New legislation raising Michigan’s minimum wage could make tens of thousands of workers, including truck drivers, eligible for overtime pay for the first time. The state and federal minimum wage currently is $5.15 an hour, but when the state minimum wage increases to $6.95 an hour on Oct. 1, exemptions for overtime pay — time and a half when employees work more than 40 hours a week — will expire.
The provision applies to 12 classes of workers, including truck drivers, car salespeople, mechanics and nannies; those employees are exempt from overtime eligibility under federal law as long as Michigan’s minimum wage does not exceed the federal minimum wage. Even doctors and lawyers paid by the hour would be eligible for overtime pay, which is mandatory under Michigan law for all but a few classes of employees, such as agricultural workers and executives or professionals; for most others, time and a half must be paid after they work 40 hours a week.
Requiring overtime would force trucking companies to make difficult choices, said Walter Heinritzi, director of the Michigan Trucking Association. “They would have to absorb that, go out of business or pass on the cost to their customers,” Heinritzi told the Detroit Free Press. Heinritzi said a minority of Michigan’s 200,000 licensed truck drivers are covered under union contracts that already require overtime.
Robert Boonin, an Ann Arbor attorney who specializes in labor law, told the Free Press the change “could have devastating effects on employers who have to pay highly compensated employees overtime for the first time. I’ve talked to some employers about it, and they’re amazed,” Boonin told the Free Press. “They hope the Legislature corrects it.”
Majority Republicans in both houses of the Legislature rushed to approve the bill to derail a Democratic-led petition drive aimed at putting the minimum wage increase before voters in November: The petition drive was dropped. House Republicans were aware of the overtime loophole in the bill after being cautioned about it by business groups, but they decided to pass it quickly and deal with the consequences later, GOP spokesman Matt Resch said. “We’ll see what we need to do to address it,” Resch told the Free Press. “It all happened so quickly.”
Gov. Jennifer Granholm was aware of the overtime provision when she signed the bill last month, said her spokeswoman, Liz Boyd. “The governor knew that,” Boyd told the Free Press. “She enthusiastically signed the bill.”