Michigan is preparing to implement a transformative update to its employee leave policies in 2025. On February 21, 2025, the Earned Sick Time Act (ESTA) will go into effect, replacing the previous Paid Medical Leave Act (PMLA). This shift comes after the Michigan Supreme Court ruled in 2024 that legislative amendments made to the original voter-initiated 2018 laws were unconstitutional. As a result, the stronger provisions of the original initiative will now become law, requiring significant adjustments from employers statewide.
The impact of ESTA is broad. It extends mandatory sick leave benefits to nearly all employees in Michigan regardless of full-time or part-time status, company size, or industry. Where the previous law exempted many small businesses and part-time employees, ESTA ensures that almost everyone who works in the state is entitled to accrue and use paid sick leave. Employers must be ready to update policies, systems, and training protocols to comply with the more expansive requirements.
Please note this blog post area. If you have questions about a specific legal issue, we always recommend that you consult an attorney to discuss the particulars of your case. Should be used for learning and illustrative purposes. It is not a substitute for consultation with an attorney with expertise in this
Who Is Covered–and Who Is Not?
One of the most notable features of the new law is its comprehensive scope. ESTA applies to virtually all individuals employed within the state, including part-time, temporary, and seasonal workers. Few exceptions remain. Unpaid interns, youth employees under 18, federal government workers, and workers whose schedules are genuinely self-directed without employer consequences are not covered by the act.
Also preserved under ESTA are protections for employees covered under collective bargaining agreements (CBAs) that were in place prior to the law’s effective date. Once those CBAs expire, however, covered employees must receive the full protections of ESTA unless new agreements provide greater benefits. The law also includes a rehire provision that requires reinstatement of unused sick time if an employee is rehired within a defined period, usually within six months.
How Sick Time Is Accrued
Under ESTA, employees begin accruing sick leave on their first day of employment or on February 21, 2025, for current employees at a rate of one hour for every 30 hours worked. For salaried or exempt employees, employers are to assume a standard 40-hour work week unless evidence suggests otherwise.
Employers do have the option to front-load sick time at the beginning of a benefit year instead of tracking accruals. For companies with 11 or more employees, this means providing 72 hours of sick leave up front. Employers with 10 or fewer employees must provide at least 40 hours. Front-loading can simplify administration and eliminates the need to carry over unused time or pay out sick time upon termination unless otherwise specified by the employer’s policy.
Annual Limits and Carryover
While ESTA allows employees to accrue an unlimited amount of sick time, employers are only required to allow use of up to 72 hours per year for larger employers and 40 hours per year for small businesses. The distinction in caps based on employer size helps to balance the needs of small business owners with the intent of protecting worker health.
In workplaces where sick time is accrued over the course of the year, unused hours up to the annual limit must carry over into the following benefit year. However, employers who choose to front-load the entire year’s allotment are not obligated to allow carryover. Clear communication about which method an employer uses is critical for compliance and transparency.
Approved Uses of Sick Time
Sick leave under ESTA may be used for a wide range of personal and family health needs. Employees can take time off for their own illness or injury, for preventative medical care, or to care for a family member experiencing a medical issue. Additionally, leave is available when schools or daycare centers are closed due to public health emergencies, or when an employee or a family member is the victim of domestic violence or sexual assault.
The law allows employers to require reasonable notice for foreseeable absences—up to seven days in advance. For unforeseen emergencies, employees are required to provide notice as soon as practicable under the circumstances. This dual approach provides both structure for employers and flexibility for employees dealing with sudden health or safety needs.
Documentation and Employer Policies
If an employee is absent for more than three consecutive workdays, employers are permitted to request reasonable documentation supporting the need for leave. The law allows up to 15 days for an employee to provide this documentation and requires that any costs incurred in obtaining it must be reimbursed by the employer. This provision is meant to ensure fairness and prevent financial burdens on workers seeking to use their lawful benefits.
To maintain compliance, employers should update their leave policies and handbooks, ensuring that employees understand their rights and obligations under ESTA. This includes outlining procedures for requesting leave, expectations for documentation, and any waiting periods before leave can be used.
Waiting Period for Use of Sick Leave
While sick time begins to accrue on an employee’s first day of work, employers may implement a waiting period of up to 120 calendar days before a new employee can begin using their paid leave. This waiting period is slightly longer than what was previously allowed and gives employers some flexibility while still honoring the principle of early accrual.
If an employee leaves and is then rehired within six months, the employer must reinstate the unused balance of accrued sick time. This encourages employee mobility while ensuring that earned benefits are not forfeited unfairly.
