(650) 332-8623Michigan Overtime Laws: Your Guide to Rates, Statutes, Calculations, and More (2025)
This guide has everything you need to know about Michigan’s overtime laws for 2025, including rates, thresholds, statutes, and much more.
Michigan Overtime Rates and Statutes
1.5x
Michigan's Primary Overtime Pay Rate
In Michigan, overtime regulations follow the guidelines of the Improved Workforce Opportunity Wage Act. Non-exempt employees are entitled to overtime pay at 1.5x their regular hourly rate for hours worked over 40 in a 7-day workweek.
40 Hours / week
Threshold to Receive Overtime in Michigan
In Michigan, an employee’s eligibility for overtime pay is determined by their hourly and salary thresholds, as per the Fair Labor Standards Act (FLSA).
Hourly threshold: Non-exempt employees who work more than 40 hours a week are eligible for overtime pay of 1.5x their regular hourly wage.
Salary threshold: Non-exempt employees earning not more than $844 per week (or $1,128 per week) starting January 1, 2025, must be paid overtime for hours worked beyond 40 in a week.
Mich. Comp. Laws § 408.414a
The Main Overtime Statute in Michigan
Michigan’s overtime laws are based on the Michigan Compiled Laws (MCL) Section 408.414a, a provision in the Workforce Opportunity Wage Act outlining the Michigan’s overtime compensation requirements. It includes provisions on overtime pay rates, exemptions, compensatory time, recordkeeping, and enforcement.
LARA
The Michigan Department of Licensing and Regulatory Affairs (LARA) ensures compliance with the state’s wage and hour laws and overtime pay requirements. This agency also investigates all wage and overtime complaints and violations.
How to Calculate Overtime Pay in Michigan
Calculating overtime pay in Michigan involves determining the employee’s regular hourly rate and applying the 1.5x overtime multiplier for hours worked beyond 40 in a workweek.
Identify the employee’s base pay rate. For example, a salaried employee receives $50,000 per year. Divide the annual salary by 52, which equals the number of weeks per year. And then divide it by the number of hours in a workweek (40 hours).
$50,000 annual salary ÷ 52 weeks ÷ 40 hours = $24.04 per hour base pay rate
Now, multiply the base pay rate by 1.5 to calculate the overtime pay rate.
$24.04 x 1.5 = $36.06 per hour overtime rate
Determine the employee’s overtime hours. For example, if an employee worked 45 hours, they worked five overtime hours. Multiply the overtime hours by the overtime rate:
5 overtime hours x $36.06 per hour overtime rate = $180.30 overtime pay
Add the overtime pay to the regular pay to calculate the employee’s total weekly earnings. Using the example above:
- Regular pay: 40 hours x $24.04 = $961.60
- Overtime pay: $180.30
- Total weekly pay: $961.60 + $180.30 = $1,141.90
For tipped workers, the overtime rate is calculated using the full minimum wage (not the tipped minimum wage).
For example, the minimum wage in Michigan in 2024 is $10.33 per hour ($12.48 per hour beginning February 21, 2025).
- Regular rate: $10.33 per hour
- Overtime rate: $10.33 × 1.5 = $15.50 per hour
- The employer pays the difference between the overtime rate and the tipped minimum wage.
For piece-rate or commissioned employees, calculate the regular hourly rate by dividing the total weekly earnings by the total hours worked. Then, apply the 1.5x multiplier for overtime hours.
If there are any non-discretionary bonuses or service charges, they must also be included when calculating the regular rate for overtime purposes.
Who's Eligible For Overtime Pay in Michigan?
In Michigan, most employees are eligible and automatically qualify for overtime pay under state and federal laws.
Salaried employees earning below the state and federal salary threshold are entitled to overtime pay.
Starting January 1, 2025, the salary threshold will increase from $43,888 to $58,656 annually.
Starting January 1, 2025, salaried employees will be exempt from Michigan’s overtime laws if they earn over $58,656 per year or $1,128 per week.
Moreover, they may not be eligible for overtime if they fall under exemptions like executive, professional, or administrative roles.
These roles often involve decision-making, high levels of responsibility, and duties requiring advanced knowledge or expertise. Moreover, their work is usually not time-dependent (e.g., clocking in/out) but results-oriented, making traditional overtime rules less applicable.
Executive, administrative, and professional employees have significant autonomy in their roles and control over their work schedules, differentiating them from non-exempt hourly workers.
