Publication date: March 11, 2025
Michigan’s sick leave laws just went through a major overhaul, and if you’ve been trying to keep up, you’re not alone. The Earned Sick Time Act (ESTA) has officially replaced the Paid Medical Leave Act (PMLA), and while some changes were expected, others threw us a curveball. From employer size classifications to accrual caps and usage rules, there’s a lot to unpack.
We’ve broken it all down in a side-by-side comparison—what PMLA required, what we thought ESTA would bring, and what actually made it into law. If you’re feeling a little dizzy from all the back and forth, don’t worry—we’ve got you covered.
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| Element | PMLA | What we thought was going to happen with ESTA | HB4002 passed 2/20/25 Public Act 2 of 2025 signed 2/21/25 |
|---|---|---|---|
| Effective date | Replaced by ESTA on 2/21/25 | 2/21/25 | - Small businesses: 10/1/25 - Large businesses: 3/21/25 3-year runway for new businesses to implement: small businesses (10 employees or less) that did not have an employee on or before 2/21/22 do not have to comply until 3 years after the date of the employee first hired. Ex: employee hired 10/24, do not have to comply until 10/27. |
| Size of employers | Applies to employers with 50 or more employees | Small employer: less than 10 | - Small employer: 10 or less - Large employer: more than 10 Includes full time, part time, seasonal and paid interns. Temporary employees hired through an agency are also eligible but should be handled by the agency who employs them (review the contract). Once an employer employs more than 10 employees for 20 or more calendar workweeks in this year or the preceding year, they are no longer a small employer. |
| The covered employers | Exemptions for unions/multi-employer plans and government | Large employer: 10 or more | Some exemptions for unions/multi-employer plans and government Union employees: if a CBA is silent on the topic of paid sick leave, ESTA applies. Otherwise follow CBA until it expires, then ESTA applies. NEW Small businesses: 3-year ramp up (mentioned above) |
| Employees excluded from paid sick leave requirement | - Salaried employees - Seasonal employees - Temporary employees - Independent contractors - Employees working less than 25 hours/week | All private employers with 1 or more employees, unless covered by a collective bargaining agreement No type of employee “in this state” is excluded, except for those employed by the US Government. Everyone the company pays is included. | - US government/railway employees - Employees under 18 - Unpaid trainees or interns - An individual who makes their own schedule and does not have adverse employment action if the employee does not work a minimum number of hours; Note: LEO says this is still unclear but likely a very narrow exemption, like highly compensated employees, board members or elected officials (like a drain commissioner) - Special rules apply to airline flight crews |
| Accrual rate | 1 hour for every 35 hours worked | 1 hour paid sick leave for every 30 hours worked (actual time worked, so things like holiday pay are excluded) | 1 hour paid sick leave for every 30 hours worked Exempt employees are assumed to work 40 hours a week unless they are scheduled for fewer hours. When frontloading, it’s permissible to prorate for partial years and less than full time. |
| Accrual caps | Capped at 40 hours per year to use | No weekly or annual cap on paid sick leave accrual - caps only exist on use | No cap on accrual Caps only exist on use and on carryover |
| Leave increments | 2-hour increments | Non-exempt employees can use leave in the smallest payroll increments. Exempt employees use leave in 1-hour increments. | 1-hour increments or less |
| Rate of pay | Greater of their regular hourly wage or base wage, or the minimum wage, excluding OT, holiday, bonus, commission, piece-rate or gratuity pay | “Normal hourly wage”. For those with varying rates of pay, employers should refer to the pay period immediately before the employee uses EST. | Greater of their regular hourly wage or base wage, or the minimum wage, excluding OT, holiday, bonus, commission, piece-rate or gratuity pay. Shift premium not excluded. |
| Waiting periods | 90-day waiting period | Accrues immediately and can be used immediately; or institute a 90-day waiting period | Accrual: an employer may require a 120-day waiting period before EST can be used. Frontloading: hours are available for immediate use. (Waiting periods may NOT be applied in policies with Frontloading) |
| Alternative to accrual – Frontload | Did not accrue with PMLA. | No frontloading provided explicitly; frontloading employers still need to track accrual and comply with carryover requirements. | Small businesses may provide 40 hours of EST at the beginning of the year for immediate use. For large businesses, this is 72 hours. Part time employees may also be prorated/frontloaded so long as an employee is provided written notice with anticipated work hours, and that notice includes estimated hours they would accrue if the PT employee worked the anticipated hours, AND the employee’s EST hours are trued up in the event they work more than what was anticipated. True up is for hourly; for salaried employees, we can assume a standard PT schedule. |
