Earned Sick Time Act Frequently Asked Questions (FAQ)
NOTE This is not legal advice and is subject to change at any time
What employers are covered by the act?
- All Michigan employers that have one or more employee(s), excluding employees of the United States Government.
- Exclusion based on Federal Law:
- Railway workers and employers covered by the Railroad Unemployment Insurance Act (RUIA) are preempted from coverage under the Earned Sick Time Act.
What employees are eligible to receive earned sick time?
- An eligible employee is an individual engaged in service to an employer in the business of the employer, except those employed by the U.S. government. Michigan case law uses the economic reality test to determine whether an individual is an employee.
- Generally, publicly elected officials, members of publicly appointed boards and commissions, and similar public office holders are not considered employees for purposes of ESTA, even if paid or receiving some form of compensation, unless the governing entity treats these individuals as employees.
How does the ESTA apply to work performed outside the state of Michigan, or to employers located outside the state of Michigan?
- The ESTA applies to work performed by employees who are physically located in Michigan, regardless of the employer location.
How to determine if an employer is a “small business” under the ESTA?
- All employees of the employer within the United States or its territories are included for purposes of the total number of employees.
- An employer is considered a “small business” if it employs nine or fewer employees and employed 10 or more employees in 19 or fewer workweeks in the current or previous calendar year. The workweeks with 10 or more employees need not be consecutive. This includes full-time, part-time, and temporary employees including those provided through a temporary service or staffing agency or similar entity.
- Once an employer employs 10 or more employees for 20 or more workweeks in the current or prior calendar year, the employer cannot be a "small business" again until it meets the requirements above.
Example: Consider a new employer that employs nine individuals from January 2025 through March 2025, then employs 10 individuals for any 20 weeks from April 2025 through Sept. 2025, but then employs only 9 employees again starting in Oct. 2025 and continuing indefinitely. This employer was a “small business” from Jan. 2025 until it reached the 20-workweek threshold. Once they reached the 20 or more workweeks with 10 or more employees' threshold, this business will not be a “small business” for the remainder of 2025 and all of 2026. Starting in Jan. 2027, however, this employer can again be considered a “small business.”
When does an eligible employee begin to accrue earned sick time?
- Accrual begins on Feb. 21, 2025, or upon commencement of the employee's employment, whichever is later.
What is the accrual for hourly and salaried employees?
- Small business employers:
- Employees of a small business shall accrue a minimum of one hour of earned sick time for every 30 hours worked but, shall not be entitled to use more than 40 hours of paid earned sick time in a calendar year unless the employer selects a higher limit. If an employee of a small business accrues more than 40 hours of earned sick time in a calendar year, the employee shall be entitled to use an additional 32 hours of unpaid earned sick time in that year, unless the employer selects a higher limit. Employees of a small business must be entitled to use paid earned sick time before using unpaid earned sick time.
- All other employers:
- All other employees shall accrue a minimum of one hour of paid earned sick time for every 30 hours worked but shall not be entitled to use more than 72 hours of paid earned sick time per year, unless the employer selects a higher limit.
- Salaried employees: For purposes of earned sick time accrual under this act, an employee who is exempt from overtime requirements under section 13(a)(1) of the Fair Labor Standards Act, 29 USC 213(a)(1), is assumed to work 40 hours in each workweek unless the employee’s normal work week is less than 40 hours, in which case earned sick time accrues based upon that normal workweek.
What effect does the ESTA have on collective bargaining agreements on or after Feb. 21, 2025?
- The ESTA has two sections that reference collective bargaining agreements:
(1) This act provides minimum requirements pertaining to earned sick time and shall not be construed to preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy, or standard, including a collective bargaining agreement, that provides for greater accrual or use of time off, whether paid or unpaid, or that extends other protections to employees.
(2) This act does not do any of the following:
(a) Prohibit an employer from providing more earned sick time than is required under this act.
(b) Diminish any rights provided to any employee under a collective bargaining agreement.
