Legislative Analysis
Phone: (517) 373-8080
WAGE THEFT PENALTIES http://www.house.mi.gov/hfa
House Bill 4402 as reported from committee Analysis available at
Sponsor: Rep. Regina Weiss http://www.legislature.mi.gov
House Bill 4403 as reported from committee
Sponsor: Rep. Will Snyder
House Bill 4404 as reported from committee
Sponsor: Rep. Penelope Tsernoglou
Committee: Labor
Complete to 12-7-24
SUMMARY:
Together, House Bills 4402, 4403, and 4404 would increase the penalties for wage theft
and other violations of 1978 PA 390, which regulates the payment of wages and fringe
benefits to employees. The bills would take effect 90 days after enactment.
House Bill 4403 would amend 1978 PA 390 to provide that an employer who does not pay
the wages and fringe benefits that are due to an employee, with the intent to defraud, is
guilty of a crime. Currently, an employer’s failure to pay employees with an intent to
defraud is a misdemeanor punishable by up to one year’s imprisonment, a fine of up to
$1,000, or both, in all circumstances.
House Bill 4403 would prescribe violations and penalties based on the value of the wages
and benefits due to an employee.
If the wages and benefits have a value of less than $200, a first violation would be a
misdemeanor punishable by up to 93 days’ imprisonment, a fine of up to the greater of
$500 or three times the value of the wages and benefits, or both. A subsequent violation
would be a misdemeanor punishable by up to one year’s imprisonment, a fine of up to the
greater of $2,000 or three times the value of the wages and benefits, or both.
If the wages and benefits have a value of at least $200 but less than $1,000, a first violation
would be a misdemeanor punishable by up to one year’s imprisonment, a fine of up to the
greater of $2,000 or three times the value of the wages and benefits, or both. A subsequent
violation would be a felony punishable by up to five years’ imprisonment, a fine of up to
the greater of $10,000 or three times the value of the wages or benefits, or both.
If the wages and benefits have a value of at least $1,000 but less than $20,000, a first or
second violation would be a felony punishable by up to five years’ imprisonment, a fine of
up to the greater of $10,000 or three times the value of the wages and fringe benefits, or
both. A third or subsequent violation would be a felony punishable by up to 10 years’
House Fiscal Agency Page 1 of 5
 imprisonment, a fine of up to the greater of $15,000 or three times the value of wages and
benefits owed, or both.
If the wages and benefits have a value of at least $20,000 but less than $50,000, a violation
would be a felony punishable by up to 10 years’ imprisonment, a fine of up to three times
the value of the wages or benefits owed, or both.
If the wages and benefits have a value of at least $50,000 but less than $100,000, a violation
would be a felony punishable by up to 15 years’ imprisonment, a fine of up to three times
the value of the wages and benefits owed, or both.
Finally, if the wages and benefits have a value of $100,000 or greater, a violation would be
a felony punishable by up to 20 years’ imprisonment, a fine of up to three times the value
of the wages and benefits, or both.
MCL 408.485
House Bill 4402 is a companion bill to HB 4403 that would add the felonies proposed by
HB 4403 to the sentencing guidelines provisions of the Code of Criminal Procedure.
A second or subsequent violation involving wages and benefits with a value of more than
$200 but less than $1,000, or any violation involving a value of more than $1,000 but less
than $20,000, would be a class E felony against the public trust with a statutory maximum
term of imprisonment of five years.
A second or subsequent violation involving a value of more than $1,000 but less than
$20,000, or any violation involving a value more than $20,000 but less than $50,000, would
be a class D felony against the public trust with a statutory maximum term of imprisonment
of 10 years.
A violation involving a value of more than $50,000 but less than $100,000 would be a class
C felony against the public trust with a statutory maximum term of imprisonment of 15
years.
A violation involving a value of $100,000 or more would be a class B felony against the
public trust with a statutory maximum term of imprisonment of 20 years.
The bill is tie-barred to House Bill 4403, meaning that it cannot take effect unless HB 4403
is also enacted.
MCL 777.14b
House Bill 4404 would amend 1978 PA 390 to increase the penalty for an employer who
violates sections 2 to 8 of the act. Currently, such an employer must pay a penalty at the
rate of 10% annually on the wages and fringe benefits due to an employee, beginning at
the time an employer is notified that a complaint has been filed with the Department of
House Fiscal Agency HBs 4402, 4403, and 4404 as reported Page 2 of 5
 Labor and Economic Opportunity (LEO) and ending when the payment is made. The bill
would increase this to 100% of those wages and benefits. (Employers must also pay any
wages or benefits due to the employee.)
Generally speaking, sections 2 to 8 of the act do the following:
• Section 2 requires employers to pay their employees on a regular schedule.
• Section 3 requires employers to pay all benefits as outlined in employment
contracts and policies.
• Section 4 prohibits employers from withholding compensation due to an employee
to be paid at their termination date without the employee’s consent.
