ESTA FAQs

The Michigan Supreme Court ruled that the "adopt and amend” enaction of our current minimum wage and paid medical leave was unconstitutional. This means that PA 337 and PA 338, the original ballot initiatives of 2018, will take effect February 21, 2025. The Earned Sick Time Act covers all employers.

Employers that have 10 employees or less must provide 40 hours of paid time off per year while employers with 11 employees or more must provide 72 hours of paid earned sick leave per year.

The rate of pay for this benefit must be equivalent to the normal hourly wage for that employee. Exempt employees must be paid at their normal salaried rate for time off under this law.

Below are answers to the most frequently asked questions ASE has received around ESTA.

FAQs

Required Posters and Notices

Employers have 30 days from Feb. 21, 2025, to post posters consistent with the amended ESTA and provide written notice to employees as required by the ESTA.

The Department of Labor and Economic Opportunity is required to create and make available to employers notices and posters for employers’ use in complying with the amended ESTA. The Department is required to provide the notices and posters in English, Spanish, and any other language deemed appropriate by the Department. 

Coverage

Each employer must provide earned sick time to each of their employees in the state of Michigan.

Are any employees exempt from coverage of ESTA?

• Yes, certain types of employees are exempt from coverage under the Earned Sick Time Act (ESTA). According to the source, the definition of "employee" does not include the following:

• An individual employed by the United States government.
• An individual who works in accordance with a policy of an employer if both of the following conditions are met:
  • The policy allows the individual to schedule the individual's own working hours.
  • The policy prohibits the employer from taking adverse personnel action against the individual if the individual does not schedule a minimum number of working hours.
• An unpaid trainee or unpaid intern. To be considered an "unpaid trainee or unpaid intern" the individual must receive training from an employer that meets certain requirements, including that the training is similar to that provided in a vocational school.
• In addition to the training being similar to that of a vocational school, the requirements for an "unpaid trainee or unpaid intern" are:

• The training is for the benefit of the individual
• The individual does not displace the employer's employees but works under close supervision

• The employer receives no immediate advantage from the activities of the individual, and on occasion, the employer's operations may be impeded by the individual

• The individual is not entitled to a job at the conclusion of the training

• The employer and the individual understand that the individual is not entitled to wages for time spent in training

What employers are covered by ESTA?

The Act applies to all employers, regardless of size. “Employer” is defined as “any person, firm, business, educational institution, corporation, limited liability company, government entity, or other entity that employs one or more individuals, except that employer does not include the United States government. There are different requirements for accrual and paid leave for employers with 1-10 employees and those with 11 and above. {nonprofit agency has been deemed exempt but there is no definition of this term at this time. Non-profits should check with their general counsel}

How does an employer determine if they meet the 11-employee threshold? 

1. In determining the number of individuals performing work for compensation during a given week, all individuals performing work for compensation on a full-time, part-time, or temporary basis must be counted, including individuals made available to work through the services of a temporary services or staffing agency or similar entity. 
2. An employer meets the 11-employee threshold if it employs 11 or more employees in 20 or more workweeks in the current or previous calendar year. The 20 workweeks need not be consecutive. This includes full-time, part-time, and temporary employees including those provided through a temporary service or staffing agency or similar entity.
3. Once an employer meets the 11 or more-employee threshold, the employer will remain covered until the remainder of the current and following calendar year or no longer meets the definitions in the first bullet.

What may an employee take earned sick time off for? 

An employee can use earned sick time for:

• 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.
• Preventative medical care for the employee.
• A family member's mental or physical illness, injury, or health condition.
• Medical diagnosis, care, or treatment of the employee's family member's mental or physical illness, injury, or health condition.
• Preventative medical care for the family members of the employee.
• 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.
• 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.
• For 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.

Does ESTA apply to minors? 

No, an individual who is employed in accordance with the youth employment standards act, 1978 PA 90, MCL 409.101 to 409.124 is exempt from coverage under the Earned Sick Time Act (ESTA)

Does ESTA apply to contingent or seasonal employees? 

Yes, when determining the number of individuals performing work for compensation during a given week for the purpose of whether an employer is a small business, all individuals performing work for compensation on a full-time, part-time, or temporary basis must be counted.

As an alternative to the accrual of paid earned sick time, an employer that employs a part-time employee may provide paid earned sick time to the part-time employee at the beginning of a year for immediate use if certain requirements are met.

