By 2026, Michigan’s Earned Sick Time Act should no longer be treated as a moving target. The law took effect in its amended form on February 21, 2025, after the Michigan Supreme Court’s 2024 decision upended the old Paid Medical Leave Act framework and the Legislature responded with Public Act 2 of 2025. Yet many Ann Arbor employers are still administering sick leave as though the state merely expanded PTO a little. That is the wrong frame. The Earned Sick Time Act is a rights statute with its own accrual rules, use rules, documentation limits, notice requirements, recordkeeping requirements, posting obligations, anti-retaliation standards, and enforcement process. Employers that continue to treat it like a casual policy preference rather than a compliance regime are exposing themselves to avoidable complaints, employee relations problems, and in some cases civil penalties. ¹²⁵
The mistakes are especially common among local employers with mixed workforces. Ann Arbor businesses often have a blend of salaried professionals, hourly staff, part-time employees, student workers, temporary workers, and employees whose schedules vary week to week. That is exactly the kind of workplace where one-size-fits-all leave administration tends to break down. The law does not just speak to classic full-time hourly employees. It expressly reaches employees in Michigan, provides different usage caps depending on employer size, sets special rules for frontloading part-time staff, and assumes overtime-exempt salaried employees work forty hours per week unless their normal workweek is less than forty. Employers who never adjusted their payroll logic, handbook language, manager training, or attendance policies after the 2025 changes are still making the same category errors they made when the law first took effect. ¹³
One of the biggest ongoing errors is a persistent misunderstanding about coverage. Some employers still speak as though earned sick time only applies to full-time employees or to workers who hit a minimum hours threshold. That is not how the statute works. The Act generally requires an employer to provide earned sick time to employees in Michigan, subject to specific statutory exemptions rather than broad employer discretion. The FAQ confirms that all Michigan employers with one or more employees are covered, and that eligibility turns on whether the individual is an employee under the law, not on whether the employee is designated part-time, seasonal, or low-hour. The exemptions are narrower than many assume. Unpaid interns and trainees, certain youth workers covered under the Youth Employment Standards Act, U.S. government employees, and certain genuinely self-scheduling workers may fall outside the law, but a label such as per diem, on-call, or flex does not by itself create an exemption where the employer still controls the schedule. ¹³
A closely related mistake is failing to appreciate how the law treats the geographic scope of work. Ann Arbor employers with remote staff, regional travel, or hybrid teams sometimes assume that the employee must reside in Michigan, or that the employer must be headquartered in Michigan, for the law to apply. The state’s guidance says otherwise. The Act applies to work performed by employees physically located in Michigan regardless of where the employer is based, and it also applies to employees whose employment is based in Michigan even when the employer sends them temporarily out of state. At the same time, the law may not cover a worker merely passing through Michigan unless the worker earns at least half of compensation for time spent in Michigan. That means local businesses with remote employees, traveling field staff, and interstate operations need a genuine situs-of-work analysis, not a shortcut based on payroll location or home address. ³
Another recurring problem is that employers still confuse accrual with use. Under the statute, employees accrue earned sick time at a minimum rate of one hour for every thirty hours worked. Small businesses may limit paid use to forty hours in a year, while other employers may limit paid use to seventy-two hours in a year unless they choose a higher limit. Those are use caps, not necessarily accrual caps. The FAQ gives examples showing that an employee may accrue more than the annual use limit. In practice, some employers wrongly stop accrual once an employee reaches forty or seventy-two hours, while others tell employees they cannot bank time beyond the annual use cap even when the employer uses an accrual-based system. That kind of mismatch between policy language, payroll settings, and statutory text remains one of the clearest compliance failures in the field. ¹³
Salaried employees are another trouble spot. Many employers still assume that because an employee is exempt from overtime, there is no need to track hours for earned sick time purposes. The Act does not allow that shortcut. For an employee exempt under the Fair Labor Standards Act’s executive, administrative, or professional exemption, the statute and LEO guidance assume a forty-hour workweek unless the employee’s normal workweek is less than forty hours, in which case accrual is based on the normal workweek. This matters a great deal in Ann Arbor, where employers frequently use salaried classifications for office staff, nonprofit professionals, research personnel, and part-time administrators. If an employer simply gives those employees a generic PTO allotment without checking whether the plan truly matches ESTA’s accrual, carryover, and usage conditions, the employer may be out of compliance even if it believes it is being generous overall. ¹³
