Wisconsin businesses –
You can take comfort knowing this change is for Michigan businesses only.
Starting on February 21, 2025, every Michigan employer, regardless of size, must provide their employees with up to 72 hours of sick leave annually under Michigan’s new Earned Sick Time Act (ESTA) – this includes agriculture employers and employees! On November 12, 2024, several agricultural organizations, including GreenStone Farm Credit Services, wrote to the Michigan legislature with their concerns related to the ESTA’s impact to the state’s agriculture industry. The letter can be found here. Michigan employers have been administering a paid leave law for the last five years under the Michigan Paid Medical Leave Act (PMLA) – many were not impacted by this law because it only applied to employers with 50+ employees. However, on July 31, 2024 the Michigan Supreme Court reinstated a voter initiative known as the ESTA which drastically changes the landscape for Michigan employers to provide sick time to employees. The ESTA is the original version of a law adopted by the Michigan legislature that was immediately amended to create the PMLA, a more limited sick leave program applicable to many Michigan employers since 2019. By court order, the ESTA will take effect on February 21, 2025, replacing the PMLA and covering all Michigan employers.
This article provides a summary of the changes under ESTA, highlights answers to some frequently asked questions (FAQs) and outlines some items you should do now to ensure compliance when ESTA takes effect on February 21, 2025. Most of this information presented is taken from the State of Michigan’s Labor and Economic Opportunity (LEO) website on the ESTA. The website has many resources you should familiarize yourself with – including a link to the act, FAQs, posting requirements, brochures, etc. The website can be found here.
Who Is Covered Under the ESTA?
All Michigan employers, except the U.S. government, must adjust or implement policies to comply with ESTA requirements. ESTA applies, regardless of industry, to employers that employ one or more employees in Michigan – employers are split into “Small Business” and “All Other Employers” as defined by the LEO.
All employees are eligible, regardless of classification to receive earned sick time.
What is the accrual rate for earned sick time?
Beginning February 21, 2025, or upon the employee’s start date, whichever is later, employees will accrue 1 hour of sick time for every 30 hours worked. Employers may require new employees to wait 90 days after hire to use accrued sick time, but the accrual begins immediately upon hire.
How much earned sick time are employees entitled to?
Small businesses must provide up to 40 hours of paid earned sick time, with an additional 32 hours unpaid. All other employees must provide up to 72 hours of paid earned sick time per year. You should review the LEO website to determine if you are a small business or not.
Does earned sick time carry over?
Yes. All accrued and unused sick time must carry over to the following year. ESTA does not impose a cap on accrual or carryover.
Can employers frontload the earned sick time?
Yes. Employers may frontload the full year’s worth of sick time at the beginning of the benefit year. However, the frontloading method implemented must comply with the ESTA’s accrual, usage, carryover, and other provisions.
Does unused earned sick time have to be paid out at the end of a calendar year or employee termination?
No. ESTA does not require employers to payout unused time. Employers should check and confirm their written policies align with their desired practices concerning payout, as separate written agreements or policies may require employers to pay these amounts out.
As Agricultural Employers – What Should We Do Now?
Although the ESTA is not scheduled to go into effect until February 21, 2025, Michigan agriculture employers can mitigate their risk by taking steps now to make sure they are in compliance with the ESTA come the effective date. At a minimum, the following actions are recommended:
- Become familiar with the ESTA information on Michigan’s LEO website. Additionally, watch for new ESTA guidance and regulations on Michigan’s LEO website.
- Review and revise vacation, sick and other leave-related policies, including onboarding notices, timekeeping, and payroll mechanisms, to comply with the ESTA’s requirements.
- Ensure human resources personnel understand the rights and protections afforded to employees under the ESTA, including administration of all vacation, sick and other leave-related policies, notice and posting requirements, and recordkeeping obligations.
- Train all supervisor employees to avoid retaliating against an employee because the employee has exercised a right protected under the ESTA.
- Obtain and timely display copies of the required ESTA posters.
To view the winter 2025 issue of Partners magazine in its entirety, click here.