An employer must provide the part-time employee with a written notice of how many hours the part-time employee is expected to work for a year at the time of hire. The amount of earned sick time provided to the part-time employee at the beginning of the year must be, at a minimum, proportional to the earned sick time that the part-time employee would accrue if the part-time employee worked all of the hours expected as provided in the written notice. If the part-time employee works more hours than is expected as provided in the written notice, the employer must provide the part-time employee with additional earned sick time in accordance with the accrual requirements under this section.

The law does not define "contingent" or "seasonal" employees. It is possible that "contingent" employees would be employed on a "temporary basis" and thus would be counted on when determining whether an employer is a small business. It is also possible that "seasonal" employees would be considered "part-time" employees.

What language do we need with a staffing agency, so the agency is solely responsible for ESTA? 

To ensure the temporary agency is solely responsible for ESTA, the language in the temporary services agreement should ensure that the temporary employees are considered employees of the temporary agency and not of your company.

Do temporary employees from a staffing agency count as employees for counting for ESTA purposes?

Yes. When determining if a business is a small business, all individuals performing work for compensation on a full-time, part-time, or temporary basis must be counted, including individuals made available to work through the services of a temporary services or staffing agency or similar entity.

Does ESTA cover Collective Bargaining Agreements (CBAs)?

The law stipulates that if an employer's employees are covered by a collective bargaining agreement in effect on the effective date of this act and the collective bargaining agreement conflicts with this act, this act applies beginning on the stated expiration date in the collective bargaining agreement.

The law also states that if an employer's employee is covered by a contract, not including an employer policy signed by the employee, and specific requirements are satisfied, this act applies beginning on the stated expiration date in the contract. The requirements include:

• The employer and employee signed the contract on or before December 31, 2024.
• The contract is effective for not longer than 3 years.
• The contract conflicts with this act.
• The employer notifies the department of the contract.

You should seek legal counsel to draft language that ensures compliance with ESTA and accurately reflects the intended relationship between your company, the temporary agency, and the temporary employees.

Multiemployer Plan:

• An employer is in compliance with this section if the employer is a signatory to a collective bargaining agreement that requires contributions to a multiemployer plan as that term is defined in section 3 of subtitle A of title I of the employee retirement income security act of 1974, 29 USC 1002, that may be used under the same conditions as provided for under this act, in an amount equal to or greater than what is required to be provided under this act, and that accrues at a rate equal to or greater than the rate described in subsections (2) and (3).
• This act does not require a multiemployer plan that provides benefits in accordance with this act to pay accrued paid sick leave benefits if an employer does not remit required contributions to the plan.

If an employer’s offices are out of state, but the employee is working remotely in MI, does the employer have to provide this benefit to that employee?

Yes. If the employee is working in Michigan, they have to be provided with ESTA benefits.

Do we count all employees working for the company or only those working in Michigan to determine the type of coverage for employees? 

This is yet to be determined. Our opinion is, when determining the number of individuals performing work for compensation during a given week, all individuals performing work for compensation on a full-time, part-time, or temporary basis must be counted. This includes individuals made available to work through the services of a temporary services or staffing agency or similar entity.

Do we need to extend ESTA to remote employees outside Michigan who come to the home office in Michigan around four times per year?  

ESTA stipulates that each employer must provide earned sick time to each of the employer's employees in this state. Based on this, it would appear that you would not have to extend ESTA to remote employees outside of Michigan.

Is ESTA allowed to be used compulsory, like PMLA?  

ESTA stipulates the conditions under which earned sick time may be used. (see above section) ESTA also states that an employer must allow an employee to use earned sick time accrued or provided for specific purposes. ESTA does not require an employer to provide earned sick time for any purposes other than those described in the Act.

Covered Family Members

• A biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, or a child to whom the employee stands in loco parentis.
• A biological parent, foster parent, stepparent, or adoptive parent or a legal guardian of an employee or an employee's spouse or domestic partner or a person who stood in loco parentis when the employee was a minor child.
• An individual to whom the employee is legally married under the laws of any state or a domestic partner.
• A grandparent or grandchild.
• A biological, foster, or adopted sibling.
• Any other individual related by blood or affinity to the employee.
• An individual whose close association with the employee is the equivalent of a family relationship.

Benefit

Under the Earned Sick Time Act (ESTA), an employer must provide earned sick time to each of the employer's employees in the state of Michigan.

The specific benefits and requirements vary based on the employer's size. To determine the number of employees, all individuals performing work for compensation on a full-time, part-time, or temporary basis must be counted. This includes individuals made available to work through a temporary or staffing agency.

