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Summary of differences between federal and state regulations
Federal regulations restrict the types of deductions that can be made from an employee’s wages or salary. Deductions can be made in certain cases, but the legality often depends on the nature and purpose of the deductions, as well as the status of the employee as exempt or non-exempt.
Michigan allows any deduction required by law (i.e. taxes, friend of the court payments) and union dues. All other deductions require the employer to get the employee’s signed authorization before the deduction is made. The employer is required to itemize deductions on the pay stub. A deduction may not reduce the employee’s gross wages to below minimum wage.
The state law clarifies that “a deduction for the benefit of the employer requires written consent from the employee for each wage payment subject to the deduction.” This appears to mean that a new authorization is needed for each pay period in which a deduction is made.
An employer may deduct for an overpayment of wages or fringe benefits within six months of the error without the employee’s written consent if caused by a mathematical miscalculation, typographical error or misprint and the employer gives the employee a written explanation one pay period before the deduction is made. The amount of such a deduction cannot exceed 15 percent of the employee's gross wages in any pay period.
Effective September 30, 2015, if an employer pays any amount of an employee's debt under a default judgement (wage garnishment), the employer may recover that amount from the employee's wages without the written consent of the employee if (a) the employer provides the employee with a written explanation of the deduction at least one pay period in advance, (b) the deduction is nor more than 15% of the employee's gross wages, (c) the deduction is made after other deductions, and (d) the deduction does not reduce the gross wages below the minimum wage.
State
Contact
Michigan Department of Licensing and Regulatory Affairs, Wage and Hour Division
Regulations
Federal
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Regulations
For non-exempt employees:
29 CFR Part 531, Wage Payments under The Fair Labor Standards Act of 1938
For exempt employees:
29 CFR Part 541, Subpart G, Salary Requirements