the economic reality test.", "date": "2008-10-02", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q7-buckley-economic-reality" }, { "id": "q7-buckley-four-factor", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)", "citation": "Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).", "url": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/", "deepLink": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/#:~:text=(1)%20%5Bthe%5D%20control%20of%20a,accomplishment%20of%20a%20common%20goal.", "proposition": "Buckley states the four economic-reality factors — control of duties, payment of wages, the right to hire, fire, and discipline, and whether the duties are an integral part of the employer's business — weighed as a totality of the circumstances.", "verbatimQuote": "(1) [the] control of a worker's duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline, and (4) the performance of the duties as an integral part of the employer's business towards the accomplishment of a common goal.", "date": "2008-10-02", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q7-buckley-four-factor" }, { "id": "q7-buckley-no-single-factor", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "Buckley v. Professional Plaza Clinic Corp., 281 Mich App 224 (2008)", "citation": "Buckley v. Prof'l Plaza Clinic Corp., 281 Mich. App. 224 (2008).", "url": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/", "deepLink": "https://www.courtlistener.com/opinion/1990616/buckley-v-professional-plaza-clinic-corp/#:~:text=Under%20this%20test%2C%20no%20one,as%20each%20individual%20case%20requires.", "proposition": "Buckley holds that no single economic-reality factor is dispositive and the list is nonexclusive, so classification turns on the totality of the circumstances.", "verbatimQuote": "Under this test, no one factor is dispositive; indeed, the list of factors is nonexclusive and a court may consider other factors as each individual case requires.", "date": "2008-10-02", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q7-buckley-no-single-factor" } ] }, { "slug": "tip-credit", "label": "Does the state allow a tip credit against the cash minimum wage?", "heading": "Is a tip credit allowed?", "answerText": "Yes — a partial one that is being narrowed, not eliminated. The Improved Workforce Opportunity Wage Act lets an employer of tipped employees pay a reduced cash wage set as a percentage of the standard minimum, and that percentage rises on a fixed schedule: 40% of the minimum beginning January 1, 2026, climbing to 50% by January 1, 2031. At the 2026 minimum of $13.73, the 40% cash wage is $5.49 an hour. The reduced rate is not automatic: it applies only if the employee's own gratuities equal or exceed the gap to the full minimum, the tips are proven through the employee's federal FICA declaration and retained by the employee (subject to voluntary sharing within the chain of service), and the employer informed the employee of the tip-credit provisions in writing and obtained written consent at or before hire. This preserved-but-capped structure is what 2025 PA 1 enacted after the Mothering Justice reset, in place of the full phase-out the reinstated initiative would have produced. Tips themselves stay with the worker: gratuities remain the property of the employee who receives them, whichever wage the employer pays.", "sources": [ { "id": "q8-mcl-408-934d-conditions", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934d", "citation": "MCL § 408.934d(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934d", "proposition": "Section 4d makes the reduced tipped cash wage available only if all statutory conditions are met — the employee receives gratuities that equal or exceed the gap to the full minimum, the gratuities are proven through the employee's FICA declaration and retained by the employee, and the employer gave written notice and obtained written consent at or before hire.", "verbatimQuote": "The minimum hourly wage rate of an employee must be established as provided for under subsection (2) if all of the following conditions are met: (a) The employee receives gratuities in the course of the employee's employment. (b) The gratuities described in subdivision (a) equal or exceed the difference between the minimum hourly wage rate established under subsection (2) and the minimum hourly wage established under section 4. (c) The gratuities are proven gratuities as indicated by the employee's declaration for purposes of the federal insurance contribution act, 26 USC 3101 to 3128. (d) Except as otherwise provided in this subdivision, the entirety of the gratuities are retained by the employee who receives them. This subdivision does not prohibit an employee from voluntarily sharing the employee's gratuities with another employee if the other employee is directly or indirectly part of the chain of service and the other employee's duties are not primarily managerial or supervisory. (e) The employee's employer informed the employee of the provisions of this section, in writing, at or before the time of hire, and the employee gave written consent.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q8-mcl-408-934d-conditions" }, { "id": "q8-mcl-408-934d-percentages", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934d", "citation": "MCL § 408.934d(2).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934d", "proposition": "Section 4d sets the tipped-employee cash wage as a percentage of the standard minimum — 40% beginning January 1, 2026, rising to 50% by January 1, 2031 — preserving a partial tip credit rather than eliminating it.", "verbatimQuote": "The minimum hourly wage rate of an employee described in subsection (1) is as follows: (a) Beginning February 21, 2025, 38% of the minimum hourly wage rate established under section 4. (b) Beginning January 1, 2026, 40% of the minimum hourly wage rate established under section 4. (c) Beginning January 1, 2027, 42% of the minimum hourly wage rate established under section 4. (d) Beginning January 1, 2028, 44% of the minimum hourly wage rate established under section 4. (e) Beginning January 1, 2029, 46% of the minimum hourly wage rate established under section 4. (f) Beginning January 1, 2030, 48% of the minimum hourly wage rate established under section 4. (g) Beginning January 1, 2031, 50% of the minimum hourly wage rate established under section 4.