Michigan Modifies Pay Frequency Requirements for Monthly Paid Employees
07/01/18
Author: ADP Admin/Monday, July 2, 2018/Categories: State Compliance Update, Michigan
Michigan has modified its pay frequency requirements for monthly paid employees. Employers with established monthly pay periods are in compliance with the wage payment law if they pay all wages earned during the monthly pay period within 15 days after the end of the monthly pay period.
Under current Michigan law, employees paid on a monthly pay frequency must be paid on the 1st of the month following the month in which the wages were earned. For example, all wages earned in June must be paid by July 1. This law made it difficult for employers to close out their payroll for the month and provide paychecks to their employees in short order.
As a result of the enactment of H5235, effective September 2, 2018, “an employer who has established a regularly scheduled monthly pay period is in compliance … if the employer pays to the employee, within 15 days after the end of a monthly pay period, all wages earned during the monthly pay period.”
HB 5235 also provides the following in relation to weekly, bi-weekly pay frequencies and payment of overtime wages:
An employer who has established a regularly scheduled weekly or biweekly payday is in compliance … if both of the following conditions are met: (a) Wages are paid to the employee on the established regularly recurring payday. (b) The payday occurs on or before the fourteenth day following the end of the work period in which the wages are earned.
For employees’ overtime earnings earned during the month of December that would, in compliance with this section, be paid to the employees after the sixteenth of December, an employer is in compliance with this section if both of the following conditions are met: (a) Employees receive all their wages, except overtime, for the month of December on or before the employees’ regularly scheduled payday. (b) All overtime wages earned during the month of December are paid on or before the next regularly scheduled payday following the payday in which the overtime would otherwise be paid.
It is important to note that H5235 provides that an “employer may pay wages more often than required by this section.”
For a copy of H5235 please click here.
Coverage: Employers with employees in Michigan.
Effective: September 12, 2018.
Action Required: Employers should review their payroll practices and revise, if necessary, to ensure employees are paid in a timely manner.
If you have any questions, please contact your Payroll Service Representative or your HR Business Partner.
Disclaimer: This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.
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