Changes to Earned Sick Time Act Impact Michigan Workers

Michigan has been at the heart of the American labor movement for nearly a century, protecting the rights of its hard-working residents and setting an example for other states. In 2018, Michigan workers’ rights organizations drafted a citizen-proposed initiative to provide a minimal amount of paid sick time to all workers and obtained hundreds of thousands of voter signatures.

The Michigan legislature approved the initiative into law in September 2018 but made significant changes to scale back the scope of its protection. Following an appeal, a ruling from the Michigan Supreme Court, and the passage of House Bill 4002, the revised Michigan Earned Sick Time Act (ESTA) became effective on February 21, 2025.

The Wage and Hour Division of the Michigan Department of Labor and Economic Opportunity offers resources for employers and employees to learn more about their rights and responsibilities under the ESTA. If you have specific questions, consult with Sommers Schwartz’s experienced wage and hour attorneys.

What Is the Michigan Earned Sick Time Act?

The Michigan Earned Sick Time Act establishes the minimum amount of paid sick time employers must provide for their Michigan employees. Employees accrue sick time proportional to their hours worked.

Paid sick time must be compensated at 1) an employee’s normal hourly or base wage or 2) the applicable state minimum wage, whichever is greater. An employee who is usually subject to the tip credit, for example, would receive the standard non-credited base hourly rate.

Non-standard types of pay, including overtime and holiday pay, bonuses, commissions, supplemental pay, piece rate pay, tips, or gratuities, are not included when calculating an employee’s hourly earned sick time compensation.

Who Is Affected by the Changes in the Rules?

Michigan’s ESTA applies to most individuals and business entities with at least one employee physically located in Michigan. However, the most recent amendments specified many exceptions. These include:

• Federal employees.
• Employees of nonprofit organizations.
• Unpaid trainees and interns.
• Minors (under 18).
• Railway workers.
• Public officials.

Other employees may also be excluded from ESTA protections, including those covered by a current Collective Bargaining Agreement (CBA)—union workers— and those entitled to set their own schedule without minimum requirements. An experienced Michigan employment attorney can help you understand whether you are entitled to benefits under the ESTA. 

Additionally, like other Michigan employment protections, the ESTA does not apply to independent contractors.

Grace Period for Small Businesses

Michigan’s legislature recognized that small businesses may not already have the HR, payroll, and accounting resources necessary to track, accrue, and allow earned sick time for their employees. Therefore, the ESTA includes a “grace period” for businesses with 10 or fewer employees. These small businesses do not need to offer leave to their employees or take any other action to comply with the ESTA until October 1, 2025.

Small businesses with no employees on February 21, 2025, do not need to comply with the ESTA until three years after they hire an employee.

Effective Date for Other Businesses

Eligible employees began accruing earned sick time immediately on February 21, 2025, and can use it as it accrues. Employees will accrue one hour of earned sick time for every 30 hours they work.

Employees hired after February 21, 2025, will begin to accrue earned sick time immediately. However, their employer may require them to wait 120 calendar days before using their accrued hours.

Existing PTO and Paid Leave Plans

Employers who already provide paid leave, such as vacation time, personal days, and other types of PTO, may already meet or exceed ESTA requirements if their policy complies with the amount, accrual rate, and usage requirements under the law. However, employers should review the law carefully to ensure they comply with its accounting, notice, and posting requirements.

Notification Requirements

Employers must notify eligible employees of their ESTA rights by March 23, 2025, or on their hire date. They must also post a notice in a conspicuous place accessible to eligible employees in English, Spanish, and any language that is the first language spoken by at least 10% of the employer’s workforce (if the department has translated the notice into such language).

The required notices must inform employees of the amount of leave they are entitled to, how their employer calculates a year for purposes of the ESTA, and how they can use their sick leave. It must also notify them of their right against retaliation and how to pursue claims for violations.

How Can Earned Sick Time Be Used?

Earned sick time can be used for many purposes relating to the employee or their covered family member, including:

• Medical diagnosis, care, and treatment for mental or physical illness, injury, or health condition, including preventive care.
• Absence due to domestic violence or sexual assault.
• 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.
• Closure of their place of business by order of a public official due to a public health emergency.
• The 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.
• A determination by the relevant health authorities or a health care provider that their presence in the community would jeopardize the health of others because of their exposure to a communicable disease.

Under the ESTA, the definition of covered family member includes an employee’s spouse, children, grandchildren, parents, grandparents, siblings, children for whom the employee stands in loco parentis, domestic partner, and any individual related by blood or whose close association is the equivalent of a family relationship.

Using Earned Sick Time Hours

The ESTA also guides employees and employers on how to use earned sick time.

• Foreseeable use. If the employee’s need to use earned sick time is foreseeable, such as for a planned medical procedure, an employer may require notice of up to seven days prior to the absence.
• Unforeseeable need. An employer may require the employee to provide notification of their intention to use paid sick time “as soon as practicable” for unforeseeable covered events. Alternatively, an employer may implement different notice requirements as long as it gives employees written notice within five days after the policy takes effect.  
• Replacement coverage. An employer may not require an employee to search for or secure a replacement worker to “cover their shift” or handle their job duties as a condition for using earned sick time.

