Michigan Earned Sick Time Act: What Is It and What Should Businesses Know?

The Michigan Legislature introduced and passed bills to make changes to the Earned Sick Time Act (ESTA) and minimum wage. The laws took immediate effect Feb. 21, 2025.

This legislation came in response to a state Supreme Court ruling that impacted the Paid Medical Leave Act (PMLA) and the Improved Workforce Opportunity Wage Act. The ESTA replaces the PMLA.

One of the changes impacts compliance deadlines. New businesses have either three years from the date they first employ an employee or until they have 11 or more employees to comply with the ESTA. Existing small businesses with 10 or fewer employees have until Oct. 1, 2025, to implement the requirements of the ESTA.

What Is the Michigan Earned Sick Time Act?

The Earned Sick Time Act in Michigan requires all employers to provide most employees with paid sick time whether that time is accrued as the employees work or frontloaded. There are exceptions to employee eligibility, with an exemption for those who can set their own working hours for an employer with a policy that prohibits adverse action against the employee if a minimum number of hours are not scheduled. Additionally, unpaid interns or those in unpaid training and youth employees as defined under the Youth Employment Standards Act are also not entitled to sick leave under the ESTA.

How Is Time Accrued Under Earned Sick Time Act?

Employees accrue sick leave time at a rate of one (1) hour for every 30 hours worked, which begins on Feb. 21 or upon hire. Employers can also frontload the hours at the start of the benefit year. There is no limit on the number of hours an employee can accrue annually, but the hours they may take can be capped by their employer. Also, new employees may be required to wait until the 120^th calendar day after starting employment before being permitted to use accrued hours. Employees re-employed within a two-month period are considered to have continuous employment for the purposes of ETSA and might not be subject to the 120-day waiting period.

Is Leave Time Capped Under ESTA?

The amount of leave time an employee may take per year can be capped by the employer. Whether a business is determined to be a small business also impacts how much leave time they must provide under Michigan’s Earned Sick Time Act. A small business is an entity that employs 10 or fewer employees in any given week during any 20 or more workweeks of the current or prior calendar year.

• 1-10 employees: Employers are allowed to cap the number of hours of paid leave per year that employees can take at 40, but employees can use more if the employer allows.
• 11 or more employees: Employers can cap the number of hours of paid leave per year that employees can take at 72, but employees can use more if the employer allows.

Employers can frontload hours at the beginning of the benefit year (either 72 or 40 based on size of business), which eliminates the carry over requirement for unused hours.

Is Carryover Allowed?

An employee can carry over up to 72 earned but unused sick time hours (40 hours if employee of a small business), unless hours are frontloaded, in which case carry over is not allowed. Employees may use earned sick time incrementally in the smaller of one hour or the smallest increment of time a business’ payroll system uses to account for absences or use of other time.

Does the ESTA Require Payout of Earned but Unused Sick Time?

The Michigan ESTA does not require employers to pay out earned but unused sick time at the end of the year nor at termination or separation from the business, except where company policy dictates otherwise. However, if there is separation, whether voluntary or involuntary, an individual will have any balance restored if re-employment occurs within two months.

Employers should review their own written policies related to time-off payments upon termination to determine if they do have obligations.

What Are Qualified Reasons for Using Earned Sick Time?

Eligible employees in Michigan will be able to use earned sick time under the Earned Sick Time Act for the following reasons:

Eligible employees in Michigan will be able to use earned sick time under the Earned Sick Time Act for the following reasons:

• To care for or seek treatment for one’s own physical or mental illness, health condition, or injury
• To provide care or seek treatment for a family member’s physical and mental illness, injury, or health condition
• To attend meetings at a child’s school to address a child’s health, disability, or effects of domestic violence or sexual assault on the child
• To address the closure of your workplace due to a public health emergency or to care for a child whose school is closed because of a public health emergency
• To address issues arising from acts of violence, assault, or sexual assault for yourself or a family member, which includes seeking counseling, legal services, medical or psychological care, attending court, or relocating

Michigan’s Earned Sick Leave Act defines “family member” as follows, but the list is not exhaustive and is subject to change:

• A biological, adopted, or foster child
• A stepchild
• A grandparent or grandchild
• A spouse
• A biological, foster, or adopted sibling
• An individual who stood in place for a parent when the eligible employee was a minor
• Domestic partner
• Committed relationship
• Individuals related by blood or whose close relationship with the employee is equivalent of a family one

What Are Posting and Recordkeeping Requirements Under ESTA?

Employers must place the required poster available from the state in a conspicuous place at work. The poster is available in English with a Spanish version coming soon. Employers also are required to provide each employee a written notice of their rights under the law, which include but are not limited to:

• The amount of earned sick time employers are required to provide under the law
• The employer’s choice of how to calculate a year
• Terms of how earned sick time can be used
• Prohibition of retaliatory personnel action by the employer against an employee for requesting or using earned sick time
• The employee’s right to file a complaint for any violation of this law

This notice must be provided in English, Spanish, and any other language that is as the primary language of at least 10 percent of the workforce if the department has translated the notice into such language.

Employers also are required to keep records for at least three years of hours worked and earned sick time taken by employees.

What Are the Notification Requirements Under ESTA?

Employees might be required to provide advance notice not to exceed seven days prior to using earned sick time for foreseeable events. If not foreseeable, an employee has to give notice as soon as practicable. Employees using more than three consecutive days of accrued earned sick time might be required to provide reasonable documentation for the purpose of use within 15 days of their employer’s request, but the employer who requires it is responsible for paying any out-of-pocket expenses the employee incurs getting the documentation.

There are penalties for noncompliance, including a civil penalty equal to eight (8) times an employee’s normal hourly wage for employers who fail to provide earned sick time and a $1,000 administrative fine for employers who take retaliatory action against current or former employees. An employer who willingly violates the notice or posting requirements is subject to a. administrative fine of not more than $100 for each separate violation.

Looking Forward

Keeping up with everything that impacts your business can be challenging for employers of any size. Paychex provides HR Services, time and attendance solutions, and more – supported by a team of analysts that monitor federal and state legislation and regulatory action that affects your business’s compliance requirements.