Michigan Employment Law: Salary Vs. Hourly

Most people living in today's America have to help bring home the bacon. While in yesteryear, some women stayed at home to take care of the kids and manage the household, these days that role division is no longer a norm. For almost everybody, it's "hi-ho, ho-ho, off to work we go," working everyday while juggling other roles and responsibilities as best as possible. That makes employment law critical in American lives, regulating questions like minimum hourly wages, paid time off, work breaks, overtime and termination. Federal law covers some of these areas, and state laws can supplement them. If you live in Michigan, Michigan labor laws regulate the basic working conditions of both salaried employees, usually paid by the month, and those who work by the hour. Generally, the work laws apply to both groups, although minimum wage and overtime tend to impact hourly workers more than salaried ones.

Workers in the United States have two levels of protection in their employment lives. The first comes from federal law. These are laws enacted by the U.S. Congress that provide protection for everybody in the country. On top of this, each state legislature can also enact laws about employee rights. What happens if the state law conflicts with the federal law? If the protections offered employees under state and federal laws are different, the law more beneficial to employees is the law that must be applied.

If you are wondering why there is this two-tiered system of protection, it is to benefit the worker. Particular states have to balance the need to protect workers against the need of states to attract employers, and often times, the latter consideration can loom large. This is less an issue for federal laws, so these provide a base level of employee protection that sets the standard even in states trying hard to bring in new business.

Look to minimum wage laws for a good example of this two-tiered system of employment law protections. The federal government sets a minimum wage law applicable throughout the country. It is currently set at $7.25 an hour. That means that, wherever you live in America, you cannot be paid less than $7.25 for every hour you work unless you work in a job with tips, like in restaurant work. For a full-time employee working 40 hours a week, that minimum wage provides a weekly salary of $290 and an annual salary of $15,080. Many might say that this is not enough to live on anywhere in the country – and it has not increased since 2009 – yet it remains the base amount mandated.

Each state is free to set its own minimum wage laws. If a state's minimum wage law is higher, it is the higher amount that applies in that state. As of this time, 29 states have minimum wages that are higher than federal law, lead by Washington state that sets the hourly minimum at $11.50. In some states like California, with a state minimum wage of $11, individual cities can set higher minimum wages. San Francisco's minimum wage is currently $15 an hour. Other states have no laws about minimum wage or set an hourly wage lower than the federal government, in which case the federal rate applies.

So what do Michigan salary laws say about minimum wage in that state? Workers in Michigan get a higher minimum wage than under federal law. The minimum wage in Michigan is set at $9.25 an hour for adults. For employees who are not yet adults, like those who are 16 or 17 years old, the state minimum wage is set at $7.86 per hour. How about tipped employees in Michigan? Their minimum wage is $3.52, plus tips.

Overtime means the extra wages you get if you work more than a standard work week. What is considered standard full time in Michigan? Generally, across the country, a standard work week is considered to be 40 hours a week. Hours you work over and above that bring overtime wages. This is the case in Michigan.

Federal law provides overtime protection under the Fair Labor Standard's Act. These protections apply to those who work for private businesses with sales of more than $500,000 a year. The FLSA protections also apply to workers at companies engaged in commerce, to government employees and to workers at nonprofit entities. Michigan's overtime salary laws apply to any employee working for a company with at least two employees.

In Michigan, the amount of overtime pay is set at one and one-half times the hourly pay. For example, if an employee is earning $12 an hour, she will get $12 an hour for each of the first 40 hours she works in a week. However, she will earn $18 an hour for every hour over 40 hours she works in a single week.

Can an employer force you to work overtime in Michigan? Nothing in state law says that an employer must limit an employee's mandatory work hours to 40 or less hours in a week. The number of hours you work is considered a matter between you and your employer. However, it is regulated for some types of employment by the federal government where safety is involved, for example, for truck drivers and airline pilots.

Michigan law doesn't address many of the issues that you might wonder about when it comes to work time for an hourly employee. These center around the question of what hours will be counted as work time.

