Payment of Wages: Michigan
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- The term wages is broadly defined in the Michigan wage payment law. See Definition of Wages.
- Michigan employers must pay employees' wages in cash or by check or money order. Direct deposit and paycards are also permitted. Employers may require payment of wages by direct deposit or paycard under certain conditions. Civil penalties are imposed for violations of the law. See Wage Payment Methods.
- All Michigan employers must pay wages earned on a regularly scheduled basis, including weekly, biweekly, semimonthly or monthly. Lag time rules vary depending on pay frequency. Compensation for fringe benefits earned, such as time off for sickness or injury, vacation or personal reasons, or bonuses must be paid according to a written contract or policy. Civil penalties are imposed for employer violations. See Pay Frequency.
- Michigan law prohibits wage deductions unless authorized by law, a collective bargaining agreement or the written consent of the employee. Employers that make unauthorized deductions are subject to penalties. See Permitted and Prohibited Wage Deductions.
- Every time employees are paid they must be provided with a pay statement that includes certain information. Electronic pay statements are permitted if all employees can print them out. See Pay Statement Requirements.
- Terminated employees, whether they are terminated involuntarily or they voluntarily resign, must be paid by the next regular payday. Accrued benefits must be paid on termination as provided in a written employment contract or employer policy. An employer that is subject to the state paid sick leave law is not required to pay out unused, accrued paid medical leave upon an employee's separation from employment. Penalties are imposed for violations of the law. See Termination Pay.
- If an employee dies, the employer must pay all of the deceased employee's unpaid wages due to one or more of certain individuals in a specific order, unless prior to death the employee designated to the employer in writing a particular individual to receive the wages in the event of death. See Deceased Employee Wages.
- Wages unclaimed by an employee for one year are considered abandoned property. Employers, including government employers, must report and remit to the Michigan Department of Treasury abandoned property belonging to employees whose last known address is in Michigan. Employers also must notify affected employees within a certain time period that their unclaimed wages will be turned over to the state. Employers that violate the law are subject to serious penalties. See Unclaimed Wages.