Compliance with Michigan labor laws is a fundamental responsibility for employers. It’s not just about ticking boxes; it’s about safeguarding your business and treating your employees fairly.
Michigan labor laws encompass various critical aspects, such as minimum wage, overtime regulations, employee classification, workplace safety, and discrimination prevention. Failure to adhere to these regulations can expose employers to severe penalties, ultimately jeopardizing their financial stability and standing within the business community.
This article serves as a brief and informative guide, shedding light on key Michigan labor laws and the penalties associated with breaking them. By clearly understanding these consequences, you can make informed decisions, establish robust compliance mechanisms, and protect your businesses from unnecessary risks.
This Article Covers
Most Common Labor Law Violations in Michigan
Penalties for Breaking Michigan Labor Laws
- Elliott-Larsen Civil Rights Act of 1976
- Michigan OSHA Law
- Whistleblower Protection Act (469 PA 1980)
- The Employee Fair Scheduling Act
- Recordkeeping laws
- Michigan Workforce Opportunity Wage Act (WOWA)
- Family Medical Leave Act (FMLA)
- Michigan’s Youth Employment Standards Act (YESA)
Best Practices to Avoid Violating Michigan Labor Laws
- Familiarize yourself with Michigan labor laws.
- Establish clear employment policies.
- Maintain accurate employee records.
- Use a precise payroll system.
- Stay updated on labor law changes.
- When in doubt, consult legal professionals.
Most Common Labor Law Violations in Michigan
In Michigan, like in many other states, there are specific labor laws in place to protect the rights and well-being of workers. However, despite these regulations, some employers still find themselves violating these laws, leading to significant labor law violations. Here’s a look at some of the most common labor law violations in The Great Lake State:
- Paying an hourly rate below the required minimum wage: Wage theft is still very much a problem in Michigan. In a report by the Economic Policy Institute, the total unpaid annual wages to Michigan employees reached a whopping $429,000,000 from 2013 to 2015. These minimum violations can occur when employers pay workers less than the minimum wage or fail to comply with subsequent minimum wage increases.
- Failing to pay required overtime rates: When employees work more than 40 hours per week, they are entitled to receive overtime pay at a rate of one and a half times their regular hourly wage. Employers can break this law by misclassifying employees as exempt from overtime or manipulating time records to avoid paying overtime. This also greatly contributes to wage theft in Michigan.
- Retaliation for whistleblowers: Employers are not allowed to retaliate against employees who report or disclose violations of state or federal laws. Retaliation can take the form of demotion, termination, harassment, or creating a hostile work environment. Unfortunately, whistleblowers are still victims of discrimination and retaliation despite law protection. In fact, in 2018, retaliation made up the majority of charges filed by Michigan employees at the Equal Employment Opportunity Commission (EEOC), with 986 total charges.
- Discrimination in the workplace: Discrimination based on race, gender, age, religion, disability, national origin, and other protected characteristics is prohibited in Michigan. Unfortunately, despite law protection, workplace discrimination still exists in the state. Discrimination can manifest in hiring, promotions, pay, and other employment practices.
Penalties for Breaking Michigan Labor Laws
As an employer, it is crucial to be well-versed in the key labor laws and the penalties associated with violations. This knowledge not only protects your business but also ensures fair treatment of employees and fosters a culture of compliance. Here are the key labor laws in The Great Lake State that you should be aware of:
Elliott-Larsen Civil Rights Act of 1976
The Elliott-Larsen Civil Rights Act (ELCRA), enacted in 1976, prohibits discrimination based on various factors such as religion, race, color, national origin, age, sex, height, weight, familial status, and marital status. Recent amendments to the ELCRA have expanded its scope to include sexual orientation, gender identity, and gender expression, providing enhanced protection for the rights and freedoms of individuals in Michigan.
Penalty for Violation
If the commission finds a violation of ELCRA, it will issue a final order stating its findings. The order will require the respondent to stop the discriminatory practice and ensure equal civil rights. If evidence reveals a pattern of discrimination, the commission may amend the pleadings, make findings, and issue an order accordingly.
The ordered actions may include hiring, reinstatement, participation in training programs, and so on. Imposition of civil fines may also be applicable as determined by the court.
Michigan OSHA Law
Michigan prioritizes workplace safety through its OSHA-approved State Plan, overseen by the Michigan Occupational Safety and Health Administration (MIOSHA). While similar to federal OSHA standards, the State Plan has specific requirements enforced through workplace inspections by MIOSHA to ensure compliance with safety regulations.
Under MIOSHA, employers have three primary responsibilities:
- Ensure a safe workplace, free from known hazards that could result in employees’ death or serious physical harm.
