As Michigan puts the Earned Sick Time Act (ESTA) into effect, businesses across the state must learn how to successfully prepare for the changes it will bring. This law will shape the way sick leave is handled, impacting both employers and employees. So what exactly does the law entail and in what ways will it impact your business?
What is the Michigan Earned Sick Time Act (ESTA)?
Originally enacted in 2018, the Michigan ESTA is a law that governs the provision of sick leave to employees. The ESTA was reinstated by the Michigan Supreme Court in July 2024 and will take effect on February 21, 2025. The ESTA covers more employers and provides more sick days than the previously held Paid Medical Leave Act (PMLA). Under this law, every employee accrues one hour of paid sick time for every 30 hours worked, with a maximum of 72 hours usable per leave year. For small businesses (10 or fewer employees), employees earn one hour of paid sick leave for every 30 hours worked, up to 40 hours per year. If an employee works more than 40 hours, they can use up to 32 more hours of unpaid sick leave. All accrued and unused paid sick time must be carried over from year to year.
Who Does the ESTA Apply To?
All businesses in Michigan that employ one or more individuals must comply, with the exception of those who work for the U.S. government. The law includes full-time, part-time, and temporary employees. It covers an employee’s own physical or mental illness and those of family members, domestic partners, and individuals with a family-like relationship to the employee.
How Will the ESTA Impact Your Business?
- Policy Updates: Employers will need to revise their sick leave policies to comply with the new requirements. Organizations must do research on how sick time is accrued, utilized, and tracked.
- Record Keeping: Employers will need to maintain detailed records of sick leave accrual and usage. This may require updates to payroll and HR systems.
- Penalties for Non-Compliance: ESTA includes anti-retaliation provisions and allows employees to bring civil actions against employers for violations. They may file it within three years after the stated violation date.
- Training and Communication: HR staff and leaders will need training in the new regulations. All employees will need clear communication for effective implementation and employee understanding.
Conclusion
Effective on February 21, 2025, the Michigan ESTA will bring significant changes to sick-leave policies. Start preparing now by researching the new requirements, updating your policies, and ensuring clear communication and compliance. A proactive plan will ensure a smooth transition and help nurture a positive, trusting culture for your business.
If you or your HR team needs any support with talent recruitment, training, or consulting—reach out to DISHER Talent Solutions. We care about your unique business needs, culture, and long-term success.
