Wage and Fringe Benefit Act

Q: What is the Wage and Fringe Benefit Act?

A: The Wage and Fringe Benefit Act was enacted by the Michigan Legislature in 1978 to regulate the time and manner of payment of wages and fringe benefits to employees. The Act also regulates the authority of the employer to take deductions from the wages or fringe benefits due to be paid to the employee.

Q: Under what circumstances may an employer take deductions from an employee’s wages?

A: The Act generally limits the employer from taking deductions from an employee’s wages unless the deduction is authorized by law, by collective bargaining agreement, or by the voluntary written consent of the employee. The Act also allows the employer to take deductions from the employee’s wages in certain circumstances to correct a payroll error that results in an overpayment of wages.

Q: Under what circumstances can an employer take deductions to correct an overpayment of wages without the consent of the employee?

A: The overpayment of wages must have occurred as a result of a mathematical miscalculation, typographical error, clerical error, or misprint. The deduction must be taken within six (6) months after making the overpayment and the employee must be given written notice of the deduction at least one pay period before the deduction is taken. Finally, the amount deducted may not be greater than 15% of the employee’s gross wages for the pay period nor may the deduction reduce the employee’s wages below the minimum wage required by law.

Q: Can the employer withhold an employee’s final paycheck until the employee returns employer equipment?

A: No, the Act prohibits the employer from withholding pay or taking deductions from the employee’s wages unless the deduction is authorized by law, collective bargaining agreement, or the employer obtains the voluntary written consent of the employee.