| Intersection with PTO | PMLA is carved out of PTO – not separate. | Unclear | "Used for the same purposes and under the same conditions” has been stricken. Now PTO can be used for an ESTA purpose “or any other purpose.” If there is an amount that exceeds the amount of time provided for in the act, these rules and conditions need not apply. (i.e. an employer may have different rules for vacation requests) LEO confirms if an employee uses all their time on vacation, there’s no more time. Employers must allow the use of paid time before unpaid time. Employers may NOT automatically apply time to absences. Employees must request the time. |
| Tracking | Track time for 3 years | Accrual: tracking required Frontloaded: tracking is not required; recommend tracking EST usage if frontloading for employer recordkeeping purposes. Employers can assume a 40-hour workweek for exempt employees unless they are scheduled to work less. |
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| Advance notice of absence | Follow normal call in procedure | Foreseeable Absence: require an employee to provide advance notice, not to exceed 7 days before the date leave will begin Unforeseeable Absence: require an employee to give notice as soon as practicable Employees are required to follow procedures for call-ins. Will not automatically terminate for no call, no show. Work with HR to determine if covered by ESTA. | Foreseeable: not to exceed 7 days Unforeseeable: as soon as practicable OR in accordance with the employer’s policy IF: a) Written copy of policy re: notice procedures b) The requirement allows an employee to provide notice after the employee is aware of the need Must allow employees retroactive use of EST if the absence was unforeseeable |
| Paid sick leave usage cap | Limited to 40 hours/year | Small employers: 40 paid, 32 unpaid Large employers: Use up to 72 hours of paid sick leave per year | Small employers: 40 paid, NO UNPAID Large employers: 72 paid Employers may permit additional usage of hours. |
| Carryover of paid sick leave | No carryover | Employees can carry over any unused paid sick leave from prior years. There is no cap on carryover, only use. | Accrual: carryover is required. Frontload: Carryover is no longer required. Small business: carryover is capped at 40 hours. Large business: carryover is capped at 72 hours. |
| Individuals covered for whom employees can use paid sick leave | Spouse, child, parents, grandparents, siblings, and anyone who acted as a parent when the employee was a minor. | ← In addition to this list, also includes: - Domestic partners - Others who are related by blood - “Affinity” in a way equivalent to being a family member | ← In addition to PMLA list, also includes: - Domestic partners - Others who are related by blood - or in a way equivalent to being a family member - the word “affinity” has been removed in latest version |
| Reasons for taking paid sick leave | - Illness of employee or employee’s family member - Medical diagnosis, care, or treatment of the employee or employee’s family member (including preventative care services) - Closure of employee’s workplace due to public health emergency - Care for child whose school or daycare has been closed due to public health emergency - Absences related to domestic violence or sexual assault | ← In addition to this list, also includes: - Meetings at a child’s school or place of care related to the child’s health, disability, or effects of domestic violence or sexual assault on the child - Mental or physical health care or services | ← In addition to PMLA list, also includes: - Meetings at a child’s school or place of care related to the child’s health, disability, or effects of domestic violence or sexual assault on the child - Mental or physical health care or services - No changes from previous version of ESTA |
| Documentation | Can request documentation to support paying paid sick leave. | Request documentation if the employee is absent more than 3 consecutive days. The company must pay for any out-of-pocket expenses incurred to obtain the documentation. Documentation may not require an explanation of the nature of the illness or details of violence. Documentation can be provided by any healthcare provider or can be any type of documentation that seems to support the reason for the leave including police reports. | Request documentation if the employee is absent more than 3 consecutive days. Employees must provide supporting documentation no more than 15 days after request from employer. The company must pay for any out-of-pocket expenses incurred to obtain the documentation. Documentation may not require an explanation of the nature of the illness or details of violence. Documentation can be provided by any healthcare provider or can be any type of documentation that seems to support the reason for the leave including police reports. There is no further guidance on what is included or excluded when calculating the cost (i.e. travel time, mileage, emergency room, etc.). |
