The Michigan Earned Sick Time Act (ESTA), scheduled to go into effect in February 2025, is causing lots of angst, for different people, for lots of different reasons. While there is still the possibility of changes to the legislation, likely in lame duck session, HR professionals across Michigan are investing significant time attending informational webinars from labor attorneys and the Michigan Department of Labor and Economic Opportunity.
Employers are trying to assess their current HR policies and practices in light of these potential changes.
However, with the possibility of legislative change looming, the commonsense approach for employers is to wait until January to finalize plans. With that said, January is a notably busy month on the HR side of things.
Getting a handle on the following areas now can be helpful, and hopefully will culminate in a less stressful January once the full picture comes into view.
Key Changes
- All employers(*) will need to provide earned sick leave for full-time, part-time, exempt, non-exempt and temporary employees (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 (though, most employers do not currently provide this), and put together a plan for how to handle this.
- 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 that provides more than 9 days, or provide unlimited sick leave, you should be fine.
More details to consider:
- ESTA puts limits on 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 the accrual and all sick time rolls over to the next year, although employees can only take up to 72 paid hours per year and 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 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.
For more information, or assistance with your plans for 2025, please connect with our HR consulting services team. We are happy to help.
