The Department of Labor (DOL) assumes that every hourly employee is paid overtime if they work more than a certain number of hours in any given work week. The additional hours worked in addition to regular required hours are called overtime.
Overtime pay is the pay rate which is paid for the hours that are worked over than those required each week. The federal minimum amount for overtime pay is 1.5 times the regular rate the employee makes. This amount is paid for work hours over 40 hours per week.
What are the Standards for Minimum Wage?
The federal minimum wage is set by the FLSA. It is currently set at $7.25 per hour.
Minimum wage is set in order to prevent injustices regarding wages and work conditions. Each state has their own minimum wage laws. An employee is entitled to receive the higher minimum wage amount, whether it is federal or state.
It is important to note that not every employer is required to pay minimum wage. In order for an employer to be required to pay minimum wage, the business must receive $500,000 or more in annual sales or the employees work in interstate commerce, or be doing business between the states.
Additional employees that are exempt from receiving federal minimum wage include:
- Independent contractors;
- Outside salespersons;
- Workers on small farms;
- Switchboard operators employed by phone companies with no more than 750 stations;
- Workers of seasonal amusement or recreational business;
- Employees of local newspapers that have a circulation amount of less than 4,000;
- Newspaper deliveries; and
- Students and learners defined by law.
An employee may still be covered under state or local laws if federal laws do not apply. If employees earn tips, the minimum wage guidelines may vary. The tips, however, must be enough to meet minimum wage requirements.
What are the Overtime Pay Requirements?
The Fair Labor Standards Act (FLSA) provides the guidelines for overtime pay requirements. In general when an employer requires or permits an employee to work overtime, the employer is obligated to pay the employee for their overtime work.
Employees who fall under the FLSA are entitled to receive overtime pay for any hours worked in excess of 40 hours. The FLSA does not require overtime pay for hours that are worked on weekends or holidays.
There is not a set limit that is specified in the FLSA regarding the number of hours to work in a work week. It is important to note that work weeks can be different for different employees or groups of employees.
The overtime requirement cannot be waived by an agreement between an employer or an employee. In addition, an employer cannot prohibit an employee from working overtime or require an advance authorization for any work done overtime.
An employer cannot refuse to pay for any overtime work done if it falls under the FLSA. employees have a right to compensation for hours they worked.
Overtime pay is required to be calculated on the basis of the average hourly rate derived from the earnings worked for during the work week. Earnings can be based on:
- A piece-rate;
- Salary; or
- Commission.
Which Employees are Exempt from Receiving Overtime Pay?
If an individual’s employer is covered under the FLSA or the state’s overtime law, all employees are entitled to overtime pay unless there is an exception that applies. Workers that are exempt and, therefore, are not entitled to overtime, include:
- White collar jobs such as executive, administrative and professional that based on a salary;
- Independent contractors;
- Volunteer workers;
- Outside sales personnel;
- Certain computer specialists;
- Workers of amusement parks or county fairs;
- Employees of organized camps and religious conference centers;
- Employees of certain small newspaper;
- Newspaper deliverers;
- Workers in fishing operations;
- Babysitters; and
- Criminal investigators.
What is the Overtime Pay in Michigan?
There is a law in Michigan called the Michigan Minimum Wage Law, which follows the federal minimum that is set by the Federal Fair Labor Standards Act. Pursuant to this law, an employer is required to pay its employees at least minimum wage, which is currently $9.45 , for all hours worked.
Any hours which exceed 40 in any given work week are considered overtime pay and are paid at a rate of 1.5 times the regular rate. Pursuant to the Fair Labor Standards Act, a work week is defined as any 7 consecutive work days.
As an example, consider an employee who is paid minimum wage and works 45 hours in a work week. This employee could potentially earn $378 of regular pay and an additional $70.88, at a rate of $14.18 per hour of overtime, in overtime pay prior to taxes.
How is Michigan Overtime Pay Different than Federal Law?
Although Michigan law follows the FLSA, there are significant differences. For example, pursuant to Michigan law, an individual may only be entitled to overtime pay if their employer has 2 or more employees. This is different from federal law, which only requires that the employer have a gross income of $500,000, regardless of the number of employees.
In addition, pursuant to Michigan law, unpaid overtime may be collected up to 3 years from the date the pay was earned. Federal law, on the other hand, requires unpaid overtime to be collected up to 2 years after the pay was earned.
What If My Employer Fails to Pay Overtime Intentionally?
If an individual’s employer fails to pay overtime intentionally, the employer may be required to pay liquidated damages. This means that the employer would be required to pay an additional sum of money equal to the amount owed.
Are Any Employees Exempt from Overtime Pay?
Yes, there are some employees who are exempt from overtime pay. Michigan law exempts individuals employed in a bona fide executive, administrative, or professional capacity who earn at least $250 per week from overtime pay. Michigan law defines executives as employees whose primary duty is management and who supervises 2 or more employees.
In Michigan, administrative employees are employees whose primary duty is non-manual work which is directly related to management policies or general business operations. It may also include administration of an educational institution.
How Can I File a Claim Against My Employer for Unpaid Overtime?
An employee is able to file a claim under both Michigan Overtime Law and the Federal Fair Labor Standards Act. In Michigan, an employee can file a complaint with Michigan’s Wage and Hour Program.
This Michigan state agency will investigate the employee’s claim, negotiate with the individual’s employer, and may file a lawsuit on their behalf. There is a 3 year statute of limitations which applies to Wage and Hour complaints.
Unlike the court system, the Wage and Hour Program does not charge a filing fee for an overtime complaint. Federal laws allow an individual to file additional lawsuits and complaints.
An individual may also file a civil lawsuit for unpaid overtime. As noted above, there is a 3 year statute of limitations for these types of lawsuits. Claims which are filed after 3 years are dismissed.
Should I Seek Legal Help?
It is important to seek the assistance of an employment law attorney in Michigan. Overtime lawsuits may be complex and the laws may vary by location.
Your attorney will be familiar with the overtime pay laws in Michigan, advise you of your chances of prevailing in a lawsuit, and represent you in court if you decide it is necessary. Having an attorney on your side greatly increases your chances of obtaining the overtime pay you are due.
