Michigan’s New Sick Leave Law: What Small Businesses Need to Know Before October 1, 2025

If you're a small business owner in Michigan, there’s a big deadline looming: October 1, 2025. That’s when the updated Earned Sick Time Act (ESTA) officially kicks in for businesses with 10 or fewer employees. If you haven’t started preparing, don’t worry, APS is here to help you make sense of it all.

What Is the Earned Sick Time Act?

The Earned Sick Time Act is a Michigan law that requires employers to provide paid sick leave to their employees. It's designed to ensure workers have time off when they or their family members are sick, without risking their paycheck or job security.If you're a larger employer (11+ employees), ESTA already went into effect for you back on February 21, 2025. But for small businesses, the compliance date is just around the corner.

Who Needs to Comply (And When)?

Here’s how it breaks down:

• You must comply by October 1, 2025 if you have 10 or fewer employees (including part-time, temps, interns, and seasonal staff).

• You should already be compliant if you have 11 or more employees, the law took effect for you on February 21, 2025.

• New businesses formed after February 21, 2022, may qualify for a 3-year delay in compliance, depending on hiring history.

What the Law Requires

Starting October 1, 2025, small businesses must:

• Provide 1 hour of paid sick leave for every 30 hours worked

• Allow employees to use up to 40 hours of paid sick leave per year

• Offer additional unpaid sick time beyond that, if needed

• Decide whether to accrue hours gradually or frontload all 40 hours at the start of the year

• Carry over unused hours (if using accrual), up to 40 hours

• Set a waiting period of up to 120 days before new hires can use their time (APS uses 30 days)

• Track accrual and usage unless you're frontloading

• Distribute employee notices (this was due March 23, 2025, if you missed it, do it ASAP)

• Post the official ESTA workplace notice where employees can see it

Common Pitfalls to Avoid

If you’re not familiar with compliance laws, it’s easy to miss details. Here are some key watchouts:

• Your employee count includes temps and part-timers, don’t overlook them.

• If you hit 11+ employees for 20+ weeks in a calendar year, you’ll be bumped to the larger employer category.

• Your sick leave policy must include clear guidance on documentation for absences longer than 3 consecutive days.

How APS Can Help

Navigating new labor laws can be overwhelming, but you don’t have to do it alone.APS is already helping businesses across Michigan prepare for ESTA compliance. Here’s how we can help:

• Create or review your sick leave policy

• Help you distribute the required notices to your employees

• Ensure your payroll system is tracking hours accurately

• Offer one-on-one support for tricky situations

Whether you have questions about eligibility, tracking, frontloading, or documentation, we’re just a call away.

Let’s Get You Compliant

Don’t wait until October 1 sneaks up on you. Get ahead of the game now.