Employees in these roles are usually compensated with higher salaries, presumed to account for the additional time and effort required beyond a standard 40-hour workweek.
Under the Fair Labor Standards Act and state labor laws, public office holders or elected officials, such as mayors, governors, city council members, judges, and legislators, are exempt from overtime pay in Michigan. This is due to the unique nature of their public office roles and responsibilities, often requiring irregular schedules and extended hours.
Agricultural workers are exempt from overtime pay in Michigan due to the seasonal nature of agricultural work and varying hours, depending on weather and crop needs.
Due to the nature of seasonal work, employees of seasonal amusement establishments, such as amusement parks, summer camps, and fairs, are exempt from overtime pay in Michigan. Seasonal amusement establishments typically operate for a limited time during the year, often less than seven months.
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Michigan vs. Federal Overtime Laws Compared
40 Hours / workweekMichigan Overtime Threshold
Michigan follows the same standard as the federal law, with no additional hourly threshold requirements.
Non-exempt employees must receive overtime pay for hours worked beyond the regular 40 hours per workweek.
40 Hours /weekFederal Overtime Threshold
Under the federal Fair Labor Standards Act (FLSA), all non-exempt employees are entitled to overtime pay for all hours worked in excess of 40 per workweek.
For the FLSA’s purposes, a “workweek” is defined as a fixed and regularly-occurring period of 168 hours, or seven consecutive 24-hour days. These workweeks may be set for any seven-day stretch and do not need to correspond to or coincide with ordinary calendar weeks.
1.5xMichigan Overtime Rate
In Michigan, the standard overtime pay rate is 1.5 times an employee’s regular hourly wage for hours worked over 40 in a workweek.
1.5xFederal Overtime Rate
The FLSA stipulates overtime rates of 1.5 times an employee’s regular rate of pay. There are no additional or higher rates for working more hours or for specified professions.
$58,656 / yearMichigan Overtime Threshold for Salaried Employees
The minimum overtime threshold in Michigan will increase to $58,656 annually (or $1,128 per week) on January 1, 2025, from the current $43,888 annually (or $844 per week).
$58,656 / yearFederal Overtime Threshold for Salaried Employees
Starting January 1, 2025, the federal wage threshold exempting roles from overtime pay is set at $1,128 per week, equivalent to $58,656 per year.
The FLSA also stipulates special thresholds for salaried employees in certain territories as well, with much lower thresholds (between $380 and $455 per week) for Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa.
MichiganRoles Exempt from Overtime
In Michigan, these roles are exempt from overtime under the FLSA and Michigan labor law requirements:
- Executive, administrative, and professional employees
- Public office holders
- Police/fire chiefs, deputy chiefs, and administrative supervisors
- Volunteers and contracted/independent personnel
- Agricultural workers
- Fishing and seafood processing workers
- Small newspaper employees (circulation of fewer than 4,000)
- Motor carrier employees (loaders, drivers, and mechanics)
- Teachers
- Live-in domestic workers
- Employees of seasonal amusement establishments
FederalRoles Exempt from Overtime
Federal overtime law exempts certain roles from overtime pay:
- Executive, administrative, and professional employees earning more than the threshold
- Computer-related employees
- Outside sales employees
- Highly compensated workers earning more than $151,164 per year, of which at least $1,128 must be paid on a salary or fee basis per week
Misconceptions About Michigan Overtime Laws
Many people believe that all salaried employees in Michigan are automatically exempt from overtime.
Not every salaried employee is exempt from receiving overtime pay.
Beginning January 1, 2025, employees earning more than $58,656 annually ($1,128 per week) will be exempt from overtime pay.
Salaried employees who fulfill the job duties requirements for executive, administrative, or professional roles under the FLSA are also exempt from overtime.
Employees are qualified for overtime pay for hours worked beyond the regular eight hours per shift/workday.
Michigan overtime laws follow the FLSA, which requires overtime pay only when the number of hours worked exceeds 40 in a single workweek, regardless of the number of hours worked in a single day.
Employers don’t need to pay overtime hours they did not pre-approve.
Employers must pay overtime for all hours worked over 40 in a week, regardless of whether those hours were pre-approved. However, employers can discipline employees for working unauthorized overtime.
In Michigan, employees can forgo their entitlement to overtime pay.
Under Michigan and federal law, overtime rules are mandatory, and any agreement to work overtime without pay is invalid.
Non-exempt employees working on holidays or weekends are entitled to double-time pay.
