The Michigan Earned Sick Time Act (ESTA) was set to take effect on February 21, 2025. The act requires employers to provide paid sick leave to their employees.
Here are some key points:
Accrual and Usage
- Accrual Rate: Employees accrue one hour of sick leave for every 30 hours worked. There is no cap on accrual, but employers can cap usage at 72 hours per year for large employers (over ten employees) and 40 hours per year for small employers (ten or fewer employees).
- Carryover: Employers may limit the amount of carryover to 72 hours for large employers and 40 hours for small employers.
- Frontloading: Employers can frontload 72 hours of sick leave at the start of the benefit year for large and 40 hours for small employers. If frontloading, employers are not required to carry over, track accrual, or pay out sick leave at the end of the year.
Waiting Period
- New Employees: Employers can require new employees to wait 120 days before using sick leave. However, accrual or frontloading is still required at the start of employment.
Combining with PTO
- PTO Policy: Sick leave can be combined with a Paid Time Off (PTO) policy, provided the PTO policy meets the ESTA requirements. PTO time can be used for sick leave purposes or any other purpose.
Rate of Pay
- Payment: Sick leave should be paid at the normal hourly wage or base rate, but not less than minimum wage. Overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, tips, and gratuities are not included in the normal hourly wage/base rate.
Notice Requirements
- Foreseeable Leave: Employers may require seven days’ notice for foreseeable sick leave.
- Unforeseeable Leave: If the need for leave is unforeseeable, notice should be given as soon as practicable.
Exemptions
- Exempt Employees: Certain gig workers, unpaid interns, trainees, and minors are not eligible for earned sick time.
Compliance
- Small Employers: Small employers have until October 1, 2025, to comply with several ESTA requirements, including the accrual or frontloading paid earned sick time.
These amendments aim to provide greater clarity and flexibility for employees and employers, ensuring that employees have access to necessary sick leave while making it easier for employers to manage.
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