Michigan Employment and Labor Laws

Recent years have brought significant shifts in employment and labor law trends in Michigan. In 2023, the state legislature passed the Restoring Workers' Rights Bill, which aims to strengthen collective bargaining rights and raise wages for workers. The implications of this new labor law will be explored later in this article.

Before this development, one noteworthy trend occurred in 2022 - the number of discrimination charges filed in Michigan increased after six years of decline. Most allegations focused on unfair treatment based on disability, religion, and sex. This reversal highlights ongoing issues with employment discrimination, despite existing protections.

Employment law and labor law are related but distinct areas. Employment law governs individual employee-employer relationships and covers issues like minimum wage, work hours, and discrimination. Labor law focuses more broadly on the relationship between employers and groups of employees, including unionization rights and collective bargaining.

This article will cover key topics in both employment law and labor law. Whether you have concerns about wrongful termination, wages, or child labor laws or are considering joining a labor union, the information below aims to help. The recent updates on discrimination charges and the new Workers' Rights Bill provide important context.

Wage and Hour Laws in Michigan

Minimum Wage

As of 2023, all adult workers in Michigan are paid a minimum wage of $10.10 per hour, regardless of how often they are paid (weekly, monthly, biweekly, or semi-monthly). This applies to all individuals at least 18 years old and who work with at least one other person under the same employer.

Meanwhile, different rates apply to the following categories of workers:

• Tipped employees: $3.84 per hour or 38% of the regular minimum wage;

• Minors aged 16 to 17: $8.59 per hour, or 85% of the regular minimum wage;

• Newly hired workers aged 16 to 19: $4.25 per hour for the first 90 days of employment.

These rates are specified in the Improved Workforce Opportunity Wage Act, which also requires the minimum wage to increase each year. In 2024, the minimum wage will increase to $10.33 per hour for all workers, including those mentioned above.

Overtime Pay

Michigan law requires employers to pay non-exempt employees 1.5 times their regular hourly rate for any work over 40 hours per week. Employees can also choose to be compensated with time off at a rate of 1.5 hours off for each hour of overtime worked. Time-off hours can be accumulated and used for paid leave.

The following employees, however,  are exempt from overtime pay in Michigan:

• Agricultural workers;

• Public employees;

• Employees of amusement establishments that operate for less than seven months per year;

• Employees in administrative, executive, and professional positions;

Employers who violate Michigan's minimum wage, overtime pay, or compensatory time laws may be penalized with a civil fine of up to $1,000.

Leaves

Michigan law does not require employers to provide paid leave for sickness, vacation, bereavement, parental or family reasons, or voting. However, there are some exceptions.

For example, business owners with more than 50 workers must follow the Paid Medical Leave Act, which requires them to provide employees with up to 40 hours of paid sick leave per year. Employers must also allow employees to take unpaid leave for up to 12 weeks under the Family and Medical Leave Act for certain qualifying reasons, such as childbirth, adoption, or a serious health condition.

In addition, Michigan law requires employers to provide paid leave to certain employees, namely:

• Members of the military;

• Victims of sexual assault and domestic violence;

• State employees and American Red Cross-certified volunteers during emergencies.

Note that employees who are summoned for jury duty are not paid by their employers, but they are protected from losing their jobs while they are serving.

Michigan Employment and Labor Laws Against Discrimination

Several laws, such as the Elliott-Larsen Civil Rights Act and Persons with Disabilities Civil Rights Act, shield employees and job applicants in Michigan against discrimination based on these protected characteristics:

• Race;

• Color;

• National origin;

• Religion;

• Age;

• Gender;

• Pregnancy;

• Disability.

Specifically, these laws prohibit employers from discriminating against employees and applicants when considering whom to hire, train, or promote. Employees and applicants also cannot be retaliated against for filing a discrimination complaint. 

In addition, Michigan law requires employers to pay employees equally, regardless of sex, unless the difference is based on merit, performance, or seniority. This mandate is set forth in the Improved Workforce Opportunity Wage Act.

