Sick leave laws in Michigan are set to undergo significant changes starting Feb. 21, 2025. The reinstatement of the Earned Sick Time Act (ESTA) by the Michigan Supreme Court will replace the current Michigan Paid Medical Leave Act (PMLA), which has been in effect since 2019.
Mosey is here to help Michigan employers understand the upcoming changes, their implications, and how you can manage state compliance with changing leave laws.
What Is the Existing PMLA Framework?
Under the PMLA, employers with 50 or more employees must provide eligible workers with up to 40 hours of paid sick leave annually.
Key features of the PMLA include:
- Eligibility: Only non-exempt employees working for employers with 50+ workers are covered.
- Accrual Rate: Employees earn one hour of sick leave for every 35 hours worked, with an annual cap of 40 hours.
- Carryover: A maximum of 40 hours of unused leave can be carried over to the next year (unless frontloading is used).
- Permitted Uses: Sick leave can be used for personal or family health needs, domestic violence recovery, or public health emergencies.
- Exclusions: Part-time, temporary, and exempt employees under the Fair Labor Standards Act (FLSA) are not covered.
These standards will change in February for virtually all employers in Michigan.
What Are the Major Changes With ESTA?
The reinstatement of ESTA broadens sick leave requirements, applying to all Michigan employers regardless of size.
Broader Employer Coverage
Under the ESTA, all employers with at least one worker must comply, including small businesses. The PMLA’s 50-employee threshold will no longer apply.
- Small Business Provisions: Employers with fewer than 10 employees are categorized as small businesses. They must provide up to 40 hours of paid leave and unlimited unpaid leave.
- Employee Count: The 10-employee threshold includes all individuals on your payroll, including part-time and temporary workers.
This threshold only applies to employers that have 10 employees simultaneously. If you have 10 employees and someone quits or your business downsizes, you don’t have to follow the rule again until you have 10 active employees.
Expanded Employee Eligibility
The ESTA covers all employees, excluding only federal government workers. Unlike the PMLA, part-time, temporary, and remote workers are eligible.
Additionally, domestic partners and extended family are covered under the new definition of “family member,” regardless of the sex or gender identity of an employee’s partner.
Increased Accrual and Usage Limits
Under the ESTA, employees accrue sick leave faster, with the rate increasing from one hour per 35 hours worked to one hour per 30 hours worked. Usage limits also increase.
- Small Businesses: Employees can use up to 40 hours of paid leave per year.
- Other Employers: Employees are entitled to 72 hours of paid leave annually.
There is no cap on unpaid leave.
Unlimited Carryover
While the PMLA allows a carryover cap of 40 hours, ESTA requires all accrued but unused leave to be carried over annually. This provision applies to all employees, including temporary and seasonal workers — as long as seasonal employment doesn’t lapse for more than six months.
No Accrual Caps
Under the PMLA, annual accrual caps are permitted. ESTA eliminates accrual caps, except for small businesses, which can limit paid leave accrual to 40 hours annually. However, unlimited unpaid leave must still be allowed.
Additional Permitted Uses
The ESTA expands the scope of permissible sick leave uses. For example, employees can now take leave to attend school meetings related to a child’s health or disability. The expansion also includes public health emergencies and addressing the effect of domestic violence or sexual assault on a child.
Prohibitions on Retaliation
The ESTA also strengthens protections against retaliation, introducing a rebuttable presumption of retaliation if adverse action is taken within 90 days of an employee exercising their rights under the Act.
New Enforcement Mechanisms
Finally, the ESTA expands enforcement provisions, allowing employees a private right of action and a three-year window for filing administrative complaints or lawsuits.
Employees may be entitled to broader remedies, including back pay, liquidated damages, and civil penalties of up to $1,000 per violation.
What Are All the Changes Made From PMLA to ESTA?
The changes mostly remove limits or expand eligibility. Small businesses now have more compliance requirements than they had under PMLA rules.
| PMLA | ESTA | |
|---|---|---|
| Employer Coverage | Employers with 50+ employees | All employers with 10 or more employees |
| Employee Eligibility | Non-exempt employees | All employees |
| Accrual Rate | One hour per 35 work hours | One hour per 30 work hours |
| Accrual Cap | 40 hours/year | Unlimited (except small businesses) |
| Carryover | 40-hour cap | Unlimited |
| Usage Limits | 40 hours/year | 72 hours/year (40 hours paid for small businesses) |
| Permitted Uses | Personal/family illness, domestic violence recovery | Expanded to include school meetings and public health emergencies |
What Should Employers Do To Prepare?
