The Michigan Supreme Court has reinstated the Earned Sick Time Act (ESTA) changing the previously adopted Michigan Paid Medical Leave Act (PMLA) to provide more sick time to employees. For the past five years employers have been following a more limited sick leave program, but starting on February 21, 2025, Michigan employers will have to adjust to a new paid leave law.
The biggest differences between the two is ESTA's broader application. ESTA will apply to all employers with at least one employee (excluding the US government) instead of the previous 50 person threshold.
It is worth noting, employer obligations vary based on whether or not they're considered a "small business." According to the Act, a small business is defined as having fewer than 10 employees. This count includes all individuals on the payroll, whether they are full-time, part-time, or temporary workers. If an employer has 10 or more employees on its payroll for any 20 weeks or more during the current or previous calendar year, it does not qualify as a small business under ESTA, even if the number of employees decreases during that period.
Beginning February 21, 2025, Michigan employees will accrue earned sick time at a rate of one hour for every 30 hours worked, which includes overtime. The ESTA does not cap sick leave accrual, but does cap usage. The only except is for small businesses who can cap paid leave at 40 hours. Employees will also be able to carry over all accrued, unused sick time from year to year, but will not be paid out for any remaining time earned upon termination.