For example, if you are required to wait around as part of the job, do those waiting-around hours count as paid hours? How about hours you have to stay by the phone and available, typically called "on-call" hours? If you are not called, are you still paid for that time? Other gray areas that Michigan law doesn't address are travel time, sleeping hours while traveling for work and time spent in mandatory meetings, lectures and training. These issues apply to all hourly workers but don't generally apply to salaried workers unless they are eligible for overtime.

Some of these issues are addressed by the federal Fair Labor Standards Act. The federal rules are quite detailed, so you'll need to look up your particular question. For example, under the Portal-to-Portal Act (an addition to the FLSA), an employer doesn't have to include commute time (home-to-office travel) in hourly wages, but it must include the time an employee spends traveling from one workplace to another during a workday. And when an employer requires an employee to travel away from home over more than one workday, the time traveling (by car, airplane, etc.) is counted in hours worked only if the travel happens during the employee’s normal work hours. Travel outside of normal work hours need not be counted.

Read More: The Rights of Employees in Michigan for Hours

Is every employee entitled to overtime pay? Under both the federal law and Michigan salary laws, the answer is "no." Overtime for salaried employees in Michigan only applies to "eligible employees," defined as those who are not exempt. Most workers are non-exempt, including blue-collar workers and most workers who are not in management. Exempt employees include executives with salaries and elected officials.

If your job is classified as executive, administrative or professional, you may be in the exempt category. While in the past, you could fall into the exempt category under federal law if your salary was over $23,660 annually, the law was changed in 2016 to raise that cap to $47,476 annually. That change made over 100,000 more employees in Michigan eligible for overtime under the FSLA than were previously.

Many Michigan employers offer paid time off to their employees, including vacation time, sick days and holidays. This can be seen as essential to hire and keep the best employees, but the state doesn't have a hand in this. Michigan laws do not contain any provisions requiring employers to offer their employees these benefits. It leaves it to the discretion of the employers. What that means, essentially, is that trained and/or valued employees who have other job options are generally offered paid time off, while minimum wage, untrained workers are not.

Federal law does mandate some time off, but it isn't paid time off. If a Michigan employer has 50 or more employees, a federal law called the U.S. Family and Medical Leave Act (FMLA) requires that the employees get unpaid time off (up to 12 weeks per year) when they are ill, when they are taking care of someone in their family or when they are having or adopting children.) This law gives an employee the right to get her job back after the time-off period is over.

And federal law – the U.S. Uniformed Services Employment and Reemployment Rights Act – as well as Michigan law mandates that employers give employees time off to serve in the military. It comes with the right of reinstatement. Michigan employers also have to allow employees unpaid time off for military drills or instruction. Under the FMLA, military employees can get up to 26 weeks off a year (unpaid) to care for a family member injured while on the job.

How about Michigan employment laws regarding lunch breaks or other breaks at work? If you are a working adult in Michigan, the law does not mandate any breaks, meal or rest periods.

Can you be fired for no reason in Michigan? All Michigan employees are said to work at-will. This means that you can be fired at any time at the employer's discretion unless your employment contract provides additional protection. But it gives more protection than it sounds like it does.

The language "at-will" comes from the Michigan case of Toussaint v Blue Cross, 408 Mich 579 (1980) that discussed and analyzed the relationship between the employer and the employee. The court took a hard look at the employment policies of the employer. It focused on the question of whether a jury could conclude from written personnel policies and oral assurances that the employer promised to fire the employee only for cause. "For cause" is the opposite of at-will, and it indicates that an employee can be terminated only when the employer has good and sufficient reasons to terminate. Most collective bargaining agreements include "for cause" language, and the Toussaint court found that any employment contract for a set period of time is implied to be for good cause. If an employee was promised that she would only be fired for cause, a jury decides ultimately whether the employer's cause was good cause.

If you are truly an "at-will" employee, you can be fired for no reason but you cannot be fired for any reason. The employer cannot terminate you for certain specific reasons. For example, an employee cannot be fired for filing harassment allegations against the company or other employees in the company. She cannot be fired for taking unpaid leave under the federal laws. Nor can she be fired for bringing an action against the company for a violation of the laws, like filing a claim for unpaid wages or overtime, or bringing an OSHA complaint. Likewise, employees in Michigan cannot be terminated because off race, gender, age, disability or religion.