The Michigan Earned Sick Time Act (ESTA), scheduled to go into effect on February 21, 2025, is causing lots of angst for different people. So far, every handbook that I have reviewed has required significant changes to be compliant. To get a sense of the scope of changes you will need to make, feel free to take the following quiz. Take our quiz here.
Key Changes
- All employers(*) will need to provide earned sick leave for full-time, part-time, exempt, non-exempt and temporary employees at the rate of one hour accrued for every 30 hours worked. For a full-time employee, it would be 8-9 days per year. By contrast, current legislation applies only to full-time employees and is 5 days per year. *Note: The federal government doesn’t need to do this.
- Documentation around absences due to illness is also changing, and employers may no longer request documentation for less than 3 days of absence. If the employee does provide documentation, they only have to offer a generic statement by a healthcare professional and nothing more.
- If documentation is required, employers will need to pay for the cost to acquire it, such as covering a co-pay for a doctor’s visit.
- Employees can submit leave time notifications that they are using time under ESTA “as soon as practicable.”
As they say, “Hope shouldn’t be your strategy."
Thus, I wanted to share a few thoughts on this potentially transformative issue.
Be ready for the change.
Things to consider as a Michigan employer:
Do you have part-time workers?
- If yes, you should review your current sick leave plan for part-time workers (if you have one) and create a revised plan that complies with the new rules.
Do you currently provide 5 days of sick leave? *This was the guidance from the previous law.
- If yes, you will need to be ready to change. If you have a combined PTO bank that includes sick time and vacation time totaling more than 9 days, or you provide unlimited sick leave, you should be fine.
More details to consider:
- ESTA limits the types of restrictions employers can put on leave time, such as “advanced notice” or “supervisor approval,” as is typical with most PTO plans.
- Employees may use ESTA time in the smallest increment allowed by the employer’s timekeeping system, whereas PTO usage may have different requirements.
- There is currently no cap for accrual, and all sick time rolls over to the following year, although employees can only take up to 72 paid hours per year. Employers with fewer than 10 employees may take up to 40 paid hours per year. This may require employers to change how they record/account for this liability.
- Sick pay is not paid out upon departure, whereas vacation is. If you stick with one bank, or increase a PTO bank, you are potentially increasing your liability.
What are your documentation requirements for sickness, and what is your disciplinary process for absences?
- You will want to review your processes and language after the law and administrative guidelines are finalized.
- If you are an employer, make sure that your HR team is following this issue, and/or have an employment attorney provide you with guidance about handbook policy updates.
Help is here.
We are offering 30-minute ESTA consultations in 2025.
To help you customize a policy that matches your benefits philosophy and cost considerations and minimizes change, sign up for a 30-minute ESTA Consultation for $125.