• Section 5 requires an employer to pay all earned wages to a former employee as
soon as possible.
• Section 6 governs the methods that an employer may use to pay wages to
employees.
• Section 7 prohibits employers from deducting from an employee’s wages without
the employee’s consent unless expressly permitted by law or a collective bargaining
agreement.
• Section 8 prohibits employers and their agents or representatives from requiring or
receiving from an employee a fee, gift, tip, gratuity, or other remuneration or
consideration as a condition of employment or continuation of employment.
The civil fine that LEO could assess to an employer for a violation would be increased
from $1,000 to $10,000.
In addition, the act now allows LEO to order a violating employer to pay up to two times
the amount of wages and benefits due to an employee, if the violation is flagrant or
repeated. The bill would increase this limit to three times the amount of wages and benefits
due.
MCL 408.488
FISCAL IMPACT:
House Bill 4403 would have an indeterminate fiscal impact on the state and on local units
of government. The number of convictions that would result from employers not paying
wages and fringe benefits due to employees is not known. Violations could be either
misdemeanors or felonies, depending on the value of the wages and fringe benefits owed.
New misdemeanor convictions would increase costs related to county jails and/or local
misdemeanor probation supervision. Costs of local incarceration in county jails and local
misdemeanor probation supervision, and how those costs are financed, vary by jurisdiction.
New felony convictions would result in increased costs related to state prisons and state
probation supervision. In fiscal year 2023, the average cost of prison incarceration in a state
facility was roughly $48,700 per prisoner, a figure that includes various fixed
administrative and operational costs. State costs for parole and felony probation
supervision averaged about $5,400 per supervised offender in the same year. Those costs
are financed with state general fund/general purpose revenue. The fiscal impact on local
House Fiscal Agency HBs 4402, 4403, and 4404 as reported Page 3 of 5
 court systems would depend on how provisions of the bill affected court caseloads and
related administrative costs. It is difficult to project the actual fiscal impact to courts due
to variables such as law enforcement practices, prosecutorial practices, judicial discretion,
case types, and complexity of cases. Any increase in penal fine revenue collected would
increase funding used to support public and county law libraries, which are the
constitutionally designated recipients of those revenues.
House Bill 4402 is a companion bill to House Bill 4403 and would amend the sentencing
guidelines chapter of the Code of Criminal Procedure to include new classes of felonies for
violating provisions of the Payment of Wages and Fringe Benefits Act with intent to
defraud. Offenses would be based on values and would be either Class B, C, D, or E felony
offenses against the public trust and would be punishable by a statutory maximum ranging
from 5 years to 20 years depending on the class. The bill would not have a direct fiscal
impact on the state or on local units of government.
House Bill 4404 would have an indeterminate fiscal impact on the state and on local units
of government. Currently, the department is authorized to assess a civil fine of not more
than $1,000 against an employer that violates provisions of the Payment of Wages and
Fringe Benefits Act. Civil fine revenue collected is credited to the state general fund. Under
the bill, the civil fine amount would be increased from $1,000 to $10,000. Because there is
no practical way to determine the number of employers that would violate and be assessed
a fine, an estimate of additional revenue the state would collect cannot be made. The fiscal
impact on local court systems would depend on the number of civil actions initiated by the
department and/or the attorney general and how the number of civil actions initiated affects
court caseloads and related administrative costs.
POSITIONS:
Representatives of the following entities testified in support of the bills (4-13-23):
• Integrity Interiors Inc.
• Michigan Association for Justice
• Michigan Regional Council of Carpenters and Millwrights
• Woods Construction
The following entities indicated support for the bills:
• Michigan Department of Labor and Economic Opportunity (12-5-24)
• American Association of University Women of Michigan (12-5-24)
• IBEW Michigan State Conference (4-13-23)
• Michigan Laborers District Council (12-5-24)
• Michigan League for Public Policy (12-5-24)
• United Food and Commercial Workers Local 876 (12-5-24)
The Michigan Immigrant Rights Center indicated support for House Bill 4404. (12-5-24)
The Michigan Immigrant Rights Center indicated a neutral position on House Bills 4403
and 4403. (12-5-24)
House Fiscal Agency HBs 4402, 4403, and 4404 as reported Page 4 of 5
 Representatives of the following entities testified in opposition to the bills (4-13-23):
• Michigan Chamber of Commerce
• National Federation of Independent Business
The following entities indicated opposition to the bill: (12-5-24)
• Associated Builders and Contractors of Michigan
• Detroit Chamber
• Home Builders Association of Michigan
• Michigan Bankers
• Michigan Manufacturers Association
• Michigan Retailers Association
• Small Business Association of Michigan
Legislative Analyst: Holly Kuhn
Fiscal Analyst: Robin Risko
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency HBs 4402, 4403, and 4404 as reported Page 5 of 5


Statutes affected:
House Introduced Bill: 408.485