How Sick Leave Is Paid
Compensation for sick time must be at an employee’s regular hourly wage or Michigan’s minimum wage whichever is greater. However, ESTA does not require employers to factor in overtime, tips, bonuses, commissions, or other forms of incentive pay when calculating sick leave wages.
Upon termination, resignation, or separation, employers are not required to pay out unused sick leave, unless they voluntarily adopt a policy to do so. Employers that do choose to include sick leave in their final payout policies should clearly state this in writing to avoid disputes.
Enforcement and Protections
Unlike earlier versions of the law, the current form of ESTA does not include a private right of action, meaning employees cannot file lawsuits directly related to violations of the act. Instead, enforcement is managed by the Michigan Department of Labor and Economic Opportunity. Employees may submit complaints, and the department is authorized to investigate and take action as needed.
The act also removed a prior provision that would have created a rebuttable presumption of retaliation for any adverse action taken within 90 days of an employee’s use of leave. Instead, standard anti-retaliation protections still apply, but employers have more flexibility in managing performance and behavior without automatically triggering legal challenges.
Implementation Deadlines and Employer Obligations
Employers were required to post notices and provide written summaries of employee rights under ESTA within 30 days of the law’s effective date. For small employers defined as those with 10 or fewer employees there is a grace period to comply with the sick time provisions, with full compliance required by October 1, 2025. Start-up businesses have an additional buffer: they are not required to provide paid leave until they reach the 11-employee threshold or have been operating for three years, whichever comes first.
These staggered compliance dates are designed to ease the transition for smaller or newer businesses. Nevertheless, it is strongly recommended that all employers begin preparing well in advance, as enforcement will be based on whether companies meet the standards appropriate to their category.
Related Minimum Wage Increases
The rollout of ESTA coincides with significant increases to Michigan’s minimum wage. As of February 2025, the state’s minimum wage will rise to $12.48 per hour. Annual increases are planned through 2028, when the wage is expected to reach nearly $15 per hour. The state is also phasing out the subminimum tipped wage, which will be fully eliminated by 2030.
These concurrent changes highlight the broader labor policy shift underway in Michigan. For employers, it means reevaluating payroll systems, employee classification, and total compensation strategies in tandem with sick leave policies.
Preparing for Compliance: Key Recommendations
To ensure compliance with the new law, Michigan employers should begin with a thorough review of existing paid leave policies. Any inconsistencies with ESTA should be corrected, and HR staff should be trained on new procedures, including documentation requirements and tracking accruals or front-loaded balances.
Employers should also make sure payroll systems are equipped to manage leave accurately and that all leave-related communications to employees are up to date and accessible. For businesses that operate across multiple states, it’s especially important to distinguish between Michigan-specific requirements and other state or federal standards.
Clear documentation, consistent enforcement of policies, and a focus on open communication with employees will be key to successful implementation.
Final Thoughts: A Turning Point for Workplace Benefits in Michigan
The Earned Sick Time Act represents a major step forward for worker protections in Michigan. With nearly universal coverage, flexible accrual and usage options, and new enforcement mechanisms, the law ensures that workers no longer have to choose between their health and their paycheck.
For employers, the transition brings both challenges and opportunities. Those who prepare thoughtfully and proactively will not only maintain compliance but also position themselves as supportive, responsible workplaces in a competitive labor market. By understanding and embracing the requirements of ESTA, Michigan businesses can build a more resilient and equitable workforce.
Contact Tishkoff
Tishkoff PLC specializes in business law and litigation. For inquiries, contact us at www.tish.law/contact/. & check out Tishkoff PLC’s Website (www.Tish.Law/), eBooks (www.Tish.Law/e-books), Blogs (www.Tish.Law/blog) and References (www.Tish.Law/resources).
References
- Michigan Department of Labor and Economic Opportunity: www.michigan.gov/leo
- Manistee News Advocate, “What to know about Michigan’s Earned Sick Time Act” www.manisteenews.com/news/article/michigan-earned-sick-time-act-20066168.php
- Paychex, “Michigan’s Earned Sick Time Act: What Employers Need to Know” www.paychex.com/state-resources/michigan/michigan-earned-sick-time-act
- Detroit Eater, “Michigan’s Minimum Wage Law and Paid Leave Changes Explained” www.eater.com/2025/3/11/24382547/michigan-minimum-wage-law-increase-sick-leave-one-fair-wage-explained
- Our Midland, “Business owners and lawmakers discuss Michigan wage and leave law reforms” www.ourmidland.com/news/article/midland-business-leaders-professionals-debate-20036572.php