Michigan’s Earned Sick Time Act: Legislative Updates to Address Concerns

As many of you know, Michigan’s Earned Sick Time Act (ESTA) is set to take effect on February 21, 2025. This law mandates sick leave benefits for employees, creating new obligations for businesses across the state. However, growing concerns about the impact of ESTA have prompted the Michigan House and Senate to introduce bills aimed at addressing ambiguities and easing the burden on employers.

Proposed Changes: House Version

Key modifications under the House version include:

• Employee Exemptions: Exempts independent contractors, remote workers, seasonal workers (employed for 25 weeks or less), part-time workers (working 25 hours or less per week), and variable hour workers from ESTA coverage.
• Small Business Exemption: Excludes businesses with fewer than 50 employees from certain provisions.
• Accrual Options:
  • Accrual Method: Employees earn one hour of sick time for every 30 hours worked, capped at 72 hours annually, with a carryover limit of 72 hours.
  • Frontloading Method: Employers may frontload 72 hours of sick time at the beginning of the year, with proration for mid-year adjustments.
• Usage and Documentation: Sick time may be used as accrued and tracked through payroll systems. Employers can require reasonable notice, procedures, and documentation.

Proposed Changes: Senate Version (SB 15)

The Senate’s version offers alternative adjustments:

• Accrual Method: Retains the one-hour-per-30-hours-worked model, capped at 72 hours annually, with carryover limited to 72 hours. Also permits frontloading 72 hours as an alternative.
• Employee Exemptions: Does not exempt independent contractors, remote workers, seasonal workers, or part-time workers.
• Carryover and Payout: Requires carryover of up to 288 hours, with an optional payout for unused time (up to 144 hours) before year-end.
• Private Right of Action: Removes the private right of action, preventing employees from directly suing employers for violations.

What This Means for Employers

These legislative proposals could significantly impact your compliance obligations under ESTA. The House version offers more flexibility and exemptions, particularly for small businesses, while the Senate version retains broader coverage and stricter carryover rules.

We are closely monitoring these developments and will provide updates as the legislative process unfolds. If you have questions or need assistance navigating these changes, please don’t hesitate to contact us at [email protected].