Michigan's Earned Sick Time Act: What Every Employer Needs to Know
Basil A
Published on 3 September 2025
A Seismic Shift: Understanding the History of Michigan's Paid Leave Laws
Navigating the landscape of employee leave in Michigan requires more than a simple understanding of current statutes. It necessitates a deep appreciation for the complex legal journey that has dramatically reshaped the state's paid leave requirements. For years, employers operated under a framework that was, unbeknownst to many, legally vulnerable. A recent Michigan Supreme Court ruling has now brought a decisive end to a period of uncertainty, reinstating a more expansive law and fundamentally altering the compliance obligations for virtually every business in the state.
The Original Ballot Initiative (ESTA)
The narrative begins in 2018 with a grassroots effort known as the "MI Time to Care" ballot initiative. This initiative, which was crafted and submitted with enough signatures to be placed on the November ballot, aimed to create a broad new mandate for paid sick leave. The proposed legislation, titled the Earned Sick Time Act (ESTA), was designed to apply to all employers in Michigan, regardless of their size.
Under the original ESTA, the accrual rate for paid leave was set at 1 hour for every 30 hours worked. The amount of leave an employee could use each year was determined by the employer's size. For businesses with fewer than 10 employees, the annual usage cap was
40 hours of paid leave. For all other businesses with 10 or more employees, the cap was 72 hours per year. This initiative was a significant step toward universal paid leave, introducing a level of generosity and accessibility not seen in previous state laws.
The Legislative "Adopt-and-Amend" Maneuver
Before the public could vote on the initiative, the Michigan Legislature employed a constitutional strategy known as "adopt-and-amend". This maneuver allowed the legislature to bypass a public vote by officially adopting the ballot initiative into law, thereby preventing it from appearing on the ballot. Immediately after adopting it, however, the legislature swiftly amended the act, implementing a significantly scaled-back version. The result was the Paid Medical Leave Act (PMLA).The PMLA, which became effective in March 2019, drastically reduced the scope of the original initiative. It introduced two major changes that limited its reach. First, it narrowed the applicability of the law to only include employers with 50 or more employees, exempting a vast number of small businesses from compliance. Second, it reduced the required paid leave for all eligible employees to a flat 40 hours per year, a notable decrease from the 72 hours proposed for larger businesses in the original ESTA. This legislative move created a legal framework that was in direct opposition to the original public proposal.
The Landmark Michigan Supreme Court Ruling
The legitimacy of the "adopt-and-amend" process was challenged in court, leading to years of legal ambiguity for employers and employees alike. On July 31, 2024, the Michigan Supreme Court delivered a decisive ruling in Mothering Justice et al. v. Attorney General et al.. The court determined that the legislature's maneuver was unconstitutional, making the PMLA invalid and effectively reinstating the original Earned Sick Time Act (ESTA) from 2018.
The ruling established a new effective date for the ESTA: February 21, 2025. This decision concluded a six-year period of legal uncertainty and mandated a sudden, sweeping change for employers. The legal system had, in effect, retroactively validated a six-year-long legal dispute, and the PMLA, the basis for countless HR policies and procedures, was suddenly void.
Key Takeaways and Implications
The reversal of the PMLA and the reinstatement of the ESTA demonstrate a profound shift in the state's legal and administrative landscape. The legislative decision to adopt and amend the ballot initiative created a deep and lasting ripple effect. For six years, employers diligently built HR policies around a law that was vulnerable to being struck down. The recent court decision did not simply change a law; it forced every employer to re-evaluate and rebuild their paid leave policies from scratch in a very short period of time. This highlights the inherent instability of the prior legal framework and the importance of remaining adaptable in response to a changing regulatory environment.
Furthermore, this change mandates a psychological shift in compliance for many businesses. The PMLA's clear exemption for employers with fewer than 50 employees allowed many smaller businesses to operate without any obligation to provide paid medical leave. The reinstatement of the ESTA removes this safety net and brings all employers under the law's purview. This change requires a fundamental shift in compliance mindset from a reactive stance, where a business only worries about the law if they meet a certain size threshold, to a proactive one, where every employer in Michigan must now actively manage and track paid leave to ensure compliance.
The New Rules: A Deep Dive into the Earned Sick Time Act (ESTA)
The transition from the PMLA to the ESTA introduces new and more expansive rules that employers must understand and implement by the effective date of February 21, 2025. This section provides a detailed breakdown of the new provisions, outlining how they differ from the previous regulations.
Who is Covered? Expanded Eligibility for All
The new law broadens both employer and employee coverage. The ESTA applies to all employers in Michigan, effectively eliminating the 50-employee threshold that was a cornerstone of the PMLA. The law differentiates between "small businesses" (fewer than 10 employees) and all other employers, but it does not exempt any business from the mandate.
