What Every Michigan Business Owner Needs to Know
Michigan’s Earned Sick Time Act (ESTA) took effect February 21, 2025 and unlike the law it replaced, it applies to every Michigan employer regardless of size. If you have even one employee in Michigan, you have new legal obligations. We continue to see businesses who have not complied with the law and are facing administrative actions from the state. If your business has not put a written policy together, contact us and we will get you in compliance.
How Much Sick Time Must You Provide?
Employees earn 1 hour of sick time for every 30 hours worked.
10 or more employees:
Up to 72 hours of paid sick time per year. Unused time carries over annually.
Fewer than 10 employees:
The first 40 hours per year must be paid; up to an additional 32 hours may be unpaid. The same carryover rules apply. The small-employer provision does not exempt you from the law — it only adjusts the paid-to-unpaid ratio.
Employees accrue from day one. You may require new employees to wait up to 90 days before using their earned time.
Your Written Policy Obligations
This is where many Michigan employers are currently exposed. The ESTA requires you to:
- Provide written notice of ESTA rights to employees at the time of hire.
- Post a required notice in a conspicuous location in your workplace.
- Maintain records of each employee’s accrual and usage for at least three years.
Your policy must address accrual, permitted uses (illness, family care, domestic violence situations, and public health emergencies), any advance notice requirements, and when you may request documentation — which is limited to absences exceeding three consecutive days.
If your handbook was written under the old Paid Medical Leave Act, it is almost certainly not ESTA-compliant. The two laws are not interchangeable.
The Risk of Non-Compliance
Employees may file complaints with the Michigan Department of Labor and Economic Opportunity. The ESTA’s anti-retaliation provision also creates a rebuttable presumption against you if you take adverse action against an employee within 90 days of their use of sick leave.
Options
The law does allow PTO in place of sick time, subject to some specific rules. I have drafted many PTO policies that comply with the law to provide employees with sick time, while limiting the disruption to business operations.
