Our Payroll Solutions Group would like to make you aware of important payroll updates that take effect on January 1, 2020. The changes affect businesses that have employees.
Michigan Minimum Wage Increases
Michigan law requires a gradual increase in minimum wage from $9.25 per hour to $12.05 per hour by January 1, 2030. Increases are based on the schedule below. Also, refer to the Michigan Department of Labor Poster.
The current rate, which took effect on March 29, 2019, is $9.45/hour.
1/1/20: $9.65/hour
1/1/21: $9.87/hour
1/1/22: $10.10/hour
1/1/23: $10.33/hour
1/1/24: $10.56/hour
1/1/25: $10.80/hour
1/1/26: $11.04/hour
1/1/27: $11.29/hour
1/1/28: $11.54/hour
1/1/29: $11.79/hour
1/1/30: $12.05/hour
- No inflationary increases.
- The minimum wage for tipped employees remains tied to 38% of the regular minimum wage rate.*
*Under the law, all tipped employees are guaranteed to make at least the minimum wage. If their tips plus the tipped employee minimum wage does not equal or exceed the regular minimum wage, the employer must pay any shortfall to the employee. Failure to comply results in fines and fees.
FLSA Overtime Exemption Salary Threshold Increase
Following are key changes in the Fair Labor Standards Act pertaining to the salary threshold for overtime exemption:
- Increase the minimum salary threshold that exempts an employee from overtime pay from $23,660 to $35,568 per year, or $684 per week.
- Allow employers to use nondiscretionary bonuses and incentive payments (including commissions) paid at least annually to satisfy up to 10% of the salary threshold.
- Increase the “highly compensated employee” white-collar exemption minimum salary threshold from $100,000 to $107,432 per year.
- Employees who do not meet the minimum salary threshold must be paid overtime for every hour worked over 40 hours in a workweek.
For more information, refer to the U.S. Department of Labor Fact Sheet.