(c) Subject to section 12, preempt or override the terms of any collective bargaining agreement in effect prior to the effective date of this act.
(d) Prohibit an employer from establishing a policy that permits an employee to donate unused accrued earned sick time to another employee.
Sec. 12:
If an employer’s employees are covered by a collective bargaining agreement in effect on the effective date of this act, this act applies beginning on the stated expiration date in the collective bargaining agreement, notwithstanding any statement in the agreement that it continues in force until a future date or event or the execution of a new collective bargaining agreement.
Applying these sections depends on the specific terms and conditions of the collective bargaining agreement, and these two sections preclude interference with current agreements when the parties have negotiated sick leave benefits. Thus, the Wage and Hour Department has identified two scenarios that determine whether the ESTA applies to employees beginning on Feb. 21, 2025:
- The collective bargaining agreement includes terms regarding sick time or sick leave benefits:
Provided that the collective bargaining agreement includes terms related to sick leave, sick time, PTO with uses for sick time, or a similar benefit, the collective bargaining agreement terms apply, even if the benefit is less than what is required by the ESTA, until the agreement expires or is renewed, extended, or otherwise renegotiated. The agreement also applies in situations where the agreement expressly excludes sick leave benefits.
2. The collective bargaining agreement is silent as it relates to sick time or sick leave benefits:
Employees covered by a collective bargaining agreement that is completely silent on sick leave, either for the entire unit or for specific classifications covered by the agreement, are covered by the ESTA and begin accruing benefits on Feb. 21, 2025.
What is a benefit year?
- A benefit year is a regular and consecutive twelve-month period determined by the employer that is used to calculate an eligible employee’s benefits.
Can an employer allow more than 72 hours of earned sick time to be accrued and used?
- Yes, the ESTA is the minimum sick leave requirement. Employers may allow employees to accrue more than 72 hours of earned sick leave in the 12-month period. Likewise, employers are permitted by the ESTA to limit the use of earned sick time to 72 hours per 12-month period, but employers may allow employees to use more.
Can an employee carry over unused earned sick time from one benefit year to the next?
- Yes. All unused earned sick time carries over from year to year; however, an employer is not required to permit an employee to use more than the annual allowed maximum time (paid or unpaid) in a 12-month period.
Does an employee lose accrued hours if laid off, terminated, or transferred to another location?
- Employees separated from employment for 6 months or less maintain all accrued earned sick time prior to the separation, begin accruing additional hours upon reemployment, and may use any accrued hours.
- Employees transferred to another classification or location with the same employer maintain all accrued hours and continue accruing hours.
- Employees separated from employment with the same employer for more than 6 months lose all accrued, unused earned sick time, unless the employer’s policy allows these hours to be maintained.
If an employer chooses to limit use of accrued earned sick leave, may an employer provide the total amount of earned sick time all at once?
- Employers limiting the use of earned sick time to 72 hours or more may provide the total amount of allowed hours at the beginning of the 12-month period (often referred to as “frontloading”).
- Because there is no limit on the amount an employee can accrue and carryover, employers should evaluate employee’s accruals at least annually to ensure that accrued hours are balanced to hours worked and carryover any balance.
When is earned sick time available for use by an eligible employee?
- An employer may require a new employee to wait until the 90th calendar day after commencing employment before using accrued earned sick time. Employees reemployed within the 6-month period are considered to have continued employment for purposes of ESTA and the 90-calendar-daywaiting period. Otherwise, an employee may use earned sick time as it is accrued regardless of the pay period. Once 30 hours have been worked, an employee is entitled to use one hour of earned sick time for use under ESTA.
- Employees may use ESTA for paid work hours.
Does earned sick time have to be taken in 1-hour increments?
- Possibly. The Act provides that earned sick time may be used in the smaller of (i) one-hour increments, or (ii) the smallest increment of time used by the employer’s payroll system for absences of use of other time.