A "small business" is defined as one that employs 10 or fewer individuals. For Small Businesses:

• Employees must accrue a minimum of 1 hour of paid earned sick time for every 30 hours worked, not including hours used as paid time off.
• An employee may not be entitled to use more than 40 hours of paid earned sick time in a year unless the employer selects a higher limit.
• If an employee accrues more than 40 hours of earned sick time in a calendar year, unless the employer selects a higher limit.
• Employees must be entitled to use paid earned sick time before using unpaid earned sick time.
• As an alternative to accrual, a small business may provide an employee with not less than 40 hours of paid earned sick time at the beginning of a year (frontloading) for immediate use.
• Small businesses do not have to allow an employee to use more than 40 hours of paid earned sick time per year.
• Small businesses do not have to allow employees to carry over any unused earned sick time from one year to the next if they provide paid earned sick time at the beginning of the year (frontloading).

For Employers That Are Not Small Businesses: (11 or more employees)

• Employees must accrue a minimum of 1 hour of paid earned sick time for every 30 hours worked, not including hours used as paid time off.
• An employee may not be entitled to use more than 72 hours of paid earned sick time in a year, unless the employer selects a higher limit.
• As an alternative to accrual, an employer may provide an employee with not less than 72 hours of paid earned sick time at the beginning of a year (frontloading) for immediate use.
• Employers are not required to allow an employee to use more than 72 hours of paid earned sick time in a single year. (Use it or Lose It)

Alternative to Accrual for Part-Time Employees:

• As an alternative to the accrual of paid earned sick time, an employer that employs a part-time employee may provide paid earned sick time to the part-time employee at the beginning of a year for immediate use if certain requirements are met.
• The employer provides the part-time employee with written notice of how many hours the part-time employee is expected to work for a year at the time of hire.
• The amount of earned sick time provided to the part-time employee at the beginning of the year (frontloading) is, at a minimum, proportional to the earned sick time that the part-time employee would accrue if the part-time employee worked all the hours expected as provided in the written notice.
• If the part-time employee works more hours than is expected as provided in the written notice, the employer must provide the part-time employee with additional earned sick time in accordance with the accrual requirements under this section.

General Requirements for All Employers:

• Accrual Start Date: Earned sick time begins to accrue on the effective date of the law or upon commencement of the employee's employment, whichever is later.
• Usage Delay: New hires may be required to wait until the 120th calendar day after commencing employment before using accrued earned sick time.
• Carryover: If the employer is using the accrual method, earned sick time carries over from year to year, but employers are not required to allow an employee to use more than the annual limits in a single year. An employer must allow an employee to carry over all the employee's unused accrued paid earned sick time not to exceed 72 hours. If the employer is a small business, accrual will not exceed 40 hours. In either case an employer could select a higher limit.
• Exempt Employees: For employees exempt from overtime requirements, it is assumed they work 40 hours in each workweek unless their normal workweek is less than 40 hours, in which case earned sick time accrues based upon that normal workweek.
• Pay Rate: An employer must pay each employee using paid sick time earned at a pay rate equal to the greater of either the normal hourly wage or base wage for that employee or the minimum wage.

• For purposes of using a one bucket system "paid leave" includes but is not limited to paid ESTA time, vacation days, personal days, and other paid time off.

Accrual and Use of Benefit

What are the accrual requirements under ESTA?

ESTA states employers must accrue 1 hour for every 30 hours worked.

How much can employees accrue yearly?

All employees – full-time, part-time, and seasonal – are entitled to accrue seventy-two (72) hours of paid leave per calendar year.  For employers with 10 or fewer employees, employers are required to provide forty (40) hours of paid leave per year.

How does an employee earn 72 hours for a full year when a full year under ESTA is 69.3 hours? 

Accrual would continue into the next year. If the 72 hours are accumulated the employee is limited to using the 72 hours. Alternatively, if the employee does not use any ESTA PTO, they would reach the 72-hour cap shortly into the following year but could continue to accrue PTO but would only be able to use up to 72 hours in a year. Employers can provide a full 72 hours (frontloaded) per year to comply with the law.

When does ESTA accrual start?

Earned sick time begin to accrue on the effective date of the law or upon commencement of the employee's employment, whichever is later. The effective date of the 2025 amendatory act is February 21, 2025.

New hires can be required to wait until 120 days of employment before they can use accrued paid sick time, which could potentially benefit seasonal employers.  (This may be an issue for clarification by the Department of Labor and Economic Opportunity, which under the amendment will be responsible for all enforcement of the law.)

We have a 90-day introductory period where employees can accumulate time but are not allowed to use it.  Is this legal under ESTA? 

