Employment Law Focus: Michigan’s Earned Sick Time Act
Mark Vanneste
Howard & Howard Attorneys PLLC
You have probably heard about the recent changes to Michigan’s employment laws via the Earned Sick Time Act (“ESTA”) that was approved by Michigan lawmakers. Especially with significant changes like these, it is crucial for you to stay informed and compliant. So, let’s dive into the key changes and what they mean for your winery business.
What Employers are Covered by ESTA?
All Michigan employers that have at least one employee are covered by ESTA and it went into effect on February 21, 2025. If you’re a “new business,” you have a three-year grace period to get everything in order, meaning three years after the date you first employed an employee. A “new business” is one that did not employ an employee on or before February 21, 2022. For small businesses (those with 10 or fewer employees, including full-time, part-time, and temporary employees for 20 or more workweeks in the current or prior calendar year), you have until October 1, 2025, to comply.
Accrual and Usage Caps
Employees will now accrue one hour of paid earned sick time for every 30 hours worked. The usage cap is set at 72 hours annually. For small businesses, employees will accrue at the same rate, but the usage cap is 40 hours of paid leave annually. There is no cap on accrual, only usage. You are not required to provide accrued time to unpaid trainees or unpaid interns, but may do so if you prefer.
Carryover to Following Year
Sick time can be carried over, but it’s capped at 72 hours for regular businesses and 40 hours for small businesses. If you frontload the sick time, the use-it-or-lose-it policy applies. You are entitled to determine what constitutes a “year” (e. g, calendar year, fiscal year, April to March, etc.)
Frontloading
Instead of accruing sick time, you can provide employees with 72 hours (or 40 hours for small businesses) of paid earned sick time at the beginning of the year for immediate use. This means you won’t have to track accrual or carryover unused time. If you choose to use frontloading for part-time employees, they must receive a pro-rated amount, subject to notice and true-up requirements.
Waiting Period
New employees can be required to wait 120 calendar days before using their accrued earned sick time. Remember, however, that new employees began to accrue right away.
Current PTO Policies
If your current PTO policy provides employees with the same amount of time off as ESTA (72/40 hours), you’re already in compliance. However, it’s unclear how this will apply in practice given the notice requirements, etc.
Rate of Pay for Sick Time
The normal hourly rate excludes overtime, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, tips, or gratuities.
Advanced Notice
For foreseeable events, employees can give up to seven days’ advanced notice. For events that are not foreseeable, notice must be given as soon as practicable or in accordance with your policy, provided you give employees a written copy of the policy on the date of hire or the effective date of ESTA.
Documentation of Sick Time
You can require documentation after three consecutive days off, which is to be provided within 15 days of the request.
Increments
Sick time can be used in one-hour increments or the smallest increment used for absences.
Posters and Notification
Employers had until March 21, 2025 to post new posters and provide written notices to employees as required by ESTA.
I hope this helps you navigate the new changes to the ESTA. If you have any questions or need further assistance, feel free to reach out at [email protected]. Cheers to a compliant and a thriving wine industry in Michigan!
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