With the compliance deadline for ESTA on Feb. 21, it’s time for Michigan employers to prepare for these changes.
Here’s how:
Update Your Policies and Procedures
Review and revise leave policies to align with ESTA requirements. Address changing accrual rates and carryover provisions, include expanded definitions of eligible employees and family members, and update permissible uses of sick leave.
Refresh Your Handbook
Revise your handbook for Michigan employees to reflect the changes introduced by ESTA. Ensure your policies clearly outline the new accrual rates, usage limits, and expanded coverage requirements.
You’ll also need to implement:
- The updated sick leave accrual rate of one hour for every 30 hours worked
- Carryover of all unused sick time, regardless of employment type
- Expanded eligible uses of sick leave, such as school meetings and public health emergencies
- Definitions of “family member” under ESTA, including domestic partners and those with family-like relationships
If that sounds like a lot of work, don’t stress: Employee Handbooks by Mosey can help. With this tool, you can easily build and maintain a fully compliant handbook for your Michigan employees — not to mention employees in all 50 states.
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Provide Written Notice
Employers must distribute written notices to employees outlining their rights under ESTA.
The Michigan Department of Labor and Economic Opportunity (LEO) can provide a template notice that you can modify to suit your business.
Post Updated Notices
Display updated ESTA posters in prominent locations accessible to all employees. These posters must be provided in English, Spanish, and other languages spoken by at least 10% of your workforce.
Maintain Records
Retain records of hours worked, accrued sick leave, and used sick time. Provide quarterly notices to your employees regarding their ESTA status. If they notice discrepancies or have any questions, these notices will allow them to address the issue promptly.
Records must be kept for at least three years, so make sure your recordkeeping system is secure. Work with your IT team to establish long-term record storage — they may also be able to help you automatically eliminate records you no longer need when they expire.
Hold an HR Meeting
Train your HR management team on the ins and outs of ESTA to ensure they’re equipped to handle the transition.
Consider prioritizing the following topics:
- Recognizing valid requests for sick leave
- Communicating new rights and responsibilities to employees
- Adjusting payroll systems to account for ESTA’s accrual and carryover requirements
- Monitoring compliance with notice and recordkeeping requirements
HR teams must also be aware of ESTA’s anti-retaliation provisions and how to handle employee complaints or inquiries. Additionally, you may want to review your current disciplinary processes and termination policy.
Hold a Meeting With the Rest of Your Workforce
It’s also your responsibility to educate the rest of your employees about their rights under ESTA. To avoid minimizing the importance of ESTA, hold a meeting to discuss their rights under the new law.
Additionally, make sure you cover the following topics:
- How sick leave will accrue and carry over
- Expanded reasons for taking sick leave
- Procedures for requesting and documenting sick leave
- Assurance of protection against retaliation for exercising their rights
Encourage employees to ask questions and provide feedback during the meeting. Open communication can prevent misunderstandings and build goodwill during the transition.
This meeting may also be a good time to discuss additional resources, like wellness programs or domestic violence helplines. You want your workers to be safe and healthy, and this is a valuable opportunity to reiterate that you care.
Adjust Payroll Systems
Ensure your payroll systems are updated to track the accrual of earned sick time, usage in hourly increments (or the smallest increment recognized by the system), and carryover of unused leave.
Evaluate Collective Bargaining Agreements
Review collective bargaining agreements (CBAs) to ensure compliance. While ESTA won’t preempt existing CBAs, the new requirements will apply upon the agreement’s expiration and may be applicable if there are any gaps between an old and new CBA.
Monitor Guidance and Updates
Stay informed about additional guidance and resources provided by LEO. Regulations and clarifications may evolve as the deadline approaches.
If you have any questions, contact LEO, preferably before the full implementation of ESTA. It’s also good to know if they’ve made any public clarifications or adjustments, especially while the system is still new.
Maintain Compliance With Mosey
The Earned Sick Time Act (ESTA) introduces substantial changes for Michigan employers, expanding their obligations and employee rights. Compliance requires proactive measures, including policy updates, staff training, and system adjustments.
Mosey’s compliance management platform automatically tracks state and local business requirements that impact your organization. Our dashboard can walk you through ESTA requirements and help you work through each change step by step.
Compliance can be challenging, but it doesn’t have to be. Schedule a demo with Mosey to learn how we can help you automate the process and accomplish more.
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