Michigan’s Earned Sick Time Act: Common Questions from Employers

All Michigan employers, except the U.S. government, must adjust or implement policies to comply with ESTA requirements. ESTA applies, regardless of industry, to employers that employ one or more employees in Michigan.

All employees are eligible, regardless of classification. Salaried exempt employees under the Fair Labor Standards Act are presumed to work 40 hours per week or, if their position is based on a weekly schedule of fewer than 40 hours, their regular number of scheduled hours.

If employees are covered by a collective bargaining agreement (CBA), the Act will apply to such employees starting on the CBA’s expiration date, regardless of any provisions extending the CBA’s duration. If a particular CBA is silent as to sick time or PTO benefits, Labor and Economic Opportunity Commission (LEO) has stated that the Act may apply beginning on February 21, 2025.

Beginning February 21, 2025, or upon the employee’s start date, whichever is later, employees will accrue 1 hour of sick time for every 30 hours worked. Employers may require new employees to wait 90 days after hire to use accrued sick time, but accrual begins immediately upon hire.

• Small businesses (fewer than 10 employees as calculated under the statute): Must provide up to 40 hours of paid earned sick time, with an additional 32 hours unpaid.
• All other employees: Must provide up to 72 hours of paid earned sick time per year.

Yes. All accrued and unused sick time must carry over to the following year. ESTA does not impose a cap on accrual or carryover.

Yes. Employers may frontload the full years’ worth of sick time at the beginning of the benefit year. However, the frontloading method implemented must comply with the ESTA’s accrual, usage, carryover and other provisions.

No. The statute does not require employers to payout unused time. Employers should check and confirm their written policies align with their desired practices concerning payout, as a separate law requires employers to follow the policies they have set forth in writing. 

The transition to ESTA compliance will vary depending on an employer’s current policies, workforce structure, technology, and their priorities related to cost, culture, level of administrative effort, and the like. Employers should first familiarize themselves with ESTA requirements. Then evaluate their existing leave policies and their hierarchy of priorities in comparison with ESTA’s requirements to determine whether a new standalone ESTA policy or modification of existing policies meets their business needs. Employers should then draft new or amended policies that comply with the ESTA, for implementation in accordance with the Act. Employers should also review and confirm that their payroll and recordkeeping systems are equipped for ESTA compliance by the effective date and should train managers and personnel who will have new responsibilities associated with the Act.  

ESTA is scheduled to take effect on February 21, 2025. Although major changes are not currently expected ongoing legislative action between now and the effective date could lead to some changes in the act’s requirements. For most employers, the appropriate course may be to prepare for compliance by the deadline while staying informed about potential changes, and to implement on the Act’s actual effective date rather than sooner.