Michigan Wage Theft Laws: Minimum Wage, Overtime, and Final Paycheck Rules

Michigan’s Payment of Wages and Fringe Benefits Act (PWFBA) provides strong protections for earned wages including promised fringe benefits, and the state’s Department of Labor and Economic Opportunity enforces wage claims through an accessible administrative process.

Minimum Wage in Michigan (2025)

Michigan’s minimum wage is $10.33 per hour under the Workforce Opportunity Wage Act (WOWA). Michigan’s minimum wage is subject to scheduled increases.

Note on ongoing litigation. Michigan’s minimum wage has been the subject of ongoing legal battles involving a 2018 ballot initiative that was amended by the legislature. Verify the current rate at michigan.gov/leo as rates may have changed following court decisions in 2024-2025.

Tipped employees. Michigan allows a tip credit. Tipped employees can be paid 38% of the regular minimum wage ($3.93/hour in 2025) if tips bring them to the full minimum wage. If tips fall short, the employer must make up the difference.

Youth wage. Michigan allows employers to pay workers under 18 at 85% of the adult minimum wage ($8.78/hour in 2025) for the first 90 days of employment.

Overtime Pay in Michigan

Michigan generally follows the FLSA overtime standard. Most non-exempt employees earn 1.5 times their regular rate for all hours over 40 in a workweek.

Michigan Overtime Act. Michigan has its own overtime statute that applies to employers not covered by the FLSA (those with annual gross sales under $500,000). Michigan’s overtime rules mirror the FLSA for most practical purposes.

Automotive industry overtime. Michigan’s large automotive manufacturing sector generates significant overtime claims. Workers in production, assembly, and skilled trades are frequently misclassified, and bonuses and shift premiums are frequently excluded from overtime rate calculations in violation of both the FLSA and state law.

Michigan Payment of Wages and Fringe Benefits Act (PWFBA)

The PWFBA is Michigan’s core wage protection statute and is broader than many states’ laws in an important way: it covers not just wages but fringe benefits that have been promised in a written policy.

Coverage of fringe benefits. If your employer has a written policy promising vacation pay, sick pay, severance, bonuses, or other fringe benefits, those promises are enforceable under the PWFBA. An employer cannot unilaterally eliminate a promised fringe benefit without notice.

Vacation payout. Michigan does not require employers to pay out accrued vacation upon termination unless the employer’s written policy promises it. If the policy is silent or says vacation is forfeited upon separation, forfeiture is generally enforceable. But if the policy promises payout, the PWFBA makes it enforceable.

Deduction restrictions. Michigan employers cannot deduct from wages without the employee’s voluntary, written authorization. Deductions for cash shortages, damaged merchandise, or uniforms — without written authorization — are illegal.

Final Paycheck Rules in Michigan

Michigan requires final wages to be paid on the employee’s next regular payday. If the employer does not have a regular payday schedule, payment is due within two weeks after the last day of work.

Fringe benefits in final paycheck. Any fringe benefits that have vested under the employer’s written policy (accrued vacation, for example, if the policy provides for payout) must be included in the final paycheck.

Penalties. Under the PWFBA, an employer who fails to pay final wages is liable for the unpaid wages plus a penalty of up to $1,000 or the amount of unpaid wages (whichever is greater) if the failure was willful. Attorney fees are also recoverable.

Michigan Department of Labor and Economic Opportunity (LEO)

Michigan’s LEO Wage and Hour Division investigates PWFBA and WOWA complaints. The administrative process is accessible:

• File complaints online at michigan.gov/leo/bureaus-agencies/wd/wage-and-hour
• No attorney required
• The agency investigates, contacts the employer, and can order payment
• Investigators can conduct audits and recover wages for groups of workers simultaneously

Filing deadline. PWFBA and WOWA complaints must be filed within 3 years of the last violation.

Real Situations: Common Michigan Wage Disputes

Automotive supplier shift premium exclusions. Michigan’s extensive network of automotive suppliers employs hundreds of thousands of workers. A widespread violation involves paying overtime on base wages while excluding shift differentials, production bonuses, and attendance bonuses from the regular rate calculation. Under the FLSA and Michigan law, all such extra pay must be factored into the regular rate before calculating overtime.

Healthcare worker automatic break deductions. Michigan’s large hospital and long-term care industry frequently applies automatic 30-minute meal break deductions to nurses, aides, and technicians who are regularly interrupted during breaks. When these workers cannot leave the floor and are expected to respond to emergencies, the break time is compensable and the automatic deduction results in underpayment.

Promised severance not paid. Michigan workers whose employers have written severance policies frequently find that severance is withheld after layoffs, reorganizations, or terminations. Under the PWFBA, a written severance policy is an enforceable promise — the employer cannot simply refuse to honor it without triggering a PWFBA violation.

Common Mistakes Michigan Workers Make

Assuming vacation forfeiture is always legal. Michigan workers with written vacation payout policies in their employee handbooks often accept forfeiture when their employer claims the policy changed or was always subject to conditions not spelled out in the handbook. Under the PWFBA, promised fringe benefits are enforceable as written — ambiguities are interpreted against the employer who drafted the policy.

Not filing with both state and federal agencies. Michigan workers who file only with LEO miss the FLSA’s longer limitations period for willful violations (3 years vs. Michigan’s 3 years — comparable, but the federal agency has broader investigation authority). Filing with both preserves all options.

Not including fringe benefits in the wage claim. Workers often file only for unpaid wages and forget that the PWFBA covers promised fringe benefits. A worker owed $2,000 in unpaid wages who also has $3,000 in accrued vacation under a written payout policy has a $5,000 claim, not a $2,000 claim.

How to File a Wage Claim in Michigan

Option 1 — Michigan LEO Wage and Hour Division. File at michigan.gov/leo. Free, no attorney required. Effective for minimum wage, overtime, final paycheck, and promised fringe benefit claims under the PWFBA.

Option 2 — Department of Labor (FLSA). File with the federal Wage and Hour Division for FLSA minimum wage and overtime claims.

Option 3 — Civil lawsuit. Sue in Michigan Circuit Court for PWFBA violations. Recover unpaid wages plus penalty (greater of $1,000 or unpaid wages) and attorney fees for willful violations. Michigan small claims court handles claims up to $6,500 without a lawyer.

Statute of Limitations

Related Guides

• Employment Rights Guide — federal wage and overtime rules that apply in Michigan alongside state law
• Michigan Small Claims Court — sue for unpaid wages up to $6,500 without a lawyer
• Michigan Eviction Notice Requirements — tenant protections for Michigan renters
• Michigan Security Deposit Laws — your rights as a Michigan renter
• Michigan Tenant Rights Guide — complete tenant rights guide for Michigan renters

This article is for informational purposes only and does not constitute legal advice. Michigan wage laws are subject to change following ongoing litigation. Always verify current rates at michigan.gov/leo or consult a licensed Michigan employment attorney. Last reviewed: March 2026.