Earned Sick Time Act – ESTA
Some employers may be familiar with Michigan’s retired PMLA (Paid Medical Leave Act), which was in effect from 2019 to 2025. The PMLA required Michigan employers with 50 or more employees to provide certain employees with paid medical leave for personal or family health needs. However, a new sick time policy, the ESTA (Earned Sick Time Act), took effect on February 21, 2025, replacing the PMLA and reshaping the landscape of paid sick leave in Michigan. Unlike the PMLA, the ESTA requires all employers—regardless of size—to provide nearly all Michigan employees, including part-time and temporary workers, with earned paid sick time.
How Does This Affect My Business?
Small Businesses (10 or Fewer Employees):
Employers with 10 or fewer employees must provide at least 40 hours of paid earned sick time per year. They can choose between an accrual method—one hour for every 30 hours worked—or frontloading the full 40 hours at the beginning of the year for immediate use. Although the ESTA took effect in February, small businesses are not required to comply with its sick time requirements until October 1, 2025.
Large Businesses (11 or More Employees):
Employers with 11 or more employees must provide at least 72 hours of paid earned sick time per year. Like small businesses, they can choose between an accrual method (one hour for every 30 hours worked) or frontloading the full amount at the start of the year for immediate use.
Key Provisions of the Earned Sick Time Act
Using Paid Earned Sick Time:
Accrued or frontloaded sick time can be used for various reasons affecting the employee or a family member, including:
- Mental or physical illness, injury, or health conditions
- Domestic violence situations
- Meetings at school related to a child’s health or disability
Carryover and Caps:
Unused paid earned sick time carries over from year to year unless frontloaded. However, employers are not required to allow usage or carryover beyond the annual cap—40 hours for small businesses and 72 hours for large businesses.
Waiting Period for New Employees:
New employees begin accruing paid earned sick time immediately. However, employers may require new hires (after the ESTA’s effective date) to wait up to 120 days before using their earned sick time unless the time is frontloaded, in which case it is available for immediate use.
I Already Offer PTO—Can I Ignore This?
No. Even if an employer provides paid time off (PTO) that meets or exceeds the ESTA’s requirements, they must still have a policy that complies with the law. Employers must ensure that PTO policies align with ESTA guidelines if employees use PTO for reasons covered under the Act.
Employer Responsibilities:
In addition to record-keeping and poster requirements, employers must provide written notice to employees about their rights under the Act, including accrual rates and permissible uses, no later than March 23, 2025.
As a PEO, UAP has the knowledge and resources to help businesses stay compliant with new and upcoming laws. Call UAP today to learn more about how we can assist you!