The amendment to ESTA now allows employers to have a policy requiring new employees to wait until the 120th calendar day after commencing employment to begin using their time, but they must begin accruing upon hire.

Exempt salary employees will be presumed to work 40 hours each week unless their normal work week is usually less than 40. What if they are normally scheduled to work less than 40 hours per week?

If the workweek is 37.5 hours or 35 hours, it should be documented.  Accrual will still follow the 30 hours for 1 hour (see above).

What if the exempt employee works more than forty (40) hours in a week?

The employer must track the actual hours worked when calculating the accrual of ESTA sick time off. An employee who is exempt from overtime under the FLSA is “assumed to work 40 hours in each workweek, unless the employee’s normal work week is less than 40 hours, in which case earned sick time accrues based upon that normal workweek.”

How do we track exempt employees under ESTA when they do not clock in or out? 

Employers would assume the employee worked a standard work week of 40 hours. If the hours vary, the employer may require an employee to turn in a time sheet to track actual hours worked.

Employers ONLY have to count actual worked hours towards accrued ESTA paid time. Employers do not have to count vacation time or any other paid time off as qualifying hours for ESTA accrual.  But if an employer wanted to count other paid time off, they can.  Correct?

Correct. An employer may choose to allow time to accrue when an employee is on vacation/other leave, but the ESTA does not seem to require it. The Act says an eligible employee must accrue paid medical leave at a rate of at least one (1) hour of leave for every 30 hours worked up to 72 hours per benefit year. In other words, if they aren’t working because of vacation or a holiday, they do not need to accrue the time.  It is up to the employer.

Does this mean overtime hours must be counted toward the accrual of benefits?

Yes. If you use the accrual method.

Can an employer decrease the amount of vacation time an employee is eligible for and move it to the ESTA paid time off bucket instead or provide more paid time off from the company budget to comply with giving 72 hours of paid ESTA time?

Yes. If using frontloading method, it must be in a one bucket PTO system.

Would the unlimited sick time carryover be in addition to the 72 hours per year or a maximum of 72 hours per year? 

Under the accrual method ESTA leave carryover is unlimited but usage is limited to seventy-two (72) hours a year as follows: in companies with eleven (11) and over employment, accrual of paid sick time would be up to seventy-two (72) hours of paid time off per year.  In companies with ten (10) or fewer employees, employees are entitled to just forty (40) hours of paid leave.

Do we need a separate ESTA bank, or can we use a combination of PTO, Vacation, and/or Sick time to comply with the law?

ESTA allows any paid time to fulfill the requirements so long as the time can be used for the purposes permitted by the ESTA. Vacation, personal time, and an all-purpose PTO bank can all count towards the 72-hour requirement for larger employers or the 40-hour requirement for smaller employers.  But the law is unclear.  In addition, the ESTA time must carry over year to year.

While ESTA provides the employer is in compliance “if the employer provides any paid leave, that may be used for the same purposes and under the same conditions provided in this act and that is accrued in total at a rate equal to or greater than the rate described….”, the “under the same conditions” language is problematic.

Employers are advised to carefully study what might need to change with their existing paid time off (PTO) policies if wishing to proceed with combining ESTA leave with paid time off (PTO) or other banks of leave time. It would seem the ESTA limits the types of restrictions employers can put on all leave time when choosing this option (e.g., would prohibit employers from requiring advance notice, mandating that vacation/personal time be used in half day/full day requirements, etc.).

Do you need to have an ESTA policy if your PTO policy is generous enough and the company meets the requirements for sick time in their PTO policy?  Or do we need to create a new ESTA bank outside of our PTO policy? 

If an employer provides PTO consistent with and in compliance with ESTA, an existing PTO policy and benefit would meet the law’s requirements. However, you do need to track and accrue ESTA regardless.

In what increment of use can an employee receive paid sick leave?

ESTA allows for use in 1-hour increments.

When is a new employee eligible for leave under ESTA?

Unless the employer’s policy states otherwise, an employee may take ESTA leave once time is earned.  ESTA does allow employers to have a policy requiring new employees to wait until the 120th calendar date after commencing employment to begin using their time, but they must begin accruing upon hire.

What is the benefit year for accrual of ESTA paid time off?

A “year” shall mean a regular twelve (12) month period as determined by the employer.

Assuming February 21, 2025, start date, does the accrual start then or is it retroactive? 

It is unclear at this time.  Employers have the flexibility to determine the definition of a year, as the law says a “year shall mean a regular and consecutive twelve-month period, as determined by an employer.”  Therefore, assuming no changes to ESTA before February 21, 2025, an employer could start the accrual basis from the beginning of 2025.