In Michigan, state law does not mandate double-time pay for specific circumstances. The standard requirement is that non-exempt employees receive overtime compensation at 1.5 times their hourly rate for any hours worked over 40 in a workweek.
However, employers may offer double-time pay for working on holidays or weekends as part of their company policies or through collective bargaining agreements. These are at the employer’s discretion and are not required by Michigan law.
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Penalties for Overtime Noncompliance in MI
Up to $1,000 / violationOvertime Law Violations
Employers who violate Michigan overtime laws for one or multiple employees can be fined up to $1,000 per violation.
Back WagesOvertime Law Violations
Employers found to have violated overtime laws must pay employees the total amount of unpaid wages based on their regular and overtime rates.
Navigating Overtime Requirements in Michigan
Know What to Do as an Employer
- Classify your employees accurately. Determine whether they are non-exempt or exempt from overtime under the FLSA and Michigan labor laws.
- Pay the correct overtime rate. The standard rate is 1.5 times the employee’s regular hourly rate if they work beyond the regular 40 hours a week. Meanwhile, overtime pay for tipped employees must be calculated based on the full minimum wage instead of the tipped wage.
- Maintain accurate timekeeping records and track all worked hours, including overtime. Keep these records for at least three years for compliance with state and federal requirements.
- Implement and enforce overtime policies, like getting pre-approval for overtime and disciplining employees for unauthorized overtime.
- Include non-discretionary bonuses, commissions, and incentives in an employee’s regular rate when calculating employee overtime.
- Adhere to industry-specific overtime requirements, such as the FLSA’s 7(k) exemption for law enforcement and firefighters, where overtime applies after 171 hours in a 28-day work period for law enforcement personnel and after 212 hours in a 28-day work period for fire protection employees.
- Train managers and supervisors to understand overtime policies, employee eligibility, and the legal requirements for approving or denying overtime.
- Address any employee concerns about unpaid overtime promptly to avoid legal disputes.
Know Your Rights as a Worker
- Maintain accurate personal records of hours worked to verify your pay’s accuracy and identify discrepancies in your employer’s records.
- Understand how overtime pay is calculated, including overtime for tipped workers and factoring in non-discretionary bonuses and incentives.
- Know state-specific rules that might affect your rights as an employee. Use reliable resources, such as the Michigan Department of Labor and Economic Opportunity (LEO) or the U.S. Department of Labor (DOL), to understand Michigan overtime regulations and how they apply to your role.
- Communicate with your employer about pay concerns and have them addressed by your HR department. Otherwise, consider contacting a labor rights organization like the Michigan LEO Wage and Hour Division to file a complaint.
Common Overtime Pay Challenges for Employers in Michigan
1. Misclassification of Employees
Incorrectly classifying employees can lead to overtime pay violations where employers must pay unpaid overtime claims, back wages, and other penalties.
2. Keeping Up with Changing Salary Thresholds
Michigan’s salary thresholds for exempt employees are set to increase in 2025 to $58,656 annually ($1,128/week). Employers who fail to adjust for these changes may unintentionally underpay employees, exposing themselves to compliance risks.
3. Accurately Calculating Overtime Pay
Errors in calculating the regular pay rate, like not including non-discretionary bonuses or commissions in the overtime rate, can lead to underpayment.
4. Managing Unauthorized Overtime
Employees may work unauthorized overtime, leading to disputes about payment. But employers must pay for all hours worked, even if overtime was not pre-approved.
5. Recordkeeping Errors
Incomplete or inaccurate time records can create problems during audits or disputes
Overtime Pay Solutions for Employers in Michigan
1. Conduct Regular Employee Classification Audits
Review job descriptions and responsibilities against exemption criteria to prevent misclassification issues that could lead to unpaid overtime claims.
2. Use Accurate Timekeeping Systems
Implement electronic timekeeping systems or software to reliably and automatically track employee work hours, including overtime. Require employees to clock in/out for breaks, shifts, and overtime to reduce errors and provide documentation in case of disputes or audits.
3. Train Managers and Supervisors
Educate those overseeing employees on overtime rules and company policies to prevent unintentional violations and ensure consistent policy enforcement.
4. Establish Clear Overtime Policies
Define when overtime is permitted and how it should be approved. Communicate that unauthorized overtime will still be paid but may result in disciplinary action to control labor costs while maintaining compliance.
5. Use Workforce Management Tools
Optimize employee scheduling to minimize unnecessary overtime.
Use software to forecast labor needs based on demand and ensure adequate staffing levels to reduce reliance on overtime.