- Comply with MIOSHA regulations, including rules, standards, and orders issued by the Michigan Department of Labor and Economic Growth under the Act.
- Inform employees about their rights and obligations under MIOSHA through effective notices and other means.
Penalty for Violation
Inspectors consider three factors when determining penalties for violating MIOSHA regulations:
- The severity of the violation.
- The company’s size.
- The employer’s past citations.
MIOSHA includes both fines and criminal penalties. If a person knowingly provides false information under the Act, they may face a fine of up to $10,000 or imprisonment for a maximum of 6 months, or both. If a willful violation leads to an employee’s death, the employer may be fined up to $10,000 or imprisoned for a maximum of one year or both. A second conviction doubles the maximum fine and carries a potential prison sentence of up to three years.
Whistleblower Protection Act (469 PA 1980)
Michigan has a Whistleblowers’ Protection Act in place to safeguard employees who report law violations at the local, state, or federal level. This legislation prohibits employers from retaliating against workers who make or plan to make a report. Employers can’t fire, threaten, or discriminate against these employees regarding pay, conditions, location, or benefits. It’s important to note that this protection applies only to employees who act in good faith and not to those who knowingly make false claims.
Penalty for Violation
Violators of this Act may face a fine of up to $500. The court can order remedies such as reinstatement, back wages, fringe benefits, seniority rights, and actual damages. The complainant may also be awarded litigation costs, including attorney fees, if deemed appropriate by the court.
The Employee Fair Scheduling Act
This law mainly affects retail, food, and hospitality businesses. According to the Michigan Employee Fair Scheduling Act, employers must post non-fixed schedules at least 14 days in advance. If the schedule is changed, employees must be notified at least 96 hours before the workweek begins.
If changes are made without proper notice, employees are eligible for overtime pay for their first shift on the modified schedule. Moreover, if there is a permanent change in an existing schedule, employees are entitled to overtime pay for the first two shifts of the new schedule.
Penalty for Violation
If an employer violates this Act, they may be required to pay a civil fine of up to $2,000. Each violation is considered separate. In the case of a continuing violation, each day of non-compliance is treated as a separate violation.
Recordkeeping laws
Michigan employers are obligated to maintain employee records by federal laws like the Federal Insurance Contribution Act, Fair Labor Standards Act (FLSA), and Equal Pay Act. Each of these laws has different requirements but generally, employee records should include thorough documentation of hiring and application information, promotions, demotions, layoffs, recalls, discharges, and selections for training. It is required to retain these records for a minimum period of one year to ensure compliance.
Additionally, employers must keep accurate and up-to-date job descriptions for at least two years and maintain detailed records of leaves of absence, the total number of hours worked, and the total amount of wages paid for a minimum period of three years. Before discarding any employee records, it’s best to always consult with your attorney.
Penalty for Violation
Failure to maintain the necessary records as mandated by the FLSA can result in penalties. While the Department of Labor does not have the authority to impose civil fines for recordkeeping violations, individuals who deliberately violate the law may face criminal consequences. This can include fines of up to $10,000, imprisonment for a maximum of six months, or both.
Michigan Workforce Opportunity Wage Act (WOWA)
The Michigan Workforce Opportunity Wage Act sets the minimum wage for workers in Michigan, which currently stands at $10.33. WOWA also sets overtime regulations in the state. According to WOWA, employees who work over 40 hours a week are entitled to overtime pay. Overtime pay is at least 1.5 times their regular pay rate, meaning the minimum overtime rate in Michigan is $15.495 per hour. This is the same as the overtime regulation set by the Federal Labor Standards Act.
There are, however, exceptions to the state’s minimum wage, this includes:
- Tipped employees
- Farm workers
- Taxi drivers
- Outside salespersons
- Salaried employees who fall under the categories of administrative, executive, or professional employees will be exempt if their weekly earnings exceed $684
In the case of tipped employees, employers can pay a minimum wage of $3.93 per hour. However, if their tips do not reach the minimum wage of $10.33, the employer must make up the difference to ensure the employee is earning at least that amount.
Penalty for Violation
Employees have the option to take legal action to recover unpaid minimum wages or overtime. They can file a civil lawsuit or submit a complaint to the Wage and Hour Division. The Wage and Hour Division can investigate the complaint and take legal action to collect unpaid wages or overtime.
If there is reasonable cause to believe that an employer violated the law, an investigation may be conducted on behalf of all employees. In case of a successful recovery, the amount can include unpaid minimum wages or overtime, along with damages, costs, and reasonable attorney fees. Additionally, an employer failing to pay minimum wage or overtime may face a civil fine of $1,000.
