Earned Sick Time Action Center

ESTA Fix Passes Legislature

Shortly before the Earned Sick Time Act (ESTA) took effect at 12:01 a.m. February 21, 2025, the Legislature passed a bill to address many of the most challenging issues of the law and establish a different requirement for small businesses. That legislation, House Bill 4002 (Representative Jay DeBoyer, R-Clay), has been signed by the Governor and become Public Act 2 of 2025.

Some of the most impactful elements of PA 2 of 2025 of include:

• Employers with 11 or more employees must provide 72 hours of paid sick leave.
• Employers with 10 or fewer employees must provide 40 hours of paid sick leave.
• Employers may frontload paid sick leave, and in doing so, avoid tracking employee accrual and any carryover of unused hours at the end of a benefit year.
• Employers may use one single bank of PTO time as long as it can be used for ESTA reasons
• Unpaid employees, trainees, interns, variable hour workers, independent contractors and minors are not eligible for the mandated paid sick leave.
• Carryover from year to year is capped at 40 hours for small employers and 72 hours for all others, unless the employer frontloads the hours at the start of a benefit year.
• Overtime, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, tips or gratuities do not have to be considered when calculating an employee’s ESTA pay.
• Employers may require notice prior to taking sick leave in accordance with their written policy even in unforeseen situations. Employers may take adverse personnel actions for those who violate this notification requirement.
• ESTA may be used in 1-hour increments or the smallest increment that employer uses for absences or use of other time.
• The private right of action and rebuttable presumption against employers have been eliminated. Employers have 30 days following the effective date of the Act to provide notice to employees.

MMA is working to update the ESTA Tool Kit with the new requirements.

Watch to Learn More

Background

The Michigan Department of Labor and Economic Opportunity (LEO) has been reviewing the decision rendered by the Michigan Supreme Court in Mothering Justice v. Attorney General (a.k.a. paid sick leave case). As a result of that decision, major changes have been made to the state’s earned sick time law. Watch this on-demand video for historic background that led to ESTA.

Resources

• Frequently Asked Questions (Michigan Department of Labor and Economic Opportunity)
• House Bill 4002
• Summary of amendments presented in HB 4002
• Take 2: Michigan’s (Hopefully) Final Paid Sick Leave Law (Honigman)