Part-time employees are where the law still catches many employers flat-footed. Some businesses frontload a flat bank of hours to everyone, then assume the problem is solved. But the statute and FAQ are more specific. Employers may frontload leave instead of using accrual, and they may use different methods for different classifications of employees. For full-time employees, that is relatively straightforward. For part-time employees, however, the employer must provide written notice at hire of the hours the employee is expected to work during the year, frontload an amount at least proportional to what the employee would accrue if the expected hours are worked, and provide additional earned sick time if the employee works more than expected. Employers that frontload the same part-time amount every year without written expected-hours notices or without a mechanism to true up additional time are still taking an unnecessary risk. That is particularly relevant in college towns, where student schedules, clinic staffing, hospitality hours, and nonprofit programming often fluctuate sharply over the course of the year. ¹³
A different category of mistake involves waiting periods and new hires. Some employers still rely on legacy handbook language referring to ninety-day waiting periods or probationary ineligibility rules. Under current state guidance, if an employer uses the accrual method, it may require a new employee hired on or after February 21, 2025, to wait until the 120th calendar day after commencing employment before using accrued earned sick time. That is not the same as saying the employee does not accrue time until day 120. Accrual begins earlier under the statute; the waiting period concerns use. An employer that delays accrual itself, or that applies an outdated ninety-day rule, is not following the current framework. The same issue appears when employers fail to restore continuity for employees reemployed within the applicable period identified by state guidance. ³
Many employers also still get the permitted uses wrong, either by narrowing them too much or by acting as though every use must involve the employee’s own illness. The Act allows use for a broad range of reasons involving the employee or a family member, including mental or physical illness, diagnosis, treatment, preventive care, domestic violence or sexual assault-related needs, certain meetings at a child’s school or place of care, and certain public health emergency closures or communicable-disease situations. The statute’s family-member definition is broad, and the law expressly bars an employer from requiring an employee to search for or secure a replacement worker as a condition of using earned sick time. Employers that still tell staff that sick time is only for the employee’s own doctor visit, or that school-related health meetings do not count, or that a worker must find coverage before leaving, are not simply being strict managers. They are applying rules that conflict with the law. ¹³
Notice and documentation remain among the most misunderstood operational issues. Employers often overread their own attendance policies and underread the Act. For foreseeable leave, an employer may require advance notice, but not more than seven days before the leave begins, and only through a written policy that satisfies the statute. For unforeseeable leave, the employee must provide notice as soon as practicable, or in accordance with the employer’s written policy if that policy lets the employee give notice after becoming aware of the need for leave and if the employee actually received the written policy. On documentation, the law does not permit employers to demand a doctor’s note for every absence. State guidance says reasonable documentation may be required only when the earned sick leave lasts more than three consecutive days, the employee has up to fifteen days after request to provide it, the documentation should not disclose the diagnosis or details of violence, and the employer must pay the employee’s out-of-pocket costs of obtaining the documentation. Employers that reflexively ask for a note on day one, insist on diagnostic detail, or delay leave until paperwork arrives are still applying rules that the state has already rejected. ³
Retaliation is another area where employers are still underestimating risk. The Act does not only ban explicit discharge for using sick time. LEO’s guidance states that an employer’s absence-control policy must not treat earned sick time taken under ESTA as an absence that may lead to or result in retaliatory personnel action, unless the employee failed to follow the employer’s valid written notice policy as allowed by the Act. This is a substantial point for employers with point-based attendance systems, occurrence tracking, discipline matrices, and bonus plans tied to perfect attendance. If protected sick time still generates points, warnings, or adverse scheduling consequences under those systems, the employer may have a retaliation problem even if the handbook says the company complies with Michigan law. The law also protects workers who mistakenly but in good faith allege a violation, which means retaliation exposure is not limited to employees who turn out to be legally correct on every detail. ³⁴
