Update on Michigan’s Sick Time Act (Small Business Compliance)

Small Business Compliance

• Accrual Method: Employees accrue 1 hour of paid sick time for
  every 30 hours worked, and unused paid sick time rolls over up
  to 72 hours, or 40 for a small business. Employers may limit the
  use of earned sick time to 72 hours, or 40 for a small business,
  in the 12-month period.
• New Hire Waiting Period: If using the accrual method,
  employers may have a policy for new employees hired on or
  after Feb. 21, 2025, requiring these employees to wait up to 120
  days before using accrued sick time. Employees accrue earned
  sick time during this waiting period. If frontloading, hours are
  available for immediate use.
• Small Business Compliance: Small businesses have until Oct.
  1, 2025, to comply with ESTA requirements. Small business is
  defined as an employer having 10 or fewer employees.

How to determine if an employer is a “small business” under the ESTA?

• All employees of the employer within the U.S. or its territories are included for purposes of the total number of employees.
• An employer is considered a “small business” if it employs 10 or fewer
  employees. 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 11 or more employees for 20 or more work weeks in the current or prior calendar year, the employer cannot be a “small business” again until it meets the requirements above.

When does an eligible employee begin to accrue earned sick time?

Small businesses will submit and obey Oct. 1, 2025, or upon commencement of the employee’s employment, whichever is later.

What notice must the employer provide to employees?

Sec. 8. (1) An employer subject to this act shall provide written notice to each employee at the time of hiring or not later than 30 days the effective date of the 2025 amendatory act that amended this section, whichever is later, including, but not limited to, all of the following:

• The amount of earned sick time required to be provided to an employee under this act.
• The employer’s choice of how to calculate a year as that term is defined under section 3.
• The terms under which earned sick time may be used.
• That retaliatory personnel action taken by the employer against an employee for requesting or using earned sick time for which the employee is eligible is prohibited.
• The employee’s right to file a complaint with the department for any violation of this act.
• The notice required under subsection (1) shall be in English, Spanish, and any language that
  is the first language spoken by at least 10% of the employer’s workforce, if the department has translated the notice into that language.

This act does not require an employer to:

• Allow an employee to carry over any unused earned sick time from 1 year to the next year.
• Calculate and track an employee’s accrual of paid earned sick time.
• Pay the employee the value of the employee’s unused accrued paid earned sick time at the end of the year in which the earned sick time was accrued.

Read the February 2025 Update Here (PDF)

The Law: EARNED SICK TIME ACT (EXCERPT) Act 338 of 2018

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