- For example, if an employer uses 1/10th of an hour (six minutes) for tracking attendance/absences, then this would be the incremental use allowed for earned sick time. If an employer uses 1/2 (30 minutes) of an hour for tracking attendance/absences, then this would be the incremental use allowed for earned sick time.
What reasons can an eligible employee use earned sick time?
- An employer shall permit an employee to use the accrued earned sick time for any of the following:
- The employee’s or the employee’s family member’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the employee’s or the employee’s family member’s mental or physical illness, injury, or health condition; or preventative medical care for the employee or the employee’s family member.
- If the employee or the employee’s family member is a victim of domestic violence or sexual assault, for medical care or psychological or other counseling for physical or psychological injury or disability; to obtain services from a victim services organization; to relocate due to domestic violence or sexual assault; to obtain legal services; or to participate in any civil or criminal proceedings related to or resulting from the domestic violence or sexual assault;
- For meetings at a child’s school or place of care related to the child’s health or disability, or the effects of domestic violence or sexual assault on the child; and
- For closure of the employee’s place of business by order of a public official due to a public health emergency; for an employee’s 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; or when it has been determined by the health authorities having jurisdiction or by a health care provider that the employee’s or employee’s family member’s presence in the community would jeopardize the health of others because of the employee’s or family member’s exposure to a communicable disease, regardless of whether the employee or family member has actually contracted the communicable disease.
- An employer shall not require an employee to search for or secure a replacement worker as a condition for using earned sick time.
Who is considered a family member?
- Family members include:
- Biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, or a child to whom the employee stands in loco parentis.
- Biological parent, foster parent, stepparent, or adoptive parent or a legal guardian of an employee or an employee’s spouse or domestic partner or a person who stood in loco parentis when the employee was a minor child.
- Grandparent.
- Grandchild.
- Biological, foster, or adopted sibling.
- Any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.
- “Domestic partner” means an adult in a committed relationship with another adult, including both same-sex and different-sex relationships.
- “Committed relationship” means one in which the employee and another individual share responsibility for a significant measure of each other’s common welfare, such as any relationship between individuals of the same or different sex that is granted legal recognition by a state, political subdivision, or the District of Columbia as a marriage or analogous relationship, including, but not limited to, a civil union.
Do employers have to create a separate “bank” of time for earned sick leave, or can employers use existing paid time off policies?
- No. An employer’s paid time policy may be used so long as it provides at least the same benefits as provided in the ESTA, and may be used for the same purposes, under the same conditions, and accrued at a rate equal to or greater than the rate described in the ESTA.
- For small business employers, employees must be allowed to use paid earned sick time before using unpaid sick time.
What is the required wage rate for earned sick time?
- Earned sick time must be paid at a pay rate equal to the greater of either (i) an employee's regular rate of pay, or (ii) the Michigan minimum wage rate then in effect under MCL 408.934 as amended.
- For any employee whose hourly rate varies depending on work performed, the “normal hourly wage” means the average hourly wage of an employee in the pay period immediately prior to the pay period in which the employee used paid earned sick time.
- Fringe benefits are not included in the calculation of the regular rate of pay.
Does accrued, unused earned sick time need to be paid upon termination of employment?
- No. Employees do not need to be paid for unused accrued earned sick time at separation under the ESTA. However, Public Act 390 of 1978, the Payment of Wages and Fringe Benefit Act, may require payment upon termination pursuant to the employer's written policy or contract.
May an employer pay out unused sick leave annually in lieu of carrying over unused hours to the next year, or at termination without providing the hours at reemployment?
- No. The ESTA does not authorize an employer to pay out unused sick leave. Therefore, all accrued and unused sick leave would be carried over annually, and any balance upon separation would be reinstated if reemployment is within six months.
If an employer “frontloads” sick leave, can an employer recoup leave used more than what would have been accrued as of the date of separation?
- Yes. An employer may determine the amount that would have been accrued as of the date of separation and recoup the value of leave used more than the employee’s adjusted leave balance, provided that this deduction does not reduce the final paycheck to less than minimum wage and the employer obtained a prior written, voluntary agreement for the deduction.