Employers may choose whether to allow employees to take earned sick time in hourly increments or “the smallest increment that the employer’s payroll system uses to account for absences [or] use of other time.” This means an employer that requires employees to take full days off for vacation or unpaid leave may require an employee to accrue a full day of earned sick time before they can use it. However, employers subject to the Family and Medical Leave Act (FMLA) must still allow employees to use ESTA leave in hourly increments.

Questions about allowable use and the sufficiency of an employee’s notice will likely be at the heart of many ESTA complaints. Sommers Schwartz’s skilled employment law team can help you navigate your rights under the ESTA and ensure you have the best representation available if your employer challenges your paid sick time use.

Maximum Yearly Use

Although there is no legal limit to the amount of time an employee can accrue, employers can limit the amount they can take per year and how much they can carry over to the next year.

	Small Businesses (10 or fewer employees)	Other Businesses
Cap on Yearly Use	40 hours per year	72 hours per year
Cap on Carryover	40 hours per year	72 hours per year

It’s important to note that employers may select higher allowable yearly use and carryover limits – the ESTA only establishes the minimums required. Employers must notify employees of the yearly use and carryover limits along with the dates their year starts and ends.

• Cashout option: Employers may compensate employees the value of their unused earned sick time hours at the end of their year rather than allowing them to carry over into the next year.

Frontloading Leave

Instead of calculating earned sick leave as it accrues, employers may “frontload” 40 hours of leave to each full-time employee at the beginning of each year (or a proportional amount of time to part-time employees based on their expected workload). Employers can’t implement a waiting period to use frontloaded leave time, but they do not have to allow employees to carry any unused time over into the next year.

Employees who work more than the expected amount may be entitled to additional earned sick time beyond their allotment, while employers may be able to “claw back” frontloaded time from employees who fail to meet their obligations. The Michigan LEO will likely provide additional clarification about handling frontloaded leave as it addresses individual complaints.

Documentation

If an employee uses earned sick time for three or more consecutive days, their employer may require reasonable documentation that the absence was for a purpose covered by the ESTA.

• Type of documentation. A document signed by a health care professional indicating that earned sick time is necessary or a copy of a domestic violence police report are examples of sufficient documentation.
• Time limits. An employer may require the employee to provide documentation within 15 days, but it cannot delay the employee’s use of sick time until it receives that documentation.
• Confidential information. The employer cannot require that the documentation explain the nature of an employee’s illness or medical condition or the details of domestic violence or sexual assault. If an employer learns such information, it must treat it as confidential.

An employer is responsible for paying all out-of-pocket expenses, charges, and costs the employee incurs in obtaining any required documentation.

Termination, Transfer, and Rehire of Employees

The ESTA also provides guidance for managing unused accrued sick hours when the relationship between an employer and employee changes. 

• Termination of employment. The ESTA doesn’t require employers to compensate an employee for any unused accrued sick time when their employment ends. However, an employer may have its own policies regarding the payout of leave and other benefits that obligate it to do so.
• Employee transfer. If a worker is transferred to a separate division, entity, or location of the same employer, they retain all their previously accrued sick time.
• Separation and rehire. If an employer rehires an employee within six months of their separation, it shall reinstate their previously accrued, unused earned sick time.
• Successor employers. If a different entity succeeds or replaces an existing employer, the successor employer assumes the responsibility for the earned sick time rights for all continuing employees (that is, the workers maintain their accrued time and can continue to use it without change).

Non-Discrimination or Retaliation

The ESTA prohibits discrimination or retaliation against workers for exercising their legal rights under the ESTA or participating in an investigation, proceeding, or hearing related to the ESTA. It prohibits employers from taking or threatening any adverse action, including demotion, termination, re-assignment, or reduction in hours.

One essential protection provides that “an employer’s absence control policy shall not treat earned sick time taken under this act as an absence that may lead to or result in retaliatory personnel action.”

Employees who believe their rights under the ESTA have been violated, including wage and hour, retaliation, and discrimination claims, may file a claim with the Michigan Wage and Hour Division of the LEO. The department is authorized to levy civil penalties and fines against employers and to award compensation to aggrieved employees.

Contact Sommers Schwartz, P.C., for Wage and Hour Claims

Changes to wage and hour laws and employee rights protections can be confusing. The experienced employment law team at Sommers Schwartz understands how these changes can impact Michigan workers. We honor the spirit of Michigan’s rich history by defending and promoting workers’ rights and standing with employees to ensure they are paid and treated fairly under the law.

Our attorneys handle many types of wage-and-hour and employment claims, including discrimination, retaliation, wage theft, wrongful termination, and other workplace issues. We will fight to help you pursue justice and recover the compensation you deserve. Contact us today to schedule a free, no-obligation consultation.