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In the final minutes before the Michigan Earned Sick Time Act (ESTA) was to take effect, the state house and senate finally reached a compromise regarding the ESTA. This last-minute amendment underscores the fluid nature of policymaking, where deadlines serve not as fixed endpoints but as moments of heightened urgency.
In preparing for the effective date of ESTA, Michigan employers were readily aware of many of the administrative and other difficulties in drafting policies that not only complied with the statute but were workable for their businesses. While the amendment did not fix everyone's wish list, it made substantial changes to the statute and had its biggest change on small businesses. Small employers with 10 or less employees were affected the most. They have until October 1, 2025, to comply with the new ESTA requirements. New businesses will have a three-year grace period after forming to comply with ESTA.
The following chart summarizes the changes:
| Original ESTA law | Amendment
|
|
|---|---|---|
| Eligible employees | All employees, except for those working for the U.S. government, including part-time, temporary, exempt, and non-exempt employees. | Added the following exemptions to ESTA: (1)
employees who work in accordance with a policy that allows the
individual to schedule the employee's own
hours and has a policy that prohibits the employer
from taking adverse personnel action if the individual does not
schedule a minimum number of working hours; (2) unpaid trainees or
unpaid interns; or (3) individuals employed in accordance with the
Youth Employment Standards Act, MCL 409.101-.124.
|
| Covered employers | All employers with at least one employee, except the U.S. government. | Expressly removes a “nonprofit agency”
from the definition of employer.
|
| Accrual rate | One hour of paid sick leave for every 30 hours worked. The statute provided that small employers must allow for 40 hours of paid earned sick time and 32 hours of unpaid sick time. |
|
| Frontloading | The statute did not specifically address the issue of frontloading but was an implicit reading of the statute. The statute did not articulate how front-loading affected implementation of the statute. | Specifies, as an alternative to the accrual method,
employers may choose to frontload 72 hours at the beginning of the
benefit year (40 hours for small businesses). Employers only need
to track how many hours of earned sick time employees have used
annually. No carryover is required if an employer front-loads
earned sick time.
|
| Roll-over requirement | All earned sick time rolls over to the next year,
subject to the usage cap, which may not be lower than 72 hours.
|
|
| Part-Time Employees | Part-Time employees accrued earned sick time at one hour per 30 hours worked. | Employers can frontload the time for part-time
employees at the start of a year if (1) the employer provides the
employee with written notice of how many hours the employee is
expected to work in a year at the time of hire; (2) the amount of
EST is frontloaded and is proportional to the EST that the employee
would accrue if they worked all of the hours expected; and (3) if
the part-time employee works additional hours, the employer must
provide additional EST hours.
|
| Waiting period | 90 days from the first date of employment.
|
120 days from the first date of employment.
|
| Combining ESTA with Paid Time Off | Allows employers to provide PTO in an amount no
less than the same amounts of time as provided under ESTA, and the
time may be used for ESTA reasons, OR any other purpose. The Act
applies to PTO used for purposes stated under the statute. If the
employer's PTO policy complies with the Act, the employer is
not required to provide employees with more time than what is
required under the Act. In other words, if the PTO policy meets the
accrual (72 or 40 for small business) and usage requirements of the
Act, the employer is not required to provide additional sick time.
|
|
| Increments
|
The smallest of hourly increments that the
employer's payroll system uses to account for absences of use
of time.
|
The employer has the choice of using one-hour increments or a smaller increment the employer may use for tracking absences. |
| Notice
|
Employers can require no more than seven
days' notice of the foreseeable need to use EST, or, if not
foreseeable, as soon as practicable.
|
Adds that for unforeseeable events, an employer can
require an employee to give notice in either of the following
manners: (1) as soon as practicable; or (2) in accordance with the
employer's policy on requesting/using sick time or leave IF
(a) on the date of hire, or the effective date of the act,
whichever is latest, employer provides the employee with a written
copy of the policy that includes procedures for how the employee
must provide notice, and (b) that policy allows the employee to
provide notice after the employee is aware of the need for the
unforeseeable earned sick time.
|
| Documentation
|
No timing by which employee to provide supporting
documentation of the need for leave that exceeds three days.
|
Employers may require the employee to provide
documentation to support the use of four or more consecutive days
of earned sick time. Employees must provide documentation within 15
days of the request, but employers cannot delay the start of EST
while waiting for documentation.
|
| Reinstatement
|
Employers required to reinstate earned sick time if
an employee is rehired within six months after separation.
|
Employers required to reinstate earned sick time if
an employee is rehired within two months of separation unless the
employer paid out the unused sick time upon the termination of the
employment relationship.
|
| Enforcement | By department and by private right of action within three years of the alleged violation. | Removes the ability of an employee to go straight
to court if they believe their employer violated the law.
Enforcement responsibilities rest with the Michigan Department of
Labor and Economic Opportunity.
|
| Rebuttable Presumption | Creates a rebuttable presumption of retaliation if an adverse action is taken against an employee within 90 days of various “protected activity.” | Removes the rebuttable presumption. |
Employers are given an additional 30 days to post new posters and provide employees with written notice to each employee about the amount of EST required to be provided under ESTA, the employer's choice on how to calculate a “year,” and the reasons for EST to be used.
Takeaway for Employers
Taft employment attorneys are available to assist companies in evaluating the impact of these amendments on their business and whether updates to their paid time off, vacation, and sick time policies are necessary in light of this new amendment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
