Effective February 21, 2025, the transition from the Paid Medical Leave Act (PMLA) to the Earned Sick Time Act (ESTA) will bring some changes, though not a complete overhaul. Michigan's Department of Labor & Economic Opportunity will continue to enforce the law, now with rulemaking authority. This summary covers the key points:
Jurisdiction and Source of Law
- Statewide: Michigan
- Legal Basis: MCL 408.961 to 408.974, adopted as P.A. 338 in 2018, reinstated by Mothering Justice v. State of Michigan (2024).
MCL - Act 338 of 2018 - Michigan Legislature
- Covered Employers: All employers with one or more employees, except the US government.
Leave Amount and Accrual
- Accrual Rate: 1 hour of paid leave for every 30 hours worked.
- Usage: Can be used as accrued, with a 90-day waiting period for new employees.
- Usage Caps:
- 1-9 employees: Up to 40 hours of paid leave and 32 hours of unpaid leave per year.
- 10+ employees: Up to 72 hours of paid leave per year.
- Benefit year: A regular and consecutive twelve-month period determined by the employer that is used to calculate an eligible employee's benefits.
- Carryover: All unused earned sick time carries over from year to year; however, an employer is not required to permit an employee to use more than the annual allowed maximum time (paid or unpaid) in a 12-month period.
- Frontloading:
- Employers limiting the use of earned sick time to 72 hours or more may provide the total amount of allowed hours at the beginning of the 12-month period (often referred to as "frontloading").
- Because there is no limit on the amount an employee can accrue and carryover, employers should evaluate employee's accruals at least annually to ensure that accrued hours are balanced to hours worked and carryover any balance.
Permitted Uses
- An employer shall permit an employee to use the accrued earned sick time for any of the following:
- The employee’s or the employee’s family member’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s or the employee’s family member’s mental or physical illness, injury, or health condition; or preventative medical care for the employee or the employee’s family member.
- If the employee or the employee’s family member is a victim of domestic violence or sexual assault, for medical care or psychological or other counseling for physical or psychological injury or disability; to obtain services from a victim services organization; to relocate due to domestic violence or sexual assault; to obtain legal services; or to participate in any civil or criminal proceedings related to or resulting from the domestic violence or sexual assault;
- For meetings at a child’s school or place of care related to the child’s health or disability, or the effects of domestic violence or sexual assault on the child; and
- For closure of the employee’s place of business by order of a public official due to a public health emergency; for an employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency; or when it has been determined by the health authorities having jurisdiction or by a health care provider that the employee’s or employee’s family member’s presence in the community would jeopardize the health of others because of the employee’s or family member’s exposure to a communicable disease, regardless of whether the employee or family member has actually contracted the communicable disease.
Effective Date
- February 21, 2025. For employees covered by a collective bargaining agreement, please see application sections of the ETSA.
Existing Policies
- An employer's paid time policy may be used so long as it provides at least the same benefits as provided in the ESTA, and may be used for the same purposes, under the same conditions, and accrued at a rate equal to or greater than the rate described in the ESTA.
- For small business employers, employees must be allowed to use paid earned sick time before using unpaid sick time.
Posting
- Posting is required in English, Spanish, and any language that is the first language spoken by at least 10% of the employer's workforce provided the department has provided a translation.
GENERAL REQUIREMENTS – EARNED SICK TIME ACT* Poster
GENERAL REQUIREMENTS EARNED SICK TIME ACT_ Poster (Spanish)
Notice
- If the need for earned sick time is foreseeable, an employer may require advance notice, not to exceed seven days prior to the date the earned sick time is to begin, of the intention to use the earned sick time.
- If the need for earned sick time is not foreseeable, an employer may require the employee to give notice of the intention as soon as practicable. Deciding what is practicable is dependent on the unique facts and circumstances of each situation, and the parties should approach this requirement with reasonable minds. Notification as soon as practical for unforeseeable leave is also included in the Family Medical and Leave Act (FMLA). For consistency, the consideration under ESTA would be similar.
Documentation
- For earned sick leave of more than three consecutive days, an employer may require reasonable documentation that the earned sick leave has been used for a permissible purpose. Upon request, the employee must provide this documentation in a timely manner.
- Employer required documentation should not include a description of the illness or details of the violence.
- If an employer requires documentation, the employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation.
- An employer cannot delay commencement of the leave based on a failure to receive documentation.
Payout of Unused Sick Leave
- At Termination: Employees do not need to be paid for unused accrued earned sick time at separation under the ESTA. However, Public Act 390 of 1978, the Payment of Wages and Fringe Benefit Act, may require payment upon termination pursuant to the employer's written policy or contract.
- Unused Sick leave: The ESTA does not authorize an employer to pay out unused sick leave. Therefore, all accrued and unused sick leave would be carried over annually, and any balance upon separation would be reinstated if reemployment is within six months.
Additional Provisions
- Retaliation: Employers may not retaliate against an employee for engaging in activity protected by the act. Importantly, there is a rebuttable presumption that an employer violated the act if it takes any adverse personnel action against an employee within 90 days after the employee engages in protected activity.
- Record Keeping: Employers must retain records that document the hours worked and earned sick time taken by employees for not less than three years. These records shall be available to the Wage and Hour Division with appropriate notice and at a mutually agreeable time.
- Usage: The Act provides that earned sick time may be used in the smaller of (i) one-hour increments, or (ii) the smallest increment of time used by the employer’s payroll system for absences of use of other time.
- For example, if an employer uses 1/10th of an hour (six minutes) for tracking attendance/absences, then this would be the incremental use allowed for earned sick time. If an employer uses 1/2 (30 minutes) of an hour for tracking attendance/absences, then this would be the incremental use allowed for earned sick time. Leave can be used in the smaller of hourly increments or the smallest increment the employer's payroll system uses to account for other leave or uses of time.
- Penalties and Remedies: A claim may be filed with the Wage and Hour Division within 3 years of the alleged violation date. An investigation will be completed, and mediation attempted, if appropriate. If a violation is found, the Department may award all appropriate relief including but not limited to payment of all earned sick time improperly withheld, all damages incurred by the complainant as a result of violation of this act, back pay, and reinstatement in the case of job loss.
- In addition to the civil remedies afforded to affected employees, an employer who fails to provide earned sick time is subject to a $1,000 administrative fine. An employer who willingly violates the posting requirement is subject to a $100 administrative fine for each separate violation.
For more information on Michigan's ESTA updates, please contact Brian Kreucher of Howard & Howard Attorneys.