Well, it happened. After many months of political wrangling, and the very day we printed the enclosed Insight newsletter (which we had held up for this reason), the Republicans and Democrats in the Michigan Legislature and Governor Granholm found an acceptable compromise that largely moots the overtime problem addressed in our newsletter's lead article. So this topic is now essentially a matter of historical interest – and an apt illustration of the maxim that elected representatives should not hurry things through the legislative process in an election year without fully analyzing the consequences.

The compromise package put together on August 30 reinstates the overtime ineligibility rule for the various types of federally exempt workers discussed in our article. An exception was carved out, however, for certain child care and domestic companionship workers who may now be eligible for overtime under Michigan law as of October 1 even though they are exempt under federal law.

The increase in the Michigan minimum wage from $5.15 to $6.95 per hour effective October 1, with two additional bumps upward in 2007 and 2008, remains intact though the compromise package contains two new exceptions: a “training wage” of $4.25 for the first 90 days on the job for workers under the age of 20; and an 85% reduced minimum wage (i.e., $5.90) for workers under the age of 18.

The key to breaking what appeared to be an irresolvable political impasse – one that promised to create fiscal and administrative havoc for countless Michigan employers as of October 1 – was the agreement by Republican legislators to establish a new Michigan earned income tax credit to assist low-income working families. Everyone at the State capitol was able to claim some credit for doing a good thing.

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