Governor Proposes Dramatic Increase in Overtime Pay Threshold

October 25, 2019

Governor Whitmer last week announced that she plans to pursue administrative rules to change the salary threshold under which employers must pay overtime pay. We want to know: How will this proposed increase impact your operations? 

The Governor’s announcement comes just one month after the federal government unveiled its final rule to extend overtime pay eligibility to an estimated 1.3 million workers by lifting the annual salary threshold for overtime wages to $35,568 from the current level of roughly $23,600. This federal regulation requires employers starting Jan. 1 to pay time-and-a-half rates to workers making less than the threshold amount for all hours beyond 40 per week.

Governor Whitmer has indicated that her administration will establish new state-level rules to change the salary threshold under which employers must pay overtime to their workers. Whitmer has not publicly revealed her proposal but a spokesperson for the Governor indicated to the media that a $51,000 annual salary threshold is a "good number to start looking at." From a practical standpoint, this means Michigan workers making up to $51,000 per year would be eligible for overtime pay if they work over 40 hours a week. Most states will continue to operate under the federal regulations, which will be $35,568 come January 1, 2020. 

The Michigan Chamber is opposed to Governor Whitmer’s proposal to increase the salary threshold for overtime pay. We believe this unilateral action by the Governor is reckless because it would take the threshold too high, too fast. A state cannot impose a government mandate of this size and type and not expect it to have a negative effect on the economy and the very workers it is hoping to help. 

Michigan Chamber President & CEO Rich Studley discussed the perils of Gov. Whitmer's proposal on The Frank Beckmann Show, WJR 760 AM, Detroit, last week. Listen now.

We will be urging the Governor to reconsider this move and withdraw this reckless plan. We encourage Chamber members to contact Gov. Whitmer, too. Please contact Wendy Block at wblock@michamber.com with any thoughts, feedback or questions on this proposal and how it will impact your business, employees and/or bottom line.