Michigan Employment Law: Salary Vs. Hourly

By Theresa Custodio
In Michigan, salaried employees are covered by provisions in the Fair Labor Standards Act, while hourly workers are protected by state regulations.

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Workers in Michigan are classified as either exempt or nonexempt under the federal Fair Labor Standards Act. The act requires that most nonexempt employees be paid a minimum hourly wage and be paid overtime for hours worked in excess of 40 in a workweek. The law provides specific exemptions from these standards for particular groups of workers who earn a salary instead of an hourly wage.

Classification

An employee is exempt from FLSA wage and overtime regulations if her job is classified as executive, administrative or professional in nature. Outside salespeople and some computer employees are also exempt. To qualify for the exemption, an employee must meet specific tests concerning her duties. As an example, to be considered an executive, a person has to manage all or part of a company, direct at least two other employees and be authorized to hire and fire workers.

Employees who are nonexempt are manual laborers and other “blue-collar” workers who generally have duties that are repetitive, involve working with their hands, and require energy and physical skill. In most cases, nonmanagement jobs are nonexempt from FLSA, meaning those workers are covered by minimum wage and overtime standards.

Wages

A company may pay an employee a salary provided the amount of pay is at least $455 per week. Employees who are paid on an hourly basis must be paid a minimum of $7.40 per hour. Michigan’s minimum wage is greater than the federal standard of $7.25, in which case the higher rate is required to compensate an hourly worker. The FLSA does provide some exemptions to the hourly overtime law. Examples include some seasonal jobs in recreation or amusement, certain fishing operations, newspaper delivery and employees of small farms.

Overtime

Salaried employees are exempt from any overtime pay in most cases. Most workers receiving an hourly rate must be paid a bonus of 1 1/2 times their normal pay for any hours worked over 40 in a workweek. Exceptions to the overtime law include employees who are paid hourly and work in certain industries such as railroads, airlines, truck driving, some domestic services and farming.

Payment of Wages and Benefits

There is no distinction between salaried and hourly workers in terms of the physical payment of monies and benefits. The state requires that payment of wages, commissions, and benefits be made by check, money order or cash. Payments must be on a regular basis, which the state views as weekly, biweekly or monthly. An employer is required to pay workers in accordance with any written contract or company policy that may exist.

Limitations

Under the FLSA; there is no limit to the amount of hours per day, or the number of days per week, a salaried or hourly adult employee may be required to work. There is also no maximum number of overtime hours a person may work. Employers must receive special permission from the U.S. Department of Labor to utilize people working from home. The law also restricts the making of certain apparel items at home that are then sold by a company.

About the Author

Theresa Custodio is a Michigan-certified nurseryman with over 10 years experience. She has spent over five years working for the State of Michigan's Department of Environmental Quality writing permits and violation notices, which are published for public record. She has a Bachelor of Science degree from Eastern Michigan University with a major in biology and a minor in conservation and resource use.