6. Accurately Calculate Overtime Pay
Ensure compliance with overtime pay requirements, including bonuses and incentives, to avoid underpayment and potential legal penalties.
General Best Practices for Michigan Overtime Laws
1. Review and Update Employee Handbooks
Clearly outline overtime policies and procedures in your employee handbook. Ensure the handbook is updated to reflect changes in Michigan or federal overtime laws, such as salary threshold increases.
2. Implement a Proactive Compliance Audit Schedule
Regularly audit payroll and timekeeping records to identify potential compliance issues before they escalate. Include reviews of employee classifications, overtime payments, and time tracking systems.
3. Monitor Salaried Employees’ Hours
Even exempt employees may lose their exempt status if their job duties change or their salary falls below the Michigan threshold. Track hours worked by salaried employees to identify potential misclassification risks or burnout.
4. Use Transparent Communication Channels
Keep lines of communication open with employees to address questions or concerns about overtime pay. Encourage employees to report errors or concerns without fear of retaliation.
5. Document Overtime Approvals
Implement a system to document all overtime approvals for non-exempt employees.This will enforce internal policies and provide evidence in case of disputes.
Looking for other state-specific labor and overtime laws? Check out these guides:
Final Thoughts
Staying informed about Michigan overtime rules ensures fair compensation, creates a transparent, compliant, and efficient workplace, and avoids costly legal disputes.
Meanwhile, employees who know their rights are better equipped to advocate for fair treatment and ensure they are properly compensated for their efforts.
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- Generate detailed reports to ensure compliance with Michigan’s labor laws.
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In Michigan, the law stipulates that overtime pay is required after 40 hours of work in a single workweek, not after eight hours in a day. This means that non-exempt employees are entitled to receive 1.5 times their regular hourly wage for any hours worked beyond the 40-hour threshold within a week.
Michigan’s overtime laws share many similarities with federal regulations under the Fair Labor Standards Act (FLSA). However, there are notable differences that affect both employees and employers.
Employer Size Requirement
In Michigan, an employee is only eligible for overtime pay if they work for an employer with two or more employees.
In contrast, federal law applies to any employer with a gross income of $500,000 or more, regardless of the number of employees.
Compensatory Time (Comp Time)
Michigan law allows for the use of compensatory time (comp time) instead of cash overtime payments, which is not permitted under federal law for private employers. This arrangement requires a written agreement between the employer and the employee.
Statute of Limitations
Michigan’s statute of limitations for filing unpaid overtime claims is three years, compared to the federal limit of two years (or three years if the violation is deemed willful).
Daily Overtime Rules
Michigan does not have daily overtime requirements, meaning that there are no additional overtime calculations for hours worked beyond eight in a single day, unlike some states that impose such rules.
Michigan enforces its overtime laws through the Michigan Department of Labor and Economic Opportunity (LEO), while federal enforcement is managed by the Wage and Hour Division of the U.S. Department of Labor (DOL).
Michigan Enforcement: The LEO is responsible for overseeing and enforcing Michigan’s overtime laws. Employees who believe their rights have been violated can file a complaint with this state agency. The LEO investigates claims and can impose penalties on employers who fail to comply with state regulations.
Federal Enforcement: The DOL administers and enforces the Fair Labor Standards Act (FLSA), which includes overtime provisions. Employees can file complaints with the DOL, which conducts investigations and can also take legal action against employers for violations of federal law.
State Claims: Under Michigan law, employees can file a complaint with the LEO or pursue private legal action to recover unpaid overtime. They have up to three years from the date the pay was earned to file a claim, which is longer than the federal statute of limitations.
Federal Claims: Employees can also file claims under the FLSA, but they typically have only two years to do so or three years if the violation is willful. Federal claims can be pursued simultaneously with state claims if both laws apply.
Liquidated Damages: Both Michigan and federal laws allow for liquidated damages, meaning that if an employer is found to have willfully violated overtime laws, they may be required to pay double the amount owed in unpaid wages. This serves as a punitive measure against employers who intentionally disregard wage laws.
Retaliation Protections: Both Michigan and federal laws prohibit retaliation against employees for asserting their rights to overtime pay. If an employer retaliates—such as firing or discriminating against an employee for filing a complaint—they may face additional legal consequences.
While both Michigan and federal laws aim to protect workers’ rights regarding overtime pay, they differ in their enforcement mechanisms, legal recourse options, and specific regulations. Employees should understand these differences to effectively navigate their rights under both state and federal law.