In terms of employees, the act extends eligibility to all individuals engaged in service to an employer, including full-time, part-time, and seasonal workers. This is a significant expansion from the PMLA, which had numerous exemptions for certain categories of workers, such as executive, administrative, and professional overtime-exempt employees. Under the ESTA, employees who are exempt from overtime under the Fair Labor Standards Act are assumed to work 40 hours per week for accrual purposes, or their normal workweek if it is less than 40 hours.
The New Accrual, Usage, and Carryover Framework
The ESTA introduces a new framework for how paid leave is accrued, used, and carried over. This framework is more generous and structured than the PMLA.
- Accrual Rate: Employees must accrue paid leave at a rate of 1 hour for every 30 hours worked, which is a faster rate than the previous PMLA's 1-for-35-hours rule. Accrual begins on the later of the act's effective date or the employee's start date.
- Annual Usage Caps: The new law establishes a two-tiered usage cap system :
- Employees of small businesses (under 10 employees) can use up to 40 hours of paid leave per year.
- All other employees (10 or more employees) can use up to 72 hours per year.
Carryover Mandate: One of the most critical changes is the new rule regarding unused leave. Under the ESTA, all unused earned sick time must be carried over from one year to the next, up to the annual usage cap. This is a radical departure from the PMLA's limited carryover provisions, which allowed employers to cap carryover at 40 hours or avoid it entirely by frontloading leave.
The Alternative: Frontloading Paid Leave
Employers can choose to use the frontloading method as an alternative to tracking leave accrual on an hourly basis. This involves providing the full annual amount of paid leave to eligible employees at the beginning of each benefit year. The amount is 40 hours for small businesses and 72 hours for other employers.
Under the PMLA, frontloading was a simple administrative tool that allowed employers to avoid the need to carry over unused leave. The ESTA introduces a more complex, but still beneficial, trade-off. The new law requires that unused time be carried over from year to year, but it also states that if an employer frontloads the leave, they are not required to calculate and track accrual or pay out unused time at the end of the year. This is a major administrative benefit that simplifies compliance by removing the need for continuous monitoring. The key is that while frontloading eliminates the carryover requirement for the employer, the employee's ability to use the full accrued amount over time, up to the yearly cap, remains protected.
Permissible Uses of Earned Sick Time
The ESTA provides a comprehensive list of qualifying reasons for which an employee may use their earned sick time. These uses are broader than those covered by the federal FMLA. An employee may use leave for:
- The employee’s or a family member’s mental or physical illness, injury, or health condition, including preventative care, diagnosis, care, or treatment.
- Circumstances related to the employee or a family member being a victim of domestic violence or sexual assault. This can include time for medical care, psychological counseling, obtaining services from a victim services organization, or participating in civil or criminal proceedings related to the violence.
- The closure of the employee’s primary workplace or a child’s school due to a public health emergency.
- The need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency.
- Situations where health authorities or a healthcare provider have determined that the employee or a family member's presence in the community could harm others due to exposure to a communicable disease.
New Hire Waiting Period & Compensation
The ESTA introduces a new hire waiting period for using accrued leave. While accrual begins on an employee’s start date, an employer may require an employee to wait until the 120th calendar day after commencing employment before using any of their accrued earned sick time. This is a slight change from the PMLA's 90-day waiting period.
For compensation, an employer must pay an employee using earned sick time at a rate equal to the greater of either the employee’s normal hourly wage or the minimum wage established under the Improved Workforce Opportunity Wage Act. This calculation does not require the inclusion of overtime pay, bonuses, commissions, or tips.
A Critical Comparison: Michigan's ESTA vs. Federal FMLA
Employers often operate under a dual-compliance framework, managing obligations under both state and federal law. Understanding the distinctions between Michigan's new ESTA and the federal Family and Medical Leave Act (FMLA) is crucial for ensuring comprehensive legal adherence. While both acts offer legal protections for employees in Michigan, their eligibility requirements, benefits, and scope differ significantly. If a leave event qualifies under both laws, the leave must be taken concurrently, not one after the other.
Side-by-Side Comparison of Key Provisions
The FMLA provides up to 12 weeks of unpaid, job-protected leave in a 12-month period for a range of qualifying family and medical reasons, with a provision for up to 26 weeks for military caregiver leave. In contrast, the ESTA provides 40-72 hours of paid leave per year. The FMLA is an unpaid leave, but employers can require or allow employees to substitute accrued paid leave, such as ESTA hours, to cover the time off.
