Following the 2019 ballot initiative and Michigan Supreme Court decision in Mothering Justice v. Attorney General, Michigan’s Earned Sick Time Act (“ESTA”) went into effect on February 21, 2025. The ESTA sets out minimum requirements for employer’s paid sick time policies and raises the state’s minimum wage. However, the state legislature passed two bills, H.B. 4002 and S.B. 8, which amend the ESTA’s requirements. The ESTA, as amended, is immediately applicable to all employers with employees working in Michigan, with only one exception: businesses employing ten or fewer employees have until October 1, 2025, to comply specifically with the paid sick time requirements.

Paid Sick Time

As amended by H.B. 4002, the ESTA is immediately effective for all employers with more than ten employees working in Michigan. Those with ten or fewer employees have until October 1, 2025 to comply with the paid sick leave requirements. Employers and employees subject to a collective bargaining agreement must comply with the ESTA only when their current agreement expires.

Benefit Accrual and Frontloading

Employees accrue 1 hour of paid sick time for every 30 hours worked, and employers may cap employees’ use of this time at 72 hours in a year. Leave is calculated in one hour increments or the smallest increment the employer uses to account for the use of other time. Employees taking this sick time off must be paid their normal hourly wage, not including overtime, holiday pay, bonuses, commissions, supplemental pay, piece rate pay, tips, or gratuities. Employees hired after the effective date of the ESTA may be required to wait 120 days after their hire date to use any accrued sick time. And an employer must reinstate any unused sick time if a former employee is rehired within 2 months of separation, unless the value of the sick pay was paid out at the time of termination. Employers must permit employees to carry over at least 72 hours of any unused sick time into the next year, unless the employer frontloads the time each year.

Employers are permitted to frontload the paid sick time, giving employees the full 72 hours of time at the beginning of the year. This eliminates the employer’s obligation to calculate and track accrual throughout the year, and employers that frontload also do not have to allow an employee to carry over any unused time to the next year.

Permissible Uses and Notice before Taking Leave

Employees may take leave for any of the following reasons:

a) The employee’s mental or physical illness, injury or health condition; medical diagnosis, care or treatment of the employee’s mental or physical illness, injury, or health condition; or preventative medical care for the employee.

b) For the employee’s family member’s mental or physical illness, injury, or health condition; medical diagnosis, care or treatment of the employee’s family members’ mental or physical illness, injury or health condition; or preventive medical care for a family member of the employee.

c) 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.

d) 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; or

e) For the 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, whether or not the employee or family member has actually contracted the communicable disease.

If the reason for the leave is foreseeable, the employer can require a maximum of seven days’ notice of the employee’s intent to take leave. If the need for leave is unforeseeable, the employer may only require notice from the employee as soon as practicable. But an employer may create its own policy on requesting sick leave so long as it provides the employee with a written copy of the policy and the policy allows the employee to provide notice after he or she becomes aware of the need for leave.

If an employee is out on ESTA leave for 3 or more consecutive days, an employer is entitled to request documentation verifying that the employee is using the leave for any of the permissible uses above. The employee must provide this documentation within 15 days of the employer’s request, but the employer is obligated to pay for any out-of-pocket expenses incurred by the employee in obtaining the requested documentation.

Retaliation and Remedies

Retaliation for use of ESTA is prohibited, but there is not a rebuttable presumption of retaliation which was present in previous versions of the ESTA. Also, employers may pursue disciplinary actions against employees for using sick time for purposes outside of those permitted by the ESTA, or for failing to abide by the notice requirements. Additionally, there is no private right of action for employees; only an administrative complaint remedy is available. For that, there is a three year statute of limitations.

Notice and Posting Requirements

Employers must provide a written notice to employees within 30 days after the effective date of the ESTA or at the time of hire, whichever is later. This notice must include the following: (1) the amount of time to be provided, (2) how the employer is choosing to calculate a year, (3) the permissible uses for the sick time, (4) the prohibition on retaliation, and (5) the employee’s right to file an administrative complaint.

Employers must also display a poster which contains each of these elements above in English, Spanish, and any language that is the first language of 10% or more of the employer’s workforce.

“Small Businesses” with Ten or Fewer Employees

There are a few differences for employers with ten or fewer employees. First, these employers must comply with the ESTA by October 1, 2025, rather than immediately. Also, these small businesses may limit the use of paid sick time to 40 hours in a year, rather than 75 hours. An employer choosing to frontload hours is only required to frontload 40 hours. And an employer using the accrual method need only permit employees to carry over a maximum of 40 hours of any unused sick time into the next year.

Minimum Wage

As amended by S.B. 8, the ESTA gradually increases the state of Michigan’s minimum wage to $15 by 2027. After that, the minimum wage will rise depending on the rate of inflation. The minimum hourly wage of a tipped employee will gradually rise to 50% of the state’s minimum wage by 2031. Employers must keep records showing compliance with the minimum wage requirements for at least three years after the date of an employee’s last pay period.

Minimum Wage Increases

Below are the scheduled increases to Michigan’s minimum wage per hour:

• February 21, 2025 - $12.48
• January 1, 2026 - $13.73
• January 1, 2027 - $15
• By November 1, 2027, and each year thereafter, the state treasurer will publish the next year’s minimum wage, which is calculated by adjusting for the rate of inflation.

Tipped Employee Wage Increases

Below are the scheduled increases to the minimum wage per hour for tipped employees, such as servers. The figures below represent the percentage of the state’s regular minimum wage. For example, on February 21, 2025, tipped employees must earn a minimum of $4.75 per hour, which is 38% of the state’s $12.48 regular minimum wage.

• February 21, 2025 – 38%
• January 1, 2026 – 40%
• January 1, 2027 – 42%
• January 1, 2028 – 44%
• January 1, 2029 – 46%
• January 1, 2030 – 48%
• January 1, 2031 – 50%

Take Action

Employers with more than ten employees are currently subject to the ESTA. They must satisfy all paid sick time and minimum wage requirements. These employers should also immediately ensure they are complying with the notice and posting requirements.

Employers with ten or fewer employees have until October 1, 2025 to comply with the ESTA’s paid sick time requirements, but they are subject to the $12.48 minimum wage today.