Recordkeeping and payroll administration are still weaker than they should be. The FAQ states that employers must retain records documenting hours worked and earned sick time taken for not less than three years, and those records must be available to the Wage and Hour Division with appropriate notice and at a mutually agreeable time. This sounds simple, but many employers with mixed workforces have fragmented systems. Hours may be in a timekeeping platform, leave balances in payroll, onboarding notices in a human resources folder, and schedule selection data somewhere else entirely. When a complaint arrives, employers sometimes discover they cannot reconstruct accruals, notices, carryover, or prior deductions confidently enough to defend their practices. A compliance policy is only as good as the records that prove it. ³
The notice and posting rules are another continuing source of preventable violations. The statute requires written notice to employees containing specified information, including the amount of earned sick time to be provided, the employer’s chosen twelve-month period, the terms of use, the prohibition on retaliation, and the right to file a complaint. Employers also must display the required poster in a conspicuous place accessible to eligible employees. The FAQ states that the written notice had to be provided at hiring or by the post-amendment deadline set by the 2025 changes, whichever was later, and LEO separately states that the poster must be displayed in English. Some employers mistakenly think that revising the handbook alone satisfies both obligations, or that emailing a policy update to current staff retroactively cures the absence of required notice content. Others simply never posted the current state poster because they believed their old Paid Medical Leave Act posting was close enough. These are easy errors to fix, but they are still errors. ¹³⁴
A more subtle problem is the assumption that existing PTO policies automatically satisfy the Act. The statute does allow an employer to comply through a paid leave policy other than one specifically labeled earned sick time, so long as the policy provides at least the same amounts of leave, for the same purposes, under the same conditions, and accrues at an equal or greater rate. That sounds flexible, but it is not a blanket safe harbor for any generous PTO plan. A PTO policy can fail even when its total annual hours look adequate if, for example, it does not allow use for all protected ESTA purposes, imposes stricter notice or documentation rules than the Act permits, limits increments more harshly than the employer uses for other absences, mishandles carryover, or allows managers to pressure employees into using vacation instead of protected sick time. Ann Arbor employers that rely on legacy PTO banks should be testing equivalency term by term rather than assuming total hours alone are enough. ¹³
The interaction between carryover and frontloading also remains misunderstood. Employers often believe that frontloading automatically eliminates all carryover concerns. Under the FAQ, employers using a frontloading method still must calculate and track employee accruals. That point surprises many employers because it undermines the popular assumption that frontloading is pure simplification. In reality, frontloading can reduce some year-end disputes, but it does not excuse employers from understanding whether their method complies for each class of employees, especially part-time workers and employees whose expected hours change. Likewise, employers using an accrual model must pay close attention to what carries over, how annual use caps work, and whether their payroll system distinguishes between accrued balance and permitted annual use. ³
Unionized settings create their own confusion. State guidance explains that for collective bargaining agreements in effect on or after February 21, 2025, the agreement’s terms can continue to govern if the agreement includes terms relating to sick leave, sick time, PTO with sick-time uses, or even an express exclusion of sick leave benefits, until the agreement expires, becomes amendable, or is renewed, extended, or renegotiated. Employers sometimes misread this as a permanent exemption for unionized employees. It is not. It is a timing rule tied to the life of the agreement. Any Ann Arbor employer with represented employees should be checking not just whether a CBA exists, but whether it addresses leave, when it expires, when it becomes amendable, and whether subsequent bargaining activity has triggered ESTA’s application. ³
Small-business status is another area where employers oversimplify. The FAQ says a small business is an employer with ten or fewer employees, counting employees across the United States or its territories, including full-time, part-time, temporary workers, and workers supplied through a temporary service or staffing agency or similar entity. Once an employer has eleven or more employees for twenty or more workweeks in the current or prior calendar year, the employer loses small-business status until it later again satisfies the rule described by the state. That means employers cannot just look at today’s headcount and declare themselves a small business for sick time purposes. Businesses with seasonal swings, staffing agencies, or multiple affiliated operations should be especially cautious before using the lower forty-hour annual use cap or delayed small-business rules. ³
