Significant changes are being implemented in Michigan's Earned Sick Time Act (ESTA) in 2025. Larger employers are already required to provide sick time to most employees, while small businesses with 10 or fewer employees will be impacted later this year. Accurate time tracking and benefits administration will be vital for HR departments to comply with the new guidelines. Here is some important information that all employers need to know about the Michigan sick leave law.
What is the Earned Sick Time Act?
The ESTA was amended in 2024 and the new changes go into effect in 2025. For larger employers, the changes went into effect on February 1, 2025. Small businesses with 10 or fewer employees will have to implement the changes on October 1, 2025.
All employers are now required to provide paid sick leave for employees. Workers now begin accruing paid sick leave on their first day on the job, although employers have the option to require up to 120 days of work before an employee can take a paid sick day.
Accrued sick time is to be paid at a worker's normal hourly wage or minimum wage (whichever is higher). Under employee rights in Michigan, workers can use paid sick days for their own illness or injury or to care for a family member during an illness or injury. Businesses are now allowed to cap the carryover of unused sick days at 72 hours (or 40 hours for small employers).
Who is Covered by the Act?
All employers and employees in Michigan are covered by the ESTA, with some limited exceptions. The following are the only employees who do not earn accrued sick time:
- Federal workers
- Independent contractors
- Unpaid interns or trainees
- Employees under age 18
Key Provisions of the Act
All employees in Michigan now accrue one hour of paid sick leave for every 30 hours worked. Small businesses (10 or fewer employees) are required to provide at least 40 hours of paid sick leave to employees annually. Large businesses (11 or more employees) must provide up to 72 hours of paid sick leave.
For employers using the accrual method, those hours are the amounts that employees can carry over into a new calendar year. When the accrual method is used, employers can require new hires to wait up to 120 days before using paid sick leave. Employees do begin acquiring paid sick leave on their first day on the job, however. Businesses are also required to provide their workers with written notice of their rights under the ESTA.
Penalties for Non-Compliance
The ESTA is enforced by the Michigan Department of Labor and Economic Opportunity (LEO). If an employer fails to provide earned sick time to a worker, the LEO can impose a civil fine of up to $1,000. Retaliatory actions against an employee over sick time can also warrant a fine of up to $1,000. Failing to post the required workplace notice can result in a $100 fine for each infraction.
Under the amended ESTA, there is no longer a private right of action, meaning employees cannot sue an employer for violating paid sick leave requirements. Workers can file a complaint with the Michigan LEO, which handles enforcement.
Preparing Your Business for Implementation
Time and attendance tracking should be a high priority for employer compliance with sick time laws in Michigan. Even salaried employees need to have their hours tracked in order to comply with ESTA. Employers should also ensure that they provide proper written notice to all employees of their rights under the ESTA.
In addition, proper benefits administration should be prioritized. Paid sick leave hours are entirely separate from paid time off that an employee accrues, and it's important to keep track of these benefits separately. Companies may want to consider outsourcing their HR functions to ensure proper compliance with the ESTA.
Ensuring Compliance
Don’t let the complexities of the new sick leave laws put your business at risk. Our experienced HR professionals at Workforce PayHub are ready to assist you in every step of compliance. From policy updates to full HR management, we ensure you meet all legal standards while maintaining a happy, healthy workforce. Contact us today to ensure your business is fully prepared and compliant.
