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Wage & Hour Laws -- Employee

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What are the rules on final paychecks in Michigan?

The rules on final paychecks in Michigan help make sure that employers across the state pay final paychecks in the correct way. They provide legal assurance to employees from Detroit to Ann Arbor that they will receive their unpaid wages when they leave a job.

Being laid off or quitting a job can be a demanding time in any person’s life, so it really helps to understand the basics of what Michigan law says about how and when a final paycheck should be paid.

When should a final paycheck be paid in Michigan?

Wherever you live in Michigan, if you resign from your employer, the final paycheck should be paid no later than the next scheduled payday. This should include all wages that an employee has earned but not yet received.

This is also true for employees who have been fired from their roles. The final paycheck should be paid at the time of the company’s next regular payday for the period when the termination happened.

Is unused vacation part of the final paycheck in Michigan?

In Michigan, an employer has no legal obligation to offer any vacation days to its employees. However, state law says that all fringe benefits – including vacation pay – which an employer does offer to its employees must be paid in accordance with the employment contract or the employer’s own written policy. These fringe benefits cannot be withheld unless the employee has freely agreed to the withholding in writing.

Is an employer allowed to withhold the final paycheck for any reason?

An employer is not allowed to withhold the payment of unpaid wages in a final paycheck. However, it might be legally allowed to make deductions from the final paycheck for certain reasons. These include:

  • Deductions required by law, such as taxes and payments related to a court order
  • Any deduction that the employee has consented to in writing, such as a charitable donation

Who receives a final paycheck if an employee dies?

If an employee dies, the law in Michigan says that their outstanding wages will be paid, in descending order of priority, to the employee’s spouse, children, mother or father, or sister or brother. The unpaid wages will include any fringe benefits, such as vacation pay and bonuses, which are specified in the employer’s written policy or employment contract.

What are the options if an employer doesn’t pay the final paycheck?

If an employer doesn’t pay a final paycheck as they should, an employee can file a complaint with Michigan’s Department of Licensing and Regulatory Affairs, Wage and Hour Division. This complaint must be filed within twelve months of leaving the employer.

Valid complaints will be investigated and the department will first aim to informally resolve the issue. If this is unsuccessful, it will make a formal statement on any violations it has found within 90 days of the complaint. If there is a violation, an employee could receive the unpaid wages, as well as legal costs and a penalty payment.

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