Erika Scanlin, President & Talent Strategist of EG Workforce Solutions

Understanding Michigan’s Earned Sick Time Act

2025 will be a critical year for Michigan employers when it comes to workforce management and compliance. Businesses navigating this requirement must understand the nuances of the law and implement necessary adjustments. As experts in workforce solutions and compliance, our Talent Strategists have meticulously reviewed ESTA and its upcoming requirements in order to help employers stay ahead. We sat down with Erika Scanlin, EG to break down the changes and answer common questions.

Q: What is Michigan’s Earned Sick Time Act?

A: Starting February 21, 2025, employers in Michigan are required to provide accrued paid sick time to their employees. If you already provide paid sick time, you may still need to adjust your policies to comply with ESTA.

Q: Which employers are affected?

A: All Michigan employers with one or more employee(s). If an employer is not located in Michigan, but employs workers physically located in Michigan, ESTA applies to those workers. Exempt from ESTA: U.S. government employees and railway workers/employers covered by the Railroad Unemployment Insurance Act (RUIA).

Q: What are the new requirements?

A: Starting February 21, 2025, employees will accrue a minimum of one hour paid sick time for every 30 hours worked. Under ESTA, employers can cap paid earned sick time to 72 hours per year. However, employers can select a higher limit if they choose, but it is not a requirement. A benefit year is a consecutive 12-month period determined by the employer.

The requirements are different for small businesses, which are defined as having nine or fewer employees. Small business employees will accrue a minimum of one hour paid sick time for every 30 hours worked. If an employee accrues more than 40 hours of earned sick time in a calendar year, they are also entitled to an additional 32 hours of unpaid earned sick time. Moreover, they must be allowed to use paid earned sick time before using unpaid sick time. Under ESTA, small business employers can cap paid earned sick time to 40 hours per calendar year, but can raise that limit if they choose.

Q: An employee wants to use earned sick time. Which scenarios are approved?

A:

• Employee or employee’s family member’s mental or physical illness, injury, or health condition. Treatment and preventative care are included.
• Employee or employee’s family member is a victim of domestic violence or sexual assault and need medical or psychological care, victim services, or will participate in court proceedings related to the case.
• Meetings at child’s school or place of care related to child’s health or disability.
• Employee’s need to care for child whose school or place of care has been closed by public official due to public health emergency.
• Employee or employee’s family member is at risk of jeopardizing the health of others due to exposure to communicable disease (must be determined by health care provider or health authority).

Q: Can employees roll over unused paid sick time into a new year?

A: Yes. However, employers are not required to allow employees to use more than the maximum allowed annual paid sick time (paid or unpaid) in the 12-month period. Additionally, employers are not allowed to pay out unused sick leave in lieu of rolling over unused hours into the next year.

Q: What happens when an employee is terminated or leaves the company?

A: Terminated employees do not need to be paid for unused accrued earned sick time. If an employee leaves and returns to the company within six months, their balance upon separation would be reinstated. Also, if an employee “frontloads” their sick leave and then departs the company before accruing that time, the employer may recoup that negative amount as long as it does not reduce the final paycheck to less than minimum wage and the employer obtained a prior written, voluntary agreement for the deduction.

Q: I’m an employer. What record-keeping requirements do I need to know about?

A: Under ESTA, employers must keep record of employees’ hours worked and earned sick time taken for at least three years. Now is the time for employers to review ESTA requirements with their HR teams and determine how to best update policy books, onboarding documents, and internal record keeping processes to make this a smooth transition.

Important Resources

• REQUIRED POSTER: Employers must display this poster in their workplace by February 21, 2025 to notify employees of ESTA rights. Here is the Spanish version.
• BROCHURE: Overview of ESTA and state contact information
• MORE FAQ: Here are more questions and answers from the state of Michigan.

Find Support With EG

We know navigating these changes can be overwhelming. Our list of FAQs above just scratches the surface and you may have more questions. EG Workforce Solutions stands ready to support our clients and help you understand the impact of this legislation for 2025 and beyond. Whether it’s keeping a finger on the pulse of workforce compliance issues or developing innovative solutions to spur value-driven growth, our Talent Strategists are solving real challenges for employees and employers. Contact us today to learn how EG Workforce Solutions can help you succeed.

*Please note, the above information should not be considered official legal advice. Consult your attorney for legal questions regarding ESTA.