Michigan's Earned Sick Time Act: Is Your Business Still Compliant?

If you're a Michigan employer and you haven't revisited your sick leave policy in the last year, now is a good time to take a second look. The Earned Sick Time Act (ESTA) replaced Michigan's old Paid Medical Leave Act (PMLA) in early 2025, and it brought some significant changes that affect employers of every size.

What Changed and When

The Michigan Legislature passed amendments to the Earned Sick Time Act that took effect on February 21, 2025. The biggest shift? While the old PMLA applied only to employers with 50 or more employees, ESTA extends to all employers with at least one employee. Existing small businesses with 10 or fewer employees had until October 1, 2025 to implement the requirements. That deadline has passed, which means every Michigan employer should already be operating under this law.

How Accrual Works

Under ESTA, employees accrue one hour of sick time for every 30 hours worked. Large businesses with 11 or more employees must allow employees to take up to 72 hours of paid sick leave each year. Small businesses with 10 or fewer employees must allow up to 40 hours per year.

Employers have two options for providing this time: track accrual as hours are worked, or frontload the full amount at the start of the benefit year. New employees can be required to wait up to 120 calendar days after their start date before using accrued hours.

Who's Covered

The law applies to all employees whose physical work location is in Michigan, whether salaried or hourly, full-time or part-time, and seasonal or year-round. Part-time and temporary staff are included. The primary exemptions are employees of the federal government and individuals who set their own hours without any minimum requirement.

What It Can Be Used For

Sick time under ESTA covers more than just a cold or flu. Approved uses include the employee's own physical or mental illness, preventive care, and medical appointments, as well as the same needs for a family member. It also covers meetings at a child's school related to their health, and situations involving domestic violence or sexual assault. Employers cannot require an employee to find their own shift replacement as a condition of using earned sick time. Employers can require reasonable documentation only after an employee has missed more than three consecutive days.

Can You Use Your Existing PTO Policy?

Possibly, but it needs to be reviewed. ESTA allows employers to rely on existing PTO policies if they are at least as generous as the law requires and allow time off for all ESTA-covered purposes. A PTO policy that limits use to physical illness, for example, likely falls short.

Posting and Notice Requirements

This is where a lot of employers get tripped up. Employers are required to display the official ESTA poster from the Michigan Department of Labor in a conspicuous, accessible location. The poster must be displayed in English, Spanish, and any other language spoken as a first language by at least 10% of the workforce, provided the state has issued a translation.

Beyond the poster, employers must also provide workers with a written summary of their ESTA rights, explaining how sick time accrues, when it can be used, the measurement year, protections against retaliation, and how to file a complaint.

What Happens If You Don't Comply

The penalties are real. Employers who fail to provide earned sick time face a civil penalty equal to eight times an employee's normal hourly wage, a $1,000 administrative fine for retaliatory action against an employee, and a fine of up to $100 per violation for willfully failing to meet posting requirements. Employees have up to three years to file a claim, and if an employer fails to keep proper records, there is a presumption that a violation occurred.

Your Compliance Checklist

• Is your employee handbook updated with ESTA-compliant sick leave language?

• Does your current PTO or sick leave policy meet the minimum hours and cover all required uses?

• Is the required state poster displayed and up to date?

• Have you provided written notice of ESTA rights to your employees?

• Is your payroll or HR system properly tracking accruals and balances?

• Are your managers trained on the anti-retaliation rules?

If any of those answers are uncertain, it's worth taking a closer look before a complaint prompts you to. ESTA compliance isn't a one-time fix: it's an ongoing part of doing business in Michigan.

Sources: Michigan Department of Labor and Economic Opportunity | Paychex | Jackson Lewis | Honigman Law