| Termination | Do not pay out unused time | Do not pay out unused time | Payout not required, but permissible if company decides to do it. Will not be required to reinstate the time at rehire if it’s paid out at separation. Employers may be able to recoup EST time used from employees who work a partial year and use more than earned. Please contact your HR partner or legal team for more information. |
| Rehire | Employers are not required to reinstate unused paid sick leave upon rehiring. | Must reinstate unused paid sick leave upon rehire if an employee is rehired within 6 months of separation. | Must reinstate unused EST if rehired within 2 months with no waiting period. However, employer is not required to reinstate sick time upon rehire if paid out at the time of separation. |
| Retaliation | No retaliation provisions | Retaliation against employees for exercising their rights under this statute is strictly prohibited. The burden of proof falls onto the employer. As with other retaliation charges, there is a 3-year statute of limitations. In short, if an employee complains that a violation of this statute occurred and the company takes an adverse action (ex. discipline) against that employee within 90-days of the complaint, it will be presumed to be retaliation, and the company has the responsibility to prove it was NOT. The complaint can be made to either an internal (ex. HR) or external (ex. DOL) party. Additionally, the company cannot penalize the use of this protected time off under their attendance policies. For example, “no fault” policies that apply points if the employee has PTO to use for ESTA. | Rebuttable presumption of a violation language is removed. Added: an employer may take adverse personnel action against an employee if the employee uses it for a purpose other than described or violates the notice requirements. A 3-year statute of limitations remains. Retaliatory action is subject to a civil fine not to exceed $1,000 for each violation. |
| Penalizing employees for use or withholding reward | No fault attendance plans are not in compliance with ESTA – we cannot give points for ESTA covered absences. Perfect attendance plans/bonuses are also not compliant when employees are penalized/don’t receive the reward when using ESTA excused time. This likely applies to holiday pay as well; we cannot withhold the benefit of holiday pay for employees using ESTA time. |
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| Required postings or notices | Poster required | Posters and a written notice (in English, Spanish, and any language that is the first language spoken by at least 10% of the company’s workforce) to new hires and current employees are required as long as the poster is provided by LARA. | Updated posters are now available. Employers should note the benefit year on the poster. The employer’s written policy must be presented no later than the date of hire. Existing employees should be notified by 3/23/25. And new employees must be notified in writing when they join the organization. That may be in the offer letter, an attachment to the letter, a handout in orientation, etc. |
| Record retention | 1 year | 3 years; if the organization fails to maintain adequate records, the DOL will assume that the employers violated the Act. | 3 years |
| Penalties for non-compliance | If the company violates this act, payment of the paid medical leave improperly withheld will be requested and penalties may be imposed. A company who fails to provide paid medical leave is subject to a fine of not more than $1,000. | - Payment for sick time - Back pay and benefits - Reinstatement/front pay and benefits - Liquidated damages (2x actual) - Attorney fees (both sides) | In addition to liability for civil remedies, an employer that fails to provide EST is subject to a civil fine of not more than 8 times the employee’s normal hourly wage, damages, reinstatement. Private Right of Action (i.e. the ability of employees to file a lawsuit directly) has been removed. Enforcement will be handled by the Michigan Department of Labor and Economic Opportunity. |
At this point, keeping up with Michigan’s employment laws feels like trying to follow the plot of a never-ending soap opera. But you don’t have to go through it alone! Cooper People Group is here to help you make sense of these changes and ensure your policies are up to date. Whether you need compliance guidance, policy updates, or just a sympathetic ear, we’ve got your back. Need help? Let’s chat.
Other sources – LEO FAQ’s and Grand Rapids Chamber of Commerce
Note: We aren’t attorneys and can’t give legal advice. Please consult with your legal counsel.
