By Robert G. Brody and Fintan S. Lalor
At the eleventh hour, the Michigan state legislature passed significant amendments to the state’s paid Earned Sick Time Act (ESTA) which was scheduled to take effect on February 21, 2025. The bill was passed late on February 20th and was signed into law by Governor Gretchen Whitmer on the 21st. Many aspects of the original ESTA, discussed in more detail here, still took effect, however, the last minute changes to the law significantly lessened the burdens on employers.
The Changes to the Act
Some key amendments to ESTA include:
- Employers may now cap the carryover of accrued paid sick leave at 72 hours from year to year (40 hours for small businesses);
- As an alternative to the accrual method, employers may elect to frontload at least 72 hours of paid sick leave at the start of the benefit year (at least 40 hours for small businesses);
- A delay in the notice/poster requirement for employers until March 23, 2025;
- A delay in the effective date of the paid sick leave law for small businesses until October 1, 2025;
- A change in definition of “small business” from less than 10 employees, to 10 or less employees;
- Small businesses no longer have to give their employees 32 hours of unpaid sick leave;
- If the need for sick leave is unforeseeable, employers may require employees to give them notice as soon as possible, or in accordance with the employer’s policy on using sick time if (1) the employer notifies the employee of their policy (containing the procedures for how the employee must provide notice) in writing; and (2) the policy allows the employee to provide notice after they become aware of the need to use sick leave;
- If the employee uses paid sick leave on 4 or more consecutive days, the employer may demand reasonable documentation within 15 days of the employer’s request;
- Employers may take disciplinary action against employees for using paid sick leave for a purpose not allowed under the Act, or for violating notice requirements under the Act;
- Employers can choose to either allow employees to use paid sick leave in one-hour increments or the smallest increment the employer uses for absences; and
- Employers may require employees hired on or after February 21, 2025, to wait 120 days after starting employment before using paid sick leave.
What now?
Even with the last-minute employer-friendly amendments, Michigan’s ESTA is still one of the most progressive paid sick leave laws nationwide. Significantly, employers now have until March 23, 2025, to provide written notice to their employees of their rights under the amended ESTA, and to post notices consistent with the amended ESTA. A sample notice can be found here. Also, small businesses can now wait until October to begin providing benefits under the amended ESTA. However, small businesses should ensure their sick leave policies are updated well before October to maintain compliance.
While this article discusses the primary changes to ESTA pursuant to the last-minute amendments, the bill imposes multitudes of other changes. Businesses should work with competent counsel to develop a plan that satisfies all the new requirements of the law while aligning with your company’s operational needs and goals.
Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.