May an employer require an employee to provide notice of and documentation for the use of earned sick time?
- If the need for earned sick time is foreseeable, an employer may require advance notice, not to exceed seven days prior to the date the earned sick time is to begin, of the intention to use the earned sick time.
- If the need for earned sick time is not foreseeable, an employer may require the employee to give notice of the intention as soon as practicable. Deciding what is practicable is dependent on the unique facts and circumstances of each situation, and the parties should approach this requirement with reasonable minds. Notification as soon as practical for unforeseeable leave is also included in the Family Medical and Leave Act (FMLA). For consistency, the consideration under ESTA would be similar.
- For earned sick leave of more than three consecutive days, an employer may require reasonable documentation that the earned sick leave has been used for a permissible purpose. Upon request, the employee must provide this documentation in a timely manner.
- Employer required documentation should not include a description of the illness or details of the violence.
- If an employer requires documentation, the employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation.
- An employer cannot delay commencement of the leave based on a failure to receive documentation.
May an employer ask questions regarding the need for using earned sick leave?
- When using leave under ESTA, employees should provide sufficient information for the employer to determine whether the leave meets the eligible uses under the ESTA.
- If an employer is unsure, they may ask additional questions about the nature of the leave to determine if the leave meets the eligible uses.
How does the ESTA interact with FMLA?
- Like other leave benefits, the ESTA may run concurrently with FMLA approved leave provided that the leave meets the requirements of FMLA. However, if ESTA leave is being used, requirements on advance notice, unforeseeable leave, documentation requirements, will be applied under the ESTA provisions.
- Once ESTA leave is exhausted or not being used for a FMLA covered leave, the FMLA provisions apply.
Does the employer have a duty to maintain the confidentiality of the information provided by the employee?
- Yes. Employers must maintain the confidentiality of health, domestic violence, and sexual assault information about an employee or his or her family member and cannot disclose the information to others without the employee's permission.
What recourse does an employer have for an employee failing to follow established notice and documentation policies?
- Employers should consult with an attorney for guidance concerning the creation of notice and documentation requirements.
- Employers may not retaliate against an employee for engaging in activity protected by the act. Importantly, there is a rebuttable presumption that an employer violated the act if it takes any adverse personnel action against an employee within 90 days after the employee engages in protected activity.
What are employer recordkeeping requirements under the ESTA?
- Employers must retain records that document the hours worked and earned sick time taken by employees for not less than three years. These records shall be available to the Wage and Hour Division with appropriate notice and at a mutually agreeable time.
Does the Earned Sick Time Act contain a notice or posting requirement?
- Yes, employers must provide written notice of an employee’s rights under the ESTA at the time of hiring or on Feb. 21, 2025, whichever is later. Required notice contents can be found at www.michigan.gov/wagehour.
- Employers are also required to display a poster at the place of business containing specific rights listed in the ESTA. The Department shall create the poster and can also be found at www.michigan.gov/wagehour.
What remedy is available to employees or others who believe an employer has violated the act?
- A claim may be filed with the Wage and Hour Division within 3 years of the alleged violation date. An investigation will be completed, and mediation attempted, if appropriate. If a violation is found, the Department may award all appropriate relief including but not limited to payment of all earned sick time improperly withheld, all damages incurred by the complainant as a result of violation of this act, back pay, and reinstatement in the case of job loss.
What penalties are imposed against an employer for violating the act?
- In addition to the civil remedies afforded to affected employees, an employer who fails to provide earned sick time is subject to a $1,000 administrative fine. An employer who willingly violates the posting requirement is subject to a $100 administrative fine for each separate violation.
How do I file a claim for violations of the Earned Sick Time Act?
- Claims may be filed online at www.michigan.gov/wageclaim, in-person at a Wage and Hour Division office (see website for locations); or a form may be requested by calling 855-464-9243 (4MI-WAGE). Claim forms are available in English, Spanish, and Arabic.
What if I have additional questions?
Revised 11/14/24
