Overtime Laws in Michigan 2026: Pay Rates, Exemptions & Tax Deduction (2026)

Does Michigan have overtime laws?

Yes. Michigan has its own overtime law under the Improved Workforce Opportunity Wage Act (IWOWA), MCL § 408.934a, which requires nonexempt employees to receive overtime pay at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. The IWOWA applies to employers with two or more employees and covers the State of Michigan and its political subdivisions.

What is the overtime rate in Michigan in 2026?

The overtime rate in Michigan is 1.5 times the employee’s regular rate of pay. Based on the Michigan minimum wage of $13.73/hour (effective January 1, 2026), the minimum overtime rate is $20.60/hour. Michigan does not require double time at any threshold.

Does Michigan require daily overtime?

No. Overtime in Michigan is calculated on a weekly basis only. Working more than 8 hours in a single day does not trigger overtime under the IWOWA or the FLSA unless total hours for the workweek exceed 40. The only exception is the voluntary 14-day work period arrangement available to hospitals and residential care facilities under MCL § 408.934a(3) and 29 U.S.C. § 207(j).

Is mandatory overtime legal in Michigan?

Under both the FLSA and Michigan law, employers can generally require adult employees (age 16 and older) to work overtime. Michigan does not impose additional state-level mandatory overtime restrictions for most workers. At-will employees who refuse overtime may be disciplined or terminated, unless a contract, collective bargaining agreement, or specific law provides otherwise.

Am I exempt from overtime in Michigan?

Exemption depends on both salary level and job duties. Under the FLSA and IWOWA, employees must generally earn at least $684/week on a salary basis and perform executive, administrative, or professional duties to qualify as exempt. Michigan does not impose a higher salary threshold than the federal level. A job title alone does not determine exempt status — the actual duties performed are controlling.

Can salaried employees get overtime in Michigan?

Yes. Being paid a salary does not automatically make an employee exempt from overtime in Michigan. Salaried employees who earn less than $684/week or who do not meet the duties tests under 29 C.F.R. Part 541 are nonexempt and entitled to overtime pay under both the IWOWA and the FLSA.

Is overtime taxed in Michigan?

Overtime pay is subject to both federal income tax and Michigan’s state income tax (4.25% flat rate). However, two deductions now apply: (1) under the federal One Big Beautiful Bill Act (IRC § 225), FLSA-covered nonexempt employees may deduct up to $12,500 ($25,000 joint) of the overtime premium from federal taxable income for tax years 2025–2028; and (2) under Michigan H.B. 4961, the same overtime premium deduction applies to Michigan state taxable income for tax years 2026–2028 (not 2025).

How do I calculate the overtime tax deduction?

For time-and-a-half pay, the deductible amount is one-third of total overtime pay. For example, if you earned $9,000 in total overtime at time-and-a-half, the qualified overtime compensation deduction is $3,000. The IRS confirms this calculation method in Notice 2025-69. This same one-third method applies for both the federal and Michigan state deductions.

How do I file an overtime complaint in Michigan?

File a wage claim online at https://www.michigan.gov/wageclaim or with the LEO Wage and Hour Division by mail (P.O. Box 30476, Lansing, MI 48909). The deadline to file a minimum wage and overtime complaint with the state agency is 3 years from the alleged violation. Federal FLSA claims may also be filed with the U.S. DOL Wage and Hour Division at 1-866-487-9243 — federal deadline is 2 years (3 years for willful violations).

Can my employer fire me for refusing overtime in Michigan?

In most cases, yes. Michigan is an at-will employment state, and employers may discipline or terminate employees who refuse mandatory overtime, unless a contract, collective bargaining agreement, or specific law provides otherwise. However, employers cannot retaliate against employees who file overtime wage complaints (29 U.S.C. § 215(a)(3); MCL § 408.940).

Can my employer give comp time instead of overtime pay in Michigan?

Unlike the federal FLSA — which prohibits comp time for private-sector employees — Michigan’s IWOWA permits private-sector employers to offer comp time in lieu of overtime pay, provided certain conditions are met. The employee must voluntarily request it in writing before performing overtime, cannot be required to accept comp time, and comp time accrues at 1.5 hours per overtime hour up to a 240-hour cap. Public-sector employers may also offer comp time under 29 U.S.C. § 207(o).

Does working on weekends or holidays count as overtime in Michigan?

No. Under both the FLSA and the IWOWA, working on weekends or holidays does not automatically constitute overtime. Overtime depends solely on total hours worked in the workweek, regardless of which days those hours occurred. An employee who works 8 hours on a Saturday and remains at or under 40 total hours for the week has not triggered overtime.

What is the statute of limitations for overtime claims in Michigan?

Under Michigan’s IWOWA, employees have 3 years from the date of the alleged violation to file a claim with the LEO Wage and Hour Division or a private action. Under the FLSA, the deadline is 2 years (3 years for willful violations). Michigan’s longer state deadline generally governs when filing with the state agency.

What happens if my employer doesn’t pay overtime in Michigan?

Employees may recover unpaid overtime wages plus an equal amount in liquidated damages (doubling the total recovery), as well as reasonable attorney’s fees and court costs under both the IWOWA and 29 U.S.C. § 216(b). Additionally, the Michigan LEO may assess civil fines of $1,000 per violation against the employer.

Does Michigan have any special overtime rules for nurses or healthcare workers?

Michigan does not have a separate mandatory overtime statute specifically covering healthcare workers. However, hospitals and residential care facilities may use the optional 14-day work period arrangement under MCL § 408.934a(3) and 29 U.S.C. § 207(j), under which overtime is calculated differently (after 8 hours/day or 80 hours/14-day period). This arrangement requires a prior written agreement and is voluntary for employers and employees.

How does Michigan’s IWOWA interact with the FLSA?

When both laws apply to an employer, the provision more favorable to the employee governs. In practice, the IWOWA and FLSA share the same 40-hour weekly overtime threshold and 1.5× pay rate for most workers, so there is substantial overlap. Notable Michigan-specific features include: a longer 3-year state statute of limitations (vs. FLSA’s 2 years), and a unique private-sector compensatory time provision (MCL § 408.934a(8)) that goes beyond what federal law permits for private employers.