Do You Have to Offer Benefits to Hourly Employees Over 40 Hours in Michigan?
Labor laws in Michigan and other states do not require employers to offer benefits, including health insurance, paid time off and paid sick leave, to employees regardless of hours worked. Federal laws applicable in Michigan do require the extension of certain benefits, including raises in hourly pay rates, for employees working over 40 hours during the workweek.
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Health Benefit Rules
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At publication, no state or federal law in Michigan or any other state requires an employer to offer health benefits or another form of medical coverage regardless of hours worked or the status of the employee as an hourly wage earner or salaried worker. If an employer chooses to offer health insurance benefits to employees, the employer may establish criteria for benefit eligibility, including working a minimum number of hours each week. Establishing discriminatory eligibility criteria tied to gender, ethnicity, race, religion, age, country of origin or disability is illegal in any state.
Overtime Pay Regulations
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Overtime pay regulations in Michigan require an employer to pay an hourly worker a higher wage for every hour the employee works over 40 hours over the course of a standard seven-day workweek. This pay rate is equal to 150 percent of the employee's normal hourly wage. For example, an employee who normally earns $20 an hour would earn $30 an hour in overtime pay. It is illegal in Michigan or any other state for an employer to withhold overtime wages past an employee's normal payday or use another form of compensation as a substitute for overtime wages.
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Payment of Fringe Benefits
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Michigan law does not require an employer to offer fringe benefits, including paid vacation or sick leave, to employees regardless of hours worked. An employer choosing to offer fringe benefits to employees must abide by the terms of The Payment of Wages and Fringe Benefits Act. These regulations require an employer to pay employee fringe benefits in accordance with the terms of a written contract or company policy and prohibits reductions in benefits not authorized by law or contract clause. Employees who believe an employer is illegally deducting pay from fringe benefit wages have the right to file a complaint with the Michigan Department of Licensing and Regulatory Affairs.
Collective Bargaining Agreements
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In the case of a workforce represented by a labor union, an employer must abide by the terms of a collective bargaining agreement negotiated between the employer and the labor union's representatives. If the agreement requires benefits of any kind for union employees working longer than 40 hours a week, the employer must abide by those terms. If employees believe the employer is not upholding the terms of the collective bargaining agreement, they may file a complaint with the National Labor Relations Board.
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