Eligibility and employer size criteria also differ substantially. FMLA eligibility requires an employee to have worked for a covered employer for at least 12 months and a minimum of 1,250 hours in the previous year. The FMLA applies only to employers with 50 or more employees within a 75-mile radius. The ESTA has a much broader scope, applying to virtually all employers and employees in the state, with no hourly or tenure requirements for accrual.
The qualifying reasons for leave also vary. FMLA covers serious health conditions of the employee or immediate family members, as well as the birth or placement of a child for adoption or foster care. The ESTA's qualifying reasons are more extensive, including situations related to domestic violence, sexual assault, and public health emergencies, which are not covered by FMLA. Moreover, the ESTA's definition of "family member" is broader than FMLA's, including siblings, grandparents, and grandchildren in addition to spouses, parents, and children.
| Characteristic | Michigan Earned Sick Time Act (ESTA) | Federal Family and Medical Leave Act (FMLA) |
|---|---|---|
| Governing Law | State of Michigan Law | Federal Law (U.S. Dept. of Labor) |
| Employer Coverage | All employers
| Employers with 50+ employees within 75 miles
|
| Leave Duration | 40-72 hours per year
| Up to 12 workweeks per 12-month period (up to 26 for military caregiver leave)
|
| Compensation | Paid at regular or minimum wage (greater of the two)
| Unpaid, but job-protected
|
| Qualifying Reasons | Broadly includes illness, injury, domestic violence, and public health emergencies
| Specific reasons including a serious health condition, birth/placement of a child, and military exigencies
|
| Covered Relationships | Broad: includes spouses, children, parents, siblings, grandparents, and grandchildren
| Specific: spouses, children, and parents
|
Navigating Compliance and Avoiding Pitfalls
The shift to the ESTA introduces new administrative requirements and strict prohibitions that demand careful attention. Employers must proactively update their policies and systems to avoid significant penalties.
The New Administrative Requirements
The ESTA requires employers to provide clear and timely communication to their workforce. Employers must display an official poster and provide a written notice of employee rights under the Act, a requirement that was also present under the PMLA. The ESTA also provides specific guidelines for employee notice. For foreseeable leave, an employer may require up to 7 days' advance notice. For unforeseeable leave, employees must provide notice "as soon as practicable".
The rules surrounding documentation have been significantly tightened. The ESTA allows employers to request documentation only for absences of more than three consecutive days. The PMLA was less restrictive, allowing employers to request documentation according to their own policies. Additionally, an employer who requests documentation must pay for any associated out-of-pocket costs and cannot delay the commencement of leave while waiting for the documentation to be submitted.
Finally, employers must maintain meticulous records. The ESTA mandates that employers retain records documenting the hours worked and earned sick time taken by employees for not less than three years. This is a longer period than the one-year record-keeping requirement under the PMLA.
Prohibited Actions & Retaliation
The ESTA includes strict anti-retaliation provisions that are essential for employers to understand. An employer is explicitly prohibited from treating earned sick time as an absence that could lead to or result in retaliatory personnel action. This means that an employer’s absence control policy, often referred to as a "no-fault" attendance policy, cannot count approved earned sick time against an employee.
The law also prohibits employers from requiring an employee to search for or secure a replacement worker as a condition for using earned sick time. The responsibility for managing a staffing shortfall during an employee's leave rests entirely with the employer, not the employee.
Penalties for Non-Compliance
The penalties for non-compliance with the ESTA are severe and are designed to deter violations. An employer who fails to provide earned sick time in violation of the act is subject to a civil penalty equal to eight times the employee’s normal hourly wage. If an employer takes retaliatory action against an employee for exercising their rights under the act, they may face a significant administrative fine of up to $1,000. Willful violations of the notice or posting requirements can also result in an administrative fine of up to $100 for each separate violation.
The Indispensable Role of HR Technology
The transition to the ESTA from the PMLA has created a significant administrative burden, especially for small businesses that were previously exempt from paid leave mandates. The ESTA’s multi-layered rules—accrual at 1:30, two-tiered caps for different business sizes, prorating for part-time workers, and mandatory carryover—create a high degree of complexity. This complexity is not just an inconvenience; it is a primary driver of compliance risk. Manually tracking these variables across a workforce is highly prone to error, and a single miscalculation in accrual or usage could lead to a violation and associated financial penalties.
A robust HR and time-tracking platform can mitigate this risk by automating the entire process. Such a system can automatically enforce accrual rules, apply the correct annual usage caps based on business size, and manage the mandatory carryover of unused time without any manual intervention. Platforms can also centralize record-keeping, simplify the process of requesting and documenting leave, and provide a single, auditable source of truth for all leave data. A solution like the one available at get.clockit.io can serve as a critical compliance tool, transforming a complex legal requirement into a streamlined administrative process.
