Michigan Makes Significant Revisions to Earned Sick Time Act

Late on Thursday, February 20, 2025, the Michigan legislature passed amendments to the Earned Sick Time Act (ESTA) that was otherwise set to take effect by court order the next day. The amendments were signed into law by Governor Gretchen Whitmer on Friday, February 21, 2025. Had the legislature and governor not acted, some very onerous provisions of the law would have gone into effect. The amendments which are effective immediately update the Michigan sick leave law as follows:

• Accrual basis. The accrual rate under the amended ESTA remains one (1) hour of sick leave for every 30 hours worked. There is no cap on accrual, but employers may cap usage at 72 hours per year. The amendments changed the law’s carryover provisions to allow employers to limit the amount of carryover to 72 hours for large employers (with over ten employees). For small employers, the accrual basis has also changed. Under the prior version of the law, small employers would have been required to provide up to 40 hours of paid leave and 32 hours of unpaid leave. The amendments no longer require 32 hours of unpaid leave. Small employers still must provide accrual of sick leave at the same rate (one (1) hour for every 30 hours worked) but may cap accrual of sick leave at 40 hours of paid leave.
• Front loading. Under the prior version of the law, frontloading was not contemplated, and the state’s guidance advised that, even if employer’s frontloaded paid sick leave, it must still reconcile with the amount the employee would have accrued and must carry over any unused sick leave year to year. Under the amended version now in effect, an employer may choose to frontload 72 hours of sick leave at the start of the benefit year. If frontloading, the employer is not required to carryover, track accrual, or pay out sick leave at the end of the year. Small businesses may front load 40 hours of sick leave.
  • For part-time employees, employers may frontload the amount of sick leave the employees would be expected to accrue under the one (1) hour of sick leave for every 30 hours worked method. In order to take advantage of this, the employer must provide notice to the employee of the expected number of hours, and the employer must provide extra time if the actual time worked is higher than predicted.
• Waiting period. Employers can who provide sick leave on an accrual basis may now require new employees to wait 120 days before they are permitted to use sick leave (rather than 90); regardless, employees must begin accruing sick leave on their first day of employment.
• Combining sick leave with a PTO policy. The amendments make clear that sick leave can be added to a PTO policy so long as the PTO policy provides at least the same amount of leave as the ESTA. The amendments clarify that PTO time can be used for sick leave purposes or any purpose and that employers are not required to provide additional sick leave if an employee uses PTO for another purpose.
• Rate of pay. The amended ESTA states that sick leave should be paid at the “normal hourly wage or base rate” but not less than minimum wage. Overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, tips, and gratuities do not need to be included in the normal hourly wage/base rate.
• Notice requirements. If the need to use sick leave is foreseeable, the employer may require seven days’ notice. If the need for leave is not foreseeable, the employer may require the employee to give notice in either of the following ways: (1) as soon as practicable; or (2) in accordance with the company’s policy regarding use of sick leave as long as (i) on the date of hire, or effective date of the law or when the policy takes effect, the employer provides the written policy to employees; and (ii) the notice requirement allows the employee to provide notice after the employee is aware of the need for use of sick time.
  • An employer cannot deny the use of leave for not following the notice policy if the employer (1) did not provide a written policy; or (2) the employer made changes to the policy and did not provide notice of the policy change within five days of the change.
• Discipline. Employers can discipline employees for abuse of the sick leave policy or failure to follow the notice provisions.
• There is no private right of action for employees. Like Michigan’s prior sick leave statute, in effect since 2018, all complaints must go through the Michigan Department of Labor and Economic Opportunity. In addition, the rebuttable presumption of violation of the law, which would have otherwise come into effect on February 21, 2025, was also removed by these amendments.
• Collective Bargaining Agreements. If a collective bargaining agreement is in effect and conflicts with the ESTA, the amended act applies beginning on the stated expiration date in the collective bargaining agreement (notwithstanding any statement in the agreement that it continues in force until a future date or event or the execution of a new collective bargaining agreement). In other words, in the event of a conflict, any collective bargaining agreement that is in effect controls — until the expiration of the contract, at which time the provisions of the amended sick leave law will take effect.
• Increments of usage. The amendments permit the employer to choose either (1) one-hour increments or (2) the smallest increment the employer uses to account for absences of uses of other time. The key difference here from the prior version of the ESTA is the employer choice for increment and that it is what the “employer” uses for absences, whereas the original ESTA mandated that the smaller of one hour or the smallest increment the employer’s payroll system should be used to account for absences.
• Doctor’s notes. Like the original ESTA, documentation may still only be requested of any employee after more than three consecutive sick days are used. However, the amendments added the requirement that requested documentation must be supplied by the employee within 15 days. The requirement to pay the out-of-pocket costs for obtaining a doctor’s note remains. 
• Notice to employees. Employers have 30 days to provide employees with written notice to each employee of the sick leave policy and this new law. Small employers have until October 1, 2025, to implement the changes.
• Exemptions.
  • The following types of employees are not entitled to sick leave: employees of the U.S. government; any employee who (1) sets his or her own schedule and (2) faces no punishment for not meeting a minimum amount of hours; unpaid trainees/interns; and minors.

The changes mark a significant departure from the Michigan sick leave requirements that have been in place since 2018 and the Earned Sick Time Act that would have otherwise taken effect on Friday, February 21, 2025. It is likely that employees are also tracking these changes and will ask questions regarding how policy change affect their ability to take sick leave and PTO generally. Employers should review their policies and ensure compliance with the provisions of the new law.

* A previous version of this article stated that nonprofit agencies are not subject to the sick leave law and that the 120 day waiting period may be used for both accrual basis and front loading policies. Since then, the state has clarified that it interprets the law to cover nonprofit organizations and that the 120 day waiting period is only permissible for accrual basis policies.