As of November 2023, Michigan is the only state that bans height and weight discrimination. Since 2018, it has also prohibited employers from asking job applicants about their arrest records. 

Michigan Work Safety Requirements

The Michigan Occupational Safety and Health Administration enforces a workplace safety plan different from the federal OSHA, which, in turn, covers issues not specified in the state plan. MIOSHA’s administrative standards cater to most employers and employees, including those in general industry, agricultural, construction, and radiation workplaces. 

MIOSHA or state or plan standards do not apply to:

• Maritime workers;

• U.S. Postal Service contractors;

• Enrolled Indian tribe employers and owners and operators of businesses inside Indian reservations;

• Aircraft cabin crews.

MIOSHA investigates workplaces for compliance, penalizing employers through citations should it find any violations. These citations are categorized according to the severity of the hazard. Penalties can also be aggravated by willful or repeated offenses, as well as an employer’s lack of effort to eliminate previously found hazards. Citations may result in penalties ranging from $5,000 to $70,000. 

With that in mind, if you have been injured in the workplace and are thinking about filing a workers’ compensation claim, this article may help you understand the process.  

Michigan Employment and Labor Laws for Minors

Michigan law protects workers under 18 through the Youth Employment Standards Act. This law sets the minimum employment age at 14 and requires minors to have a work permit or agreement between their employer and school. Minors must also maintain good academic standing to keep their work permit. Additionally, they are prohibited from having hazardous occupations, such as construction, demolition, and machine operation.

The limited working hours of minors are as follows:

Unlike adults whose meal breaks are not regulated by law, minors in Michigan must have a 30-minute break every five hours of work.

Michigan Laws on Labor Unions

The National Labor Relations Act protects the right of workers to band together and advance their interests, whether through negotiating with employers or conducting strikes. As such, employees cannot be threatened, punished, or discriminated against for being part of a union. 

Michigan passed right-to-work laws in 2013, making it illegal to require union membership or dues. This led to a decline in union membership rates. Meanwhile, the Economic Policy Institute found that RTW laws could be linked to low wages, income inequality, and decreased access to employee benefits.

So in 2023, Michigan repealed its RTW laws, becoming the first state to do so in nearly 60 years. Starting in March 2024, workers in Michigan may be required to join a union and pay membership fees to get a job. This will give labor unions more power to negotiate for better wages, benefits, and working conditions for all employees.

Is Michigan an At-Will Employment State?

Yes, Michigan operates under an at-will employment system, granting employers the freedom to terminate employees at any time and for any reason, provided they adhere to all applicable laws. This flexibility extends to employees, who also have the right to resign at any time.

Despite this general rule, certain exceptions apply. Firstly, employing bad faith tactics by either party renders the termination unlawful. Secondly, employers cannot mislead employees into believing they have job security through contractual provisions, policy statements, or company practices only to dismiss them without just cause. Finally, employers cannot compel employees to engage in illegal activities and then terminate them for doing so.

What Qualifies as Wrongful Termination in Michigan?

While most employment in Michigan is considered at-will, certain exceptions can constitute wrongful termination. Discrimination is a primary example. As previously mentioned, employers cannot fire someone based on their protected characteristics.

Employees may also have a wrongful termination claim if they were fired before the end of their employment contract. If a written contract exists, employers should have "just cause" to terminate an employee before the contract's expiration. This means they must have a valid or justifiable reason for firing the employee, such as poor performance or misconduct.

Verbal promises of job security can also be legally binding. If an employer promises an employee that their job is secure until retirement and then fires them before then, the employee may have a wrongful termination claim, even if there is no written contract.

Note that employers who fire employees for retaliatory reasons can be held liable for wrongful termination. Retaliation occurs when an employer fires or threatens an employee for reporting the company's illegal or unethical practices to authorities. This is under Michigan's Whistleblowers' Protection Act. Additionally, employees who are requested by the government to assist in an investigation or testify in a hearing are protected from retaliation.

How Do You Report an Employer in Michigan for Wrongful Termination?

