Michigan to Make Overtime Available to More Workers

Tens of thousands of Michigan workers will become eligible for overtime pay if a new Michigan minimum-wage law takes effect in October. Michigan Public Radio's Rick Pluta reports that some of those affected — including car salesmen, truck drivers, and commercial fishermen — already earn high wages.

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RENEE MONTAGNE, host:

On Wednesdays, we look at the workplace. Today, one state's efforts to boost worker pay.

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Michigan this fall will become the 17th state to raise its minimum wage to a rate higher than the $5.15 mandated by the federal government.

Low wage earners are not the only ones who stand to benefit. Some highly paid workers could be in for what some say is an unintended boost in their pay, and this development has some businesses in Michigan up in arms.

Michigan Public Radio's Rick Pluta reports.

Mr. RICK PLUTA (Reporter, Michigan Public Radio): Michigan's new wage law will change how federal rules affect overtime pay. Several categories of workers, who are now exempt from overtime pay, will be eligible for time-and-a-half, after putting in 40 hours in a week.

These include people who work odd or fractured shifts, such as truck drivers and live-in nannies. They also include some highly paid professionals who charge by the hour, and salespeople who work on commissions. And that has Leo Jerome hopping mad.

Jerome owns three car dealerships in mid-Michigan, and his salespeople work six days a week. Their pay is a combination of salary plus commissions, and Jerome says he can't afford time-and-a-half one day a week for everyone.

Mr. LEO JEROME (Chairman and CEO, Jerome Enterprises): I suppose if we have to limit the hours that our people can do it, because if you have to pay time-and-a-half, I can't do it.

Mr. PLUTA: Jerome says he'll be less likely to keep marginal performers who would otherwise be given more chances, and less likely to hire new, young salespeople who don't sell as many cars and trucks.

Six days a week, Jeff Sears(ph) wanders through rows of shiny new Chryslers and Jeeps, looking to turn browsers into buyers. He spots a young couple eyeing minivans.

Mr. JEFF SEARS: Hi folks. How are you today?

Unidentified Woman: Okay. How are you?

Mr. SEARS: You need some assistance?

Unidentified Man: (unintelligible) for a minivan.

Mr. SEARS: My name's Jeff Sears...

Mr. PLUTA: Sears is a top performer at his lot, typically selling three cars a week. But it's been a little slow lately, and Sears says from day to day he never knows when he's going to make a sale. He says reduced hours on the lot would probably cost him money. He says salespeople could learn to be more efficient, finding other ways to cultivate prospects, such as letters and phone calls. But Sears doesn't think he would sell as many cars.

Mr. SEARS: It could absolutely result in lost sales. When you're not here, you can't sell.

Mr. PLUTA: Some Democratic politicians and labor leaders in the state say there are plenty of people who will benefit from the new time-and-a-half rule. Michigan's Governor, Jennifer Granholm, says she's comfortable with her decision to sign the minimum wage hike.

Governor JENNIFER GRANHOLM (Democrat, Michigan): Believe me, this was all considered. If there needs to be any adjustments going forward, we can do that. But the bottom line is Michigan got a raise.

Mr. PLUTA: In fact, Democrats say that Republicans in the Michigan legislature never really wanted to pass a higher minimum wage law. Congress has not raised the federal minimum wage since 1997. So labor organizations have been mounting a nationwide campaign to boost the minimum wage, state-by-state.

In Michigan, labor unions and Democrats launched a petition drive to get a minimum wage increase on the November ballot. Once it became evident the drive was going to succeed, Republicans decided to get in front of the issue by passing their own minimum wage increase.

But Wendy Hofmeyer, of the Michigan Chamber of Commerce, says Republicans got too far in front, and created this unintended consequence.

Ms. WENDY HOFMEYER (Director of Health Policy and Human Resources, Michigan Chamber of Commerce): There are going to be real-world implications if this actually were to go into effect on October 1, and we want to make sure that we're protecting those jobs.

Mr. PLUTA: But Democrats say Republicans should live with the law they passed. And some Republicans are reluctant to reopen the debate over the minimum wage law with elections drawing near. They say businesses may have to just pay those workers overtime, at least until after the November elections.

For NPR News, this is Rick Pluta, in Lansing, Michigan.

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