Employers also continue to underestimate the enforcement machinery. The statute allows an affected employee to file a claim with the department within three years after the violation, and the state’s online wage complaint materials likewise identify a three-year filing period for earned sick time complaints. The law authorizes investigation by the department, civil remedies, and civil fines. The current statute states that an employer that fails to provide earned sick time in violation of the Act can face a civil fine of up to eight times the employee’s normal hourly wage, and willful notice or posting violations can lead to additional fines. In other words, ESTA is not merely a policy dispute to be handled informally by a supervisor. It is a wage-and-hour enforcement matter with a complaint channel that the state openly publicizes. Employers that still treat employee questions about sick time as grumbling rather than compliance signals are inviting a more formal dispute than they may expect. ¹⁴
The legislative history matters here because it explains why the law still feels unfamiliar to many employers in 2026. The House legislative analysis on the 2025 amendatory bill notes that the Supreme Court’s 2024 decision restored the original Earned Sick Time Act after the Legislature’s earlier same-session amendment was held unconstitutional, and that House Bill 4002 then modified the restored law before it took effect in February 2025. That sequence helps explain why some employers are still operating from old Paid Medical Leave Act assumptions, old posters, old handbook language, or old vendor configurations. But history is not a defense. By 2026, employers are expected to be administering the law as it now exists, not as it existed before the Supreme Court’s ruling or before the 2025 legislative revisions. ²⁵
For Ann Arbor employers, the practical lesson is not simply offer sick time. The real lesson is that compliance now requires alignment across legal interpretation, handbook drafting, onboarding, payroll, scheduling, attendance discipline, and manager training. Employers should know which employees are covered, how accrual is calculated for hourly and salaried staff, whether part-time frontloading is supported by written expected-hours notices, whether the 120-day waiting rule is being applied correctly, whether documentation requests are lawful, whether attendance systems penalize protected leave, whether records can prove compliance for three years, and whether the current state notice and poster are actually in use. A business that gets these pieces right is far less likely to face the kind of avoidable dispute that begins with a small scheduling conflict and ends with a formal wage complaint. ¹²³⁴
The bottom line is that the biggest ESTA mistakes in 2026 are no longer novel or hard to spot. They are the ordinary mistakes of employers who never fully rebuilt their systems after Michigan changed the rules. In a city like Ann Arbor, where employers often manage mixed classifications and nontraditional scheduling, those mistakes show up quickly. The employers in the best position are not the ones with the longest handbook or the most polished HR slogans. They are the ones whose policies, payroll settings, notices, records, and frontline management practices all tell the same legal story. Under Michigan’s Earned Sick Time Act, consistency is no longer just good administration. It is compliance. ¹²³⁴⁵
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Footnoted Sources
- Michigan Earned Sick Time Act, 2018 Public Act 338, as amended, MCL 408.961 through 408.968. https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-Act-338-of-2018
- Michigan Department of Labor and Economic Opportunity, Bureau of Employment Relations, Wage and Hour Division, “Earned Sick Time Act – Effective Feb. 21, 2025.” https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/paid-medical-leave-act
- Michigan Department of Labor and Economic Opportunity, Bureau of Employment Relations, Wage and Hour Division, “Earned Sick Time (ESTA) FAQ.” https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/frequently-asked-questions/wage-and-hour/earned-sick-time-faqs
- Michigan Department of Labor and Economic Opportunity, Wage and Hour Division, “Filing an Earned Sick Time Complaint,” “Online Employment Wage Complaint Form,” and “Earned Sick Time Act – Required Poster.” https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/poster-wage-and-hour-posting-requirements-for-employers
- Michigan House Legislative Analysis, House Bill 4002, Summary as Enrolled/Enacted Version, dated February 27, 2025. https://legislature.mi.gov/documents/2025-2026/billanalysis/House/pdf/2025-HLA-4002-2W731ZYS.pdf
This publication is for general informational purposes and does not constitute legal advice. Reading it does not create an attorney-client relationship. You should consult counsel for advice on your specific circumstances.