Family Medical Leave Act (FMLA)
The Family and Medical Leave Act is a crucial federal law that regulates time off from work. It grants eligible employees up to 12 weeks of unpaid leave for certain family and medical reasons, like the arrival of a new child or taking care of a family member with a serious health condition. The law also mandates employers to continue providing health benefits to employees during their leave and ensure they are reinstated to their previous or equivalent positions when they return to work.
Penalty for Violation
The Wage and Hour Division oversees and enforces the FMLA for private, state, and local government employees, as well as certain federal employees. If violations cannot be resolved satisfactorily, the US Department of Labor may take legal action to ensure compliance. If the court rules in favor of the complainant, the employer may be required to grant the requested FMLA leave and provide monetary damages, including attorney fees and court costs.
Michigan’s Youth Employment Standards Act (YESA)
The Michigan Youth Employment Standards Act (YESA), under Public Act 90 of 1978, defines a minor as an individual under 18 years of age, encompassing employees, volunteers, independent contractors, and performing artists.
According to YESA, minors below 18 years old must obtain a work permit or a written agreement or contract between the employer and the relevant educational institution prior to commencing work. These work permits can be obtained from the designated school issuing officer in Michigan, who serves as the chief administrator of the minor’s attending school or the school district where the minor will be employed.
In the event of a job change, a new work permit is necessary for the new employer. It is worth noting that a work permit can be revoked if the minor’s academic performance is unsatisfactory.
YESA also outlines “hazardous” occupations that minors are prohibited from working in. Hazardous occupations typically involve mining, demolition, roofing, excavating, and meatpacking. They also include jobs that require the operation of power-driven machines used for woodworking, hoisting, metal forming or metal punching, bakery, and paper products.
Penalty for Violation
Violation of this Act is considered a misdemeanor and can result in a maximum penalty of one year of imprisonment, a fine of $500.00, or both. Penalties are increased for violations related to inadequate adult supervision.
Learn more about Michigan Child Labor Laws.
Best Practices to Avoid Violating Michigan Labor Laws
The penalties mentioned in the previous section are no laughing matter. They won’t only give you a ton of headaches but also costly legal fines and damage to your company’s reputation. To save yourself from all the trouble, here are some best practices that you can start implementing in your business today:
Familiarize yourself with Michigan labor laws.
It is essential to have a thorough understanding of Michigan labor laws that apply to your business. It can give you a strong foundation on which you can build your company policies around.
Familiarize yourself with the provisions of Michigan’s Workforce Opportunity Wage Act, The Family Medical Leave Act, the Michigan Occupational Safety and Health Act, and other relevant statutes. This will help you ensure compliance and avoid inadvertent violations.
Establish clear employment policies.
Develop comprehensive and clear employment policies that align with Michigan labor laws. These policies should cover areas such as wages, overtime, breaks, leave entitlements, anti-discrimination and harassment, safety regulations, and any other relevant aspects. Communicate these policies to your employees, either through an employee handbook or other means, and make sure they are easily accessible.
Maintain accurate employee records.
Accurate recordkeeping is crucial for compliance with Michigan labor laws. Maintain detailed records for each employee, including their personal information, employment contracts, hours worked, wages paid, leave records, and any other pertinent documents. Retain these records for the required duration as specified by Michigan law, typically for a minimum of three years.
The best way to maintain accurate records is to use reliable time-tracking software. These tools can automate time capture so employers can eliminate manual errors and ensure precise work hours tracking.
Use a precise payroll system.
Ensure your payroll system accurately calculates and records all wages, overtime, deductions, and benefits in accordance with Michigan labor laws. Pay employees on time and provide accurate pay stubs that detail their wages and any deductions made. Familiarize yourself with the minimum wage rates, overtime thresholds, and any other wage-related regulations specific to Michigan.
Stay updated on labor law changes.
Labor laws are subject to change, with new regulations or amendments introduced periodically. Stay informed about any updates to Michigan labor laws by regularly reviewing official government websites, subscribing to relevant newsletters, or consulting legal resources. Promptly adapt your employment policies and practices to align with any changes to ensure ongoing compliance.
When in doubt, consult legal professionals.
If you encounter complex legal issues or are uncertain about compliance with Michigan labor laws, seek guidance from qualified legal professionals who specialize in employment law. They can provide accurate and up-to-date advice tailored to your circumstances. Consulting legal experts can help you navigate intricate matters, interpret legal requirements, and mitigate potential risks.
Learn more about Michigan Labor Laws through our detailed guide.
Important Cautionary Note
This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.