Michigan is gearing up for a significant shift in workplace rights with the upcoming implementation of the Earned Sick Time Act (ESTA), set to replace the current Paid Medical Leave Act (PMLA) on February 21, 2025. This new law represents a more employee-focused approach, offering broader and more generous paid medical leave benefits. Here’s a breakdown of what this means for both employers and employees.
Key Changes Under the Earned Sick Time Act
The ESTA introduces several notable updates compared to the PMLA, making Michigan’s paid medical leave rights more expansive than in many other states. Here are some of the major changes:
- Broader Coverage:
- ESTA applies to all employers with at least one employee in Michigan, excluding only employees of the U.S. government.
- Employers with fewer than 10 employees qualify as “small businesses” but must still meet many paid medical leave standards.
- Improved Eligibility:
- Full-time, part-time, and temporary employees (including those from staffing agencies) are eligible.
- Accrual begins on the later of February 21, 2025, or the start of employment.
- Faster Accrual: Employees earn 1 hour of paid medical leave for every 30 hours worked, with no cap on accrual.
- Annual Usage Cap:
- Employees of companies with more than 10 employees must be permitted to use up at minimum 72 hours of paid medical leave annually.
- Small business employees must be permitted to use a minimum of 40 hours of paid medical leave, as well as an additional 32 hours of unpaid leave.
- Year-End Carryover: Employees can carry over all unused paid medical leave into the next year, ensuring no loss of accrued hours. This is a major change to many employers’ “use-it-or-lose-it” paid time off policies.
- Expanded Reasons for Use: ESTA broadens the scope of eligible paid medical leave reasons and the definition of covered family members.
Guidance from the Department of Labor and Economic Opportunity
To help employers and employees prepare, the Michigan Department of Labor and Economic Opportunity has released a set of FAQs, along with a model poster and informational brochure. These resources provide clarity on:
- Notice and Documentation:
- Employers may require up to 7 days’ notice for paid medical leave that is foreseeable.
- Employers cannot require advance notice for “unforeseeable” leave but may require notice as soon as practicable.
- Employers can only request documentation substantiating the need for leave after 3 consecutive days of absence and these requests must not delay leave commencement. Note that there are certain limitations on what types of information may be requested from an employee in these circumstances, so it’s important to review the requirements of the ESTA closely before requesting employee documentation to avoid violating the law.
- Rate of Pay:
- Paid medical leave must be paid at the greater of the employee’s regular rate or Michigan’s minimum wage.
- Incremental Use:
- If the employer does not have a written policy specifying increments for using paid medical leave, an employee must be permitted to take leave in the lesser of 1-hour increments or the smallest unit of time that is tracked for payroll purposes.
- Posting and Notification:
- Employers must display ESTA posters in English, Spanish, and any other language spoken by at least 10% of their workforce (if translations are available).
- New hires must receive a notice of rights upon hiring, and current employees must be informed by February 21, 2025.
Next Steps for Employers
With the ESTA’s effective date approaching, employers should act now to ensure compliance.
Here’s what companies can do:
- Update Policies: Review and revise existing paid medical leave or PTO policies to align with ESTA requirements.
- Employee Training: Educate managers, HR teams, and employees on the new standards and their rights under the ESTA.
- Monitor Updates: Keep an eye on the Department’s website for additional guidance or rulemaking.
What This Means for Employees
Employees will be entitled to:
- Greater access to paid medical leave.
- More reasons to use paid medical leave – both individual and family-based
- Enhanced job protections for utilizing paid medical leave, including anti-retaliation measures.
Looking Ahead
As Michigan implements robust paid medical leave laws, employers must take proactive steps to ensure compliance and foster a smooth transition for their workforce. By staying informed and leveraging resources like the Michigan Department of Labor’s website or consulting legal experts, businesses can effectively adapt their policies to meet legal requirements while supporting their employees.
Need Help or Have Questions?
If you want to learn more or need assistance in ensuring your policies comply with ESTA, contact Jennifer L. Gross at [email protected], or reach out to the attorneys at Cooper & Riesterer, PLC.