Tables for At-a-Glance Reference
| Characteristic | Michigan's PMLA (Invalid) | Michigan's Reinstated ESTA |
|---|---|---|
| Employer Coverage | Applied to employers with 50 or more employees
| Applies to all employers
|
| Employee Coverage | Excluded certain administrative and professional employees
| Covers all employees (full-time, part-time, seasonal)
|
| Accrual Rate | 1 hour for every 35 hours worked
| 1 hour for every 30 hours worked
|
| Annual Usage Cap | Capped at 40 hours for all eligible employees
| Capped at 40 hours for small businesses, 72 hours for all others
|
| Carryover Rule | Employers were not required to allow carryover if frontloading
| All unused time must be carried over (up to annual cap)
|
| New Hire Waiting Period | 90 days from hire date
| Up to 120 days from hire date
|
| Documentation Rule | Employer could request documentation per their policy
| Only allowed for absences longer than 3 consecutive days
|
| Characteristic | Michigan Earned Sick Time Act (ESTA) | Federal Family and Medical Leave Act (FMLA) |
|---|---|---|
| Governing Body | State of Michigan | U.S. Department of Labor
|
| Employer Coverage | Applies to all employers
| Applies to employers with 50+ employees within 75 miles
|
| Leave Duration | 40-72 hours per year
| Up to 12 workweeks per 12-month period
|
| Compensation | Paid
| Unpaid, but job-protected
|
| Qualifying Reasons | Broadly includes illness, injury, domestic violence, and public health emergencies
| Specific reasons including a serious health condition, birth/placement of a child, and military exigencies
|
| Covered Relationships | Broad: includes spouses, children, parents, siblings, grandparents, and grandchildren
| Specific: spouses, children, and parents
|
Conclusion: Your Action Plan for 2025
The Michigan Supreme Court's ruling marks a definitive end to the prior paid leave framework. It is imperative that employers understand that the Paid Medical Leave Act (PMLA) is no longer valid, and the Earned Sick Time Act (ESTA) is now the law of the land as of February 21, 2025. This transition is not a minor policy tweak; it is a fundamental restructuring of paid leave requirements for employers across the state.
The Employer's Checklist for Proactive Compliance
- Review and Update Internal Policies: Immediately assess existing paid leave policies, handbooks, and collective bargaining agreements to ensure they align with the ESTA’s new accrual rates, annual caps, and mandatory carryover rules.
- Adjust Accrual and Tracking Systems: Ensure that HR and payroll systems are configured to properly track accrual at the new rate of 1 hour for every 30 hours worked and manage the mandatory carryover requirement.
- Post New Notices: Obtain and display the new official posters from the Michigan Department of Labor and Economic Opportunity, and provide written notice to all employees as required by the Act.
- Train Managers on New Rules: Educate managers on the new documentation requirements, which limit requests to absences of more than three consecutive days, and the strict anti-retaliation provisions.
- Assess HR Technology: Evaluate existing HR technology to determine if it can effectively automate the complex and multi-tiered compliance requirements of the ESTA.
The Bottom Line
The new law represents a significant expansion of employee rights and employer obligations. The key to successful compliance is to move from a reactive stance, which may have worked for some under the PMLA, to a proactive, technologically-supported compliance strategy. By understanding the historical context and the nuances of the new law, employers can effectively navigate this transition, manage their workforce, and ensure they remain in full compliance.
References
https://ballotpedia.org/Michigan_Paid_Sick_Leave_Initiative_(2018
https://www.sixfifty.com/blog/michigan-paid-sick-leave-laws-and-requirements/
https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-408-963
https://pulpstream.com/resources/blog/fmla-michigan
https://www.legislature.mi.gov/documents/2017-2018/publicact/htm/2018-PA-0369.htm
https://www.paychex.com/articles/compliance/michigan-earned-sick-time-act
https://www.dol.gov/agencies/whd/fact-sheets/28-fmla
https://www.dol.gov/sites/dolgov/files/oasp/legacy/files/paidleavefinalrulecomparison.pdf
https://www.dol.gov/general/topic/benefits-leave/fmla
https://www.fosterswift.com/newsroom/publications/employers-know-michigan-amended-earned-sick-act
https://couzens.com/wp-content/uploads/2019/02/Paid-Medical-Leave-Act.pdf https://www.paychex.com/articles/compliance/michigan-earned-sick-time-act https://www.paychex.com/articles/compliance/michigan-earned-sick-time-act
