As most firm clients are aware, Michigan’s Earned Sick Time Act was set to go into effect today, February 21, 2024. We’ve received many questions about whether the legislature would step in and make changes to the law, which offers the most generous paid sick leave to workers in the country and threatened the future of many small businesses, before it takes effect. All hope appeared lost until yesterday, when right before the midnight deadline, the legislature came to consensus. But the revised bill didn’t hit the Governor’s desk until after 1:00 a.m. today. As of right now, it’s unclear whether she has signed the bill or what the impact of a late signature might be.
If the law is signed by Governor Whitmer and takes immediate effect, firm clients with 50 or more employees will receive little change in the advice they’ve already been given: the accrual rate is one hour for every 30 hours worked, with a maximum of 72 hours. However, what is and what is not a “small business” under the law, which has been a major point of contention, will affect firm clients with 11-49 employees – they will now not be considered “small businesses” (this is addressed in red, below). The expanded “family member” definition and covered uses all will remain the same. The biggest changes that will affect firm clients are frontloading and rollover rules, as well as the “no-call/no-show” issue (both of which are addressed in bold, below).
If the Governor signs the bill, here is what will change:
• “Small businesses” will be defined as employers with 10 or fewer employees, will have a 40-hour cap, and won’t be subject to the Earned Sick Time Act until October 1, 2025. The version approved by the Michigan Supreme Court that was set to take effect today defined small businesses as having fewer than 50 employees, and unpaid leave was required to be provided.
• New businesses have a long grace period; those that have not hired employees as of today are exempt for three years after hiring their first employee.
• All businesses are expressly allowed to frontload the maximum amount of time that they must allow under the statute (72 hours for businesses with more than 10 employees, and 40 hours for businesses with 10 or fewer employees). Businesses that opt to frontload don’t need to allow employees to rollover earned but unused sick time. For employees who accrue hours as they work to earn them, the rollover rules track the large employer/small business distinction: businesses with more than 10 employees must allow a maximum of 72 hours to rollover, but the number of businesses with 10 or fewer employees is 40 hours.
• There will no longer be a civil cause of action available to employees for alleged violations by employers.
• Employees can’t no-call/no-show. Rather, employers now may take disciplinary action against employees who use paid sick leave for a reason other than a covered use or who fail to give seven days’ notice for foreseeable absences. For unforeseeable absences, employees must give notice “as soon as practicable” or under the employer’s written policy for providing notice for unanticipated sick leave.
These provisions will be effective only if the Governor also signs a revised minimum wage bill, which still increases the minimum wage to $12.48 as of today, but it would reach $15 by 2027. Tipped workers would earn 38% of the minimum hourly wage, which would increase to 50% on February 21, 2031.
We are monitoring the situation and will update firm clients once we know if the above provisions become law and when they will take effect. As always, please don’t hesitate to call us with any questions. We are your partner in achieving compliance and managing risk.
Written by Liza Favaro | Published on February 21, 2025
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Elizabeth “Liza” A. Favaro
Board of Directors |