Michigan Governor Seeks to Increase Overtime for Managers to Receive More Benefits

Michigan Gov. Gretchen Whitmer has proposed a plan that would provide overtime for managers who currently don’t qualify because they are salaried.

According to federal law, workers who are paid hourly are entitled to overtime pay for any hours worked beyond forty. Of the 4.4 million residents who are employed in Michigan, about 2.9 million are paid an hourly wage.

The remaining 1.5 million people earn a fixed salary, which means they do not receive overtime pay regardless of the number of hours they work in a workweek.

The only exception is that any salaried worker who earns less than the federally recognized threshold of $23,660 is entitled to overtime pay when more than 40 hours in one workweek is clocked. Under that exception, the employee is entitled to overtime pay of not less than time and one-half the employee’s regular rate of pay.

That $23,660 threshold was set by the federal government decades ago. According to the U.S. Department of Labor, the last time the threshold was updated was in 2004.

The Obama administration attempted to increase the federal threshold to $47,476 to allow salaried workers who received up to that amount to claim overtime pay when they worked more than 40 hours per week.

The Trump administration is increasing the federal level to only $35,568, effective Jan. 1, 2020.

In May, Whitmer sent a letter to the Trump administration expressing the $35,568 figure was too low and “hurts Michigan’s working families and fails to ensure working people who work long hours away from their families for their jobs are paid fairly for their time.”

Individual states are allowed to set their own salary thresholds for the reason of determining overtime protections.

Jeff Donofrio, director of Michigan’s Department of Labor and Economic Opportunity, told the Detroit Free Press that Gov. Whitmer is on the right track with her proposal to increase Michigan’s salary threshold.

“Gov. Whitmer’s directive to increase overtime pay protections is good for workers and businesses across Michigan. When workers are paid fairly, it allows them to further invest in Michigan’s economy, which will create a long-lasting positive impact on businesses,” Donofrio told the Detroit Free Press.

Benefit of More Overtime for Managers

Whitmer has not yet announced the salary level she intends to set as the new threshold, but speculation is it’s $51,000. If that is the final number, then an additional 200,000 workers in Michigan could qualify for overtime pay of time and one-half.

If the new federal level of $35,568 as the threshold is honored in Michigan, the number of additional people qualified to receive overtime pay will be reduced to 110,000.

Salaried workers who qualify for overtime pay, but don’t receive it could be entitled to back wages and other compensation through a wage and hour claim. Last year, the state of Michigan’s Wage and Hour Division collected $2 million owed to thousands of workers.

Other states have proactively planned to increase their overtime for managers who earn low salaries, too. Massachusetts will have a threshold of  $64,000 by 2024. In California, the threshold will reach $62,400 by 2022. New York’s salaried threshold will be $48,750 by 2021. Pennsylvania has a plan for its salaried workers to qualify for overtime once they reach a $47,892 salary by 2022. And by 2026, salaried workers in the state of Washington will see a threshold of $70,000.

Michigan was hit particularly hard by the Great Recession and the loss of multitudes of manufacturing jobs. Whitmer believes residents need and deserve an increased opportunity for overtime.

When she announced the proposal, she said, “Strengthening paychecks is good for families, good for business, and good for our economy. It’s time to get it done.”

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If you work or worked as an assistant manager at a fast-food restaurant, retail store or supermarket and you perform the same duties as the hourly employees, you may have been misclassified as exempt and are owed unpaid overtime pay.

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This article is not legal advice. It is presented
for informational purposes only.