If you believe your employer unlawfully discharged you for discriminatory reasons within the past 180 days, you can file a complaint with the Michigan Department of Civil Rights by:

• Filling out an online form;

• Calling 1-800-482-3604;

• Visiting a nearby MDCR office; 

• Writing to the agency via mail or email. Make sure to include your name, address, and phone number.

Once you file a complaint, the MDCR will conduct an investigation to examine documents or evidence and conduct witness interviews to resolve the issue between you and your employer.

Alternatively, you can file a discrimination charge with the EEOC within the same 180-day timeline, which can be extended to 300 days in some cases. To schedule an appointment, visit the EEOC Public Portal or visit their Detroit office.

Remember that filing a complaint or charge is not the same as filing a lawsuit. If the investigation by the MDCR or EEOC does not result in a settlement, you may pursue legal action. An employment and labor attorney in Michigan can guide you through the legal process and represent you in court.

The EEOC may sometimes file a lawsuit on behalf of discriminated employees. Otherwise, they will issue you a Right-to-Sue notice, allowing you to file a lawsuit within 90 days. If you are a labor union member, filing a complaint may not be the best course of action, as the terms of a collective bargaining agreement likely cover you. Instead, follow the grievance and arbitration procedures specific to your organization. 

What Is the Statute of Limitations for Wrongful Termination Cases in Michigan?

In Michigan, you typically have three years to file a wrongful termination lawsuit. However, the specific timeframe may vary depending on your circumstances.

For instance, if your employment contract includes a limitations of actions clause (which Michigan courts have upheld in a previous case), you may only have 180 days to initiate legal action. Moreover, unlawful termination claims arising from whistleblower retaliation generally must be filed within 90 days, as per Michigan law. Know that certain federal laws may require even shorter filing deadlines.

The following table outlines some specific scenarios of retaliatory termination and their respective filing deadlines:

You may consult a lawyer to clarify which statutes apply to your Michigan employment lawsuit. 

How Much Can Someone Sue an Employer in Michigan for Wrongful Termination?

Determining the exact amount of compensation in a wrongful termination case is challenging due to various influencing factors. However, analyzing past cases in Michigan reveals that unlawful termination and discrimination settlements typically range from $5,000 to $90,000. Court verdicts may yield even higher compensation awards.

While Michigan imposes no cap on economic and non-economic damages in most civil cases, the EEOC restricts compensation amounts in discrimination-related lawsuits. Employers with 15-100 employees face a $50,000 cap, while larger companies employing over 500 may pay up to $300,000.

In cases involving contract breaches, calculated damages primarily include back pay, which includes the employee's unpaid wages and benefits for their presumed employment duration. Front pay may be awarded if the employer cannot reinstate the employee to their former position. Compensation for emotional and mental distress, attorney's fees, and other legal expenses may also be granted.

Resources for Employees in Michigan

Overall, if you believe you have been wrongfully terminated or discriminated against in the workplace, it is essential to seek legal counsel to understand your rights and options. The resources listed below provide information and support for employees in Michigan who have experienced workplace issues.

Disability Rights Michigan

This nonprofit outlines the legal protections available to disabled individuals in the workplace. It provides phone consultations, either referring clients to relevant organizations or offering direct legal advocacy. Due to resource limitations, the organization only accepts cases that align with its focus areas, prioritizing those with the potential to benefit the disabled community significantly. It can be reached through these contact channels.

Michigan Department of Labor and Economic Opportunity

The LEO serves as a comprehensive resource for workers' rights, providing information and avenues for reporting violations of wage and hour laws and instances of discrimination. Its affiliated agency, the Michigan Employment Relations Commission, specializes in resolving workplace disputes through mediation and arbitration. Furthermore, the LEO website offers valuable resources for Michigan residents, including labor law updates, career opportunities, and training programs.

Michigan Legal Help

Since 2012, this nonprofit has operated under the Michigan Advocacy Program, providing legal information online and opening self-help centers. Its employment law guide covers topics such as wage disputes, discrimination, disability accommodations, and workers' compensation. Although the organization cannot connect employees with lawyers, it offers a free legal service that allows eligible individuals to ask questions anonymously.