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q8-mcl-408-934d-percentages" }, { "id": "q8-mcl-408-934d-ownership", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.934d", "citation": "MCL § 408.934d(4).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-934d", "proposition": "Section 4d provides that gratuities remain the property of the employee who receives them, whether the employer pays the tipped cash wage or the full section-4 minimum.", "verbatimQuote": "Except as otherwise provided under subsection (1)(d), gratuities remain the property of the employee who receives them, regardless of whether the employee's employer pays the employee the minimum hourly wage rate established under subsection (2) or the minimum hourly wage rate established under section 4.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q8-mcl-408-934d-ownership" } ] }, { "slug": "enforcement", "label": "How is wage-and-hour law enforced, and can employees sue?", "heading": "How is it enforced?", "answerText": "Each of the two wage statutes carries its own enforcement machinery. For a minimum-wage or overtime shortfall, the Improved Workforce Opportunity Wage Act lets the affected employee choose: bring a direct civil action, within three years, to recover the underpayment plus an equal amount as liquidated damages, costs, and attorney fees — or file a claim with the state director, who investigates and, if voluntary compliance fails, may bring the civil action on the employee's behalf. For a final-pay, pay-frequency, or pay-statement claim, the Payment of Wages and Fringe Benefits Act supplies a departmental complaint: the employee may file a written complaint with the department within twelve months of the alleged violation, and the department investigates, determines the merits, and orders relief. The department's monetary teeth — the 10% annual penalty and up-to-double exemplary damages — attach to violations of the wage-payment sections it enumerates, which include final pay and pay frequency; the pay-statement duty sits outside that penalty list and is backed instead by the act's general civil penalty.", "sources": [ { "id": "q9-mcl-408-939-private", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.939", "citation": "MCL § 408.939(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-939", "proposition": "Section 9 lets an employee affected by a minimum-wage or overtime violation choose, within three years, between a private civil action for the shortfall plus an equal amount as liquidated damages, costs, and attorney fees, and filing a claim with the director.", "verbatimQuote": "If an employer violates this act, the employee affected by the violation, at any time within 3 years, may do any of the following: (a) 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 this act and an equal additional amount as liquidated damages together with costs and reasonable attorney fees as are allowed by the court. (b) File a claim with the director who shall investigate the claim.", "date": "2025-02-21", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q9-mcl-408-939-private" }, { "id": "q9-mcl-408-481-complaint", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.481", "citation": "MCL § 408.481(1).", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-481", "proposition": "Section 11 lets a Payment of Wages and Fringe Benefits Act employee file a written complaint with the department within twelve months of the alleged violation, after which the department investigates and determines the merits.", "verbatimQuote": "An employee who believes that his or her employer has violated this act may file a written complaint with the department within 12 months after the alleged violation.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q9-mcl-408-481-complaint" }, { "id": "q9-mcl-408-488-scope", "authorityType": "primary-law", "tier": "primary-source-backed", "title": "MCL § 408.488", "citation": "MCL § 408.488.", "url": "https://legislature.mi.gov/Laws/MCL?objectName=mcl-408-488", "proposition": "Section 18's department-ordered remedies — unpaid wages, the 10% annual penalty, and exemplary damages of up to twice the amount due — reach violations of the enumerated wage-payment sections (2 through 8, which include pay frequency and final pay); a separate general civil penalty of up to $1,000 reaches any violation of the act.", "verbatimQuote": "The department shall order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay the following: (a) Wages due to the employee. (b) Fringe benefits due to or on the behalf of the employee in accordance with the terms set forth in the written contract or written policy. (c) A penalty at the rate of 10% annually on the wages and fringe benefits due beginning at the time the employer is notified that a complaint has been filed and ending when payment is made. (2) The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay to the employee exemplary damages of not more than twice the amount of the wages and fringe benefits which were due, if the violation is flagrant or repeated. (3) The department may order an employer who violates section 2, 3, 4, 5, 6, 7, or 8 to pay attorney costs, hearing costs, and transcript costs. (4) The department may assess a civil penalty of not more than $1,000.00 against an employer who violates this act, which civil penalty shall be credited to the general fund of this state.", "date": "1978-06-13", "anchor": "https://openagreements.org/practice-guides/wage-and-hour/us/michigan#src-q9-mcl-408-488-scope" } ] } ] } }