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Earned Sick Time Act Update

An hour before it was scheduled to go into effect on February 21, 2025, the Michigan legislature came to a compromise on an amendment to the Earned Sick Time Act (“ESTA”). There were many substantive changes in the amendment, especially for “small businesses” who employ ten or fewer employees. Building from our previous post on the subject, this update will provide a broad overview of the rules under the newly amended statute.

• ESTA applies to all employers in Michigan with one or more employee.
• All employees, with two exceptions, are eligible to accrue paid sick time.
• The two exceptions are minors, and employees who both make their own schedule and are not required to schedule a minimum number of hours.
• Effective Date:
  • Small businesses: All eligible employees, regardless of status (salaried, full-time, part-time, temporary, seasonal, hourly, etc.), will begin accruing one hour of paid sick time for every thirty hours worked as of 10/1/25 if they are employed as of that date or 120 days after the employee start date if hired after 10/1/2025.
  • Businesses with more than ten employees: All eligible employees, regardless of status (salaried, full-time, part-time, temporary, seasonal, hourly, etc.), will begin accruing one hour of paid sick time for every thirty hours worked as of 2/21/25 if they are employed as of that date or 120 days after the employee start date if hired after 2/21/2025.
• Accrual cap:
  • Small businesses: At least forty hours of paid sick time per year, to the extent such hours are accrued.
  • Businesses with more than ten employees: At least seventy-two hours of paid sick time per year to the extent such hours accrue
• Unused hours must be allowed to rollover each year and employers are not required to pay out the time at the end of the year or at the time of separation.
• Sick time must be paid at the greater of the employee’s normal hourly wage for the previous pay period or minimum wage.
• Alternatively, an employer may provide an employee with paid sick time for immediate use at the beginning of each year in the amounts required under the accrual cap. This option also voids the rollover provision.

Those are the broad strokes of the benefits to employees under ESTA. What follows are some of the corresponding burdens on businesses.

• Only after an employee uses three consecutive days of earned sick time may an employer request an employee produce documentation.
• If an employee exercises their rights under ESTA and their employer takes any “adverse employment actions” within ninety days, it may be determined that the employer has retaliated.
• Employers who choose not to frontload must track the accrued sick time of its employees and keep such records for three years. Failure to keep such records results in a presumption that the employer has violated ESTA.
• An employee has up to three years to file a claim against an employer for violations of ESTA.
• The remedies available to employees include payment for used earned sick time, reinstatement, back pay with benefits, liquidated damages, and reasonable attorney fees.
• Employers are required to provide all employees with written notice advising of their rights under ESTA, provide the same to all new hires, and display a poster in a conspicuous place explaining ESTA.
• Deadline for notice to employees:
  • Small business: Required to provide all employees with written notice advising of their rights under ESTA by October 31, 2025.
  • More than ten employees: Required to provide all employees with written notice advising of their rights under ESTA by March 19, 2025.

This is a complex statute with a great deal of minutia. The liabilities businesses are exposed to through non-compliance are large. The best strategy is to be proactive. Our firm’s guidance is that any existing employee handbooks should be revised, and that any employers not currently using employee handbooks have them drafted, so that they can serve as written notice to employees.

We at GGTM are available to help your company comply with ESTA and answer any questions you may have. Should you wish to schedule a consultation with us, please contact our office.

GGTM Law

We are a client-centric boutique law firm in Muskegon, Michigan, comprised of experienced Muskegon attorneys committed to serving the legal needs of a wide variety of businesses and individuals in Muskegon, Grand Rapids, Grand Haven, Spring Lake, Holland, throughout West Michigan, and beyond.