31 October 2019

Next Stop on the Overtime Roller Coaster: Michigan

On October 24, Michigan’s Governor Gretchen Whitmer announced a sweeping and expansive proposal to extend overtime protections to hundreds of thousands of Michigan’s workers.  The proposal, which is technically a “Request for Rulemaking” to amend the Michigan Administrative Code, calls on the Wage and Hour Division to change the salary test for employees to “better capture employees who work in a bona fide executive, administrative or professional capacity.”  But enough of the legal mumbo jumbo.  Let’s figure out what this actually means.

Employers must classify their employees as either “non-exempt” or “exempt.”  That is, employees are either “not exempt” from the overtime laws or they are “exempt” from overtime laws.

  • Exempt employees are those who qualify for certain exemptions (the executive, administrative and professional exemptions are commonly used) and who are paid a salary over a certain amount. That amount is currently $23,600.  It increases to $35,568 on January 1.
  • Non-exempt employees must be paid overtime for every hour they work over 40 in a week.

Still with me?  If not, please contact one of our wage and hour attorneys immediately because we have some work to do!

Governor Whitmer is proposing to increase the exempt salary minimum beyond the new $35,568 threshold.  This will significantly increase the number of Michigan employees who are entitled to overtime.

Having a bit of déjà vu?  We went through this four years ago when the Obama administration attempted to raise the salary threshold to $47,800.  That attempt was paused by an injunction issued by a federal court, and eventually abandoned in the early days of the Trump administration.  But Governor Whitmer hasn’t forgotten.  Although she did not yet announce her proposed salary threshold, she alluded in her press release to similar changes across the country.  These include the Obama administration’s attempts in 2016 ($47,800), New York ($58,500 by the mid-2020s), California ($62,400 by 2022 – gulp!), and a Washington State proposal ($79,872 by 2026 – what?!?).

The Request for Rulemaking is the first step in a process that could take a year or more.  There will be plenty of objections and challenges along the way, so any changes are far from certain.  Check back here for updates as they become available, and feel free to contact your favorite Miller Johnson attorney if we can help in any way.