09/05/2006
On Tuesday, Sept. 5, the state House voted on final passage of legislation to reinstate certain overtime exemptions and to create a lower minimum wage for younger workers.
The final bills will allow for federal exemptions to an increased minimum wage remain in place, provide low-income residents with a state earned income tax credit (similar to the current federal EITC), as well as create a lower minimum wage for younger workers. The youth wage bill in the package, Senate Bill 1364 was approved on strong bipartisan 92-14 vote.
NFIB has been working for passage of legislation to reinstate overtime exemptions that will be lost due to Michigan's minimum wage being higher the current federal minimums. This situation arose due to action by the state Senate and House earlier this year that raised the minimum wage to $6.95 by Oct. 1, 2006; to $7.15 by July 1, 2007; and $7.40 by July 1, 2008. We have also been working for passage of a lower minimum "training" wage for workers under the age of 18.
Without this legislation, certain overtime exemptions would have expired Oct. 1, and approximately 370,000 Michigan employees would have lost their federally granted overtime exemptions resulting in lost jobs and increased costs for Michigan business.
A new youth training minimum wage will also be established for workers who are younger than 18. The wage will be 85 percent of the new minimum wage rates set to begin on Oct. 1. The new minimum wage rates will be as follows:
18 years of age or over:
- $6.95 by Oct. 1, 2006
- $7.15 by July 1, 2007
- $7.40 by July 1, 2008
Under 18 years of age:*
- $5.91 by Oct. 1, 2006
- $6.08 by July 1, 2007
- $6.29 by July 1, 2008
*Actual rates may be a penny higher or lower depending on rounding.
The legislation also included an earned income tax credit for low-income workers, new overtime requirements for certain at-home health care workers and at-home daycare employees.
The governor has indicated that she will sign the legislation.
