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Understanding the Michigan Earned Sick Time Act 

The Michigan Earned Sick Time Act (ESTA) expands employee sick leave rights, replacing the Paid Medical Leave Act. Under ESTA, nearly all Michigan workers accrue one hour of sick time for every 30 hours worked, with up to 72 hours available annually. Learn how ESTA impacts employers, compliance requirements, and best practices for managing sick leave policies.

Michigan’s Earned Sick Time Act (ESTA) is now fully in effect, replacing the former Paid Medical Leave Act and expanding sick leave rights for nearly all Michigan employees. Under ESTA, workers accrue one hour of sick time for every 30 hours worked. Employees may use up to 72 hours per year, with larger employers providing all 72 hours as paid leave. Small employers with nine or fewer employees must offer 40 paid hours and may designate the remaining 32 hours as unpaid. 

Sick time may be used for an employee’s personal medical needs or those of a family member, for preventive care and routine appointments, for school or workplace closures related to public health emergencies, for issues related to domestic violence or sexual assault, and for school meetings concerning a child’s health or disability. Employees must provide notice as soon as possible for unplanned absences or up to seven days in advance for foreseeable ones.

Employers may request reasonable documentation for absences lasting three or more consecutive days and are responsible for any associated costs. ESTA also prohibits retaliation, and any adverse action taken within ninety days of an employee using or requesting leave may be presumed retaliatory. While unused hours can carry over without limit, employees are still limited to using no more than 72 hours per year. 

Implications for Employers 

The enactment of ESTA has brought operational changes for Michigan businesses. Most notably, coverage now extends to almost every employer with at least one employee. This requires companies to re-evaluate whether their current paid time off (PTO) or sick leave policies meet ESTA standards, especially regarding accrual, eligibility, and permitted uses. 

Employers must ensure their payroll and human resources (HR) systems can track accruals at a 1-to-30 ratio, manage unlimited rollover, and correctly distinguish between paid and unpaid sick time depending on employer size. Policies and handbooks may require updates, and managers must be trained to apply the new rules consistently to avoid compliance issues and potential retaliation claims. 

Businesses also face greater administrative responsibility. They must maintain accurate records of hours worked, leave earned, and leave used for at least three years, and ensure managers understand how to respond to leave requests, documentation needs, and notice requirements. 

Reporting Requirements 

While ESTA does not require businesses to file routine usage reports with the state, it does establish several important administrative obligations. Employers must: 

  1. Display the official ESTA employee rights poster in a visible location. 
  1. Provide written notice to employees about their sick leave rights and how leave is accrued and used. 
  1. Maintain three years of records documenting hours worked, sick time earned, and sick time used. 
  1. Ensure records are accessible for inspection by the Michigan Department of Labor and Economic Opportunity. 

Employers with pre-existing contracts signed before December 31, 2024, that provide less leave than ESTA requires must notify the department, provided the contract falls within the law’s criteria. 

Advice for Employers 

Now that ESTA is fully in effect, the best step employers can take is to review their leave policies, assess their payroll and HR systems, and ensure processes align with the law’s requirements. Consistency is crucial; businesses should train staff on how to handle leave requests, employee communication, documentation, and potential retaliation risks. Employers should also confirm that their existing PTO bank, if they use a combined system, meets or exceeds ESTA’s minimum requirements. 

Many Michigan businesses are finding that partnering with a professional employer organization (PEO) like Group Management Services (GMS) offers significant value in navigating these changes. Our experts stay on top of Michigan labor regulations, manage the complexity of accrual tracking and recordkeeping, and support employers through employee-related issues. This allows small and midsize business owners to focus on running their companies while entrusting critical HR responsibilities to a reliable partner. 

If you need support reviewing your policies or ensuring full compliance with ESTA, contact GMS today!