Does an employer have to pay out unused accrued sick time at the end of the year or when an employee terminates?

No.

Can you limit ESTA to a maximum of 72 hours per year without carryover and ensure that any unused hours are not paid out at the end of the year?

The law caps ESTA to usage of 72 hours per year under both the accrual and frontloading methods. Employers are not required to pay unused ESTA time upon termination of employment.

Can an employer require an employee to use all PTO and ESTA time before requesting unpaid leave?

Employees would be entitled to use accrued sick time without penalty or interference. If the employee has earned sick time available under ESTA, they could choose to use it for covered reasons, but the employer could not mandate that they exhaust other PTO before using their ESTA-protected sick time.

Can ESTA be required to be used when an ESTA situation arises? 

Yes.

Accrual Method Versus Front Loading Method 

NOTE: ESTA NOW ADDRESSES FRONT LOADING OF BENEFITS AS THE MICHIGAN PAID MEDICAL LEAVE ACT DOES.

If a company keeps vacation time and sick time separate, is it true the company cannot front load ESTA paid hours?

Front loading of benefits is now addressed in ESTA. Paid Time Off (PTO) or sick time has to be the same terms as ESTA, otherwise an employer will need establish a separate bank for that.

If we decide not to front load hours and do a regular weekly accrual, can we still allow employees to use up to 72 hours in a 12-month period before they have officially accrued it?

Yes, you can.  The question of the negative bank is unclear at this time.

If we front load the 72 hours at the beginning of the year and the employee uses all of it, is there any employer liability for the unavailability of time later in the year? 

Front loading of PTO for ESTA is permitted under the amended law.  That said, if the time taken is ESTA covered and as long as ESTA’s other requirements are met, the employee could be considered as having exhausted his/her ESTA benefits for the year.

If an employer frontloads sick leave, can an employer recoup leave used more than what would have been accrued as of the date of separation?  

Yes. An employer may determine the amount that would have been accrued as of the date of separation and recoup the value of leave used more than the employee’s adjusted leave balance, provided that this deduction does not reduce the final paycheck to less than minimum wage and the employer obtained a prior written, voluntary agreement for the deduction.

How can our PTO policy meet all requirements of the new paid sick leave law? What specifically do we need to change in our PTO language to comply? 

Without seeing a policy this would be difficult to answer as one size does not fit all. Under ESTA, “if the employer provides any paid leave, that may be used for the same purposes and under the same conditions provided in this act and that is accrued in total at a rate equal to or greater than the rate described….”, the “under the same conditions” language is problematic. Employers are advised to carefully study what might need to change with their existing paid time off (PTO) policies if wishing to proceed with combining ESTA leave with paid time off (PTO) or other banks of leave time. It would seem the ESTA limits the types of restrictions employers can put on all leave time when choosing this option (e.g., would prohibit employers from requiring advance notice, mandating that vacation/personal time be used in half day/full day requirements, etc.).  Further, the policy should point out that ESTA accruals will not be paid out upon termination assuming the policy states that unused and unearned PTO is paid upon termination and that it will be important to track ESTA accruals.

What are the pros and cons of one vacation-PTO-sick bank for ESTA?  

Pros include simplicity in tracking time off, providing greater flexibility, and employees may be more transparent. Cons include less accountability for sick leave, may not be preferred by some employers, and less accountability on illnesses that may impact the workplace health and safety. 

Carryover of Unused Sick Leave

Must an employer allow the employee to carry over unused sick leave into the following year?

Carryover is required under the accrual method.  Under the frontloading method no carryover of unused earned sick time is required. However, there is a cap on the amount of paid accrued sick time that can be used from year to year of seventy-two (72) hours for employers over 11 employees and a cap of forty (40) hours for employers 10 or under employees in size.

Each year we allow payout of accrued time if not used.  Can we offer payout of unused ESTA time, or can we offer roll over or payout based on what the employee requests? 

An employer can set a policy that is more generous than what ESTA requires. The law does not require payout for unused ESTA time. The amended law addresses the situation where an employee is paid for unused ESTA time, and the employee chooses payment in lieu of carryover. In this case an employer would not have to carry over unused ESTA PTO.  The employer should carefully consider how they state their PTO policy.

If rehiring an employee within six months, how many hours does an employee get reinstated to the ESTA bank?  What if they used up all their ESTA time previously and are now rehired to the company? 

This part of the law was changed upon amendment. It now states employees rehired within two months would have whatever time they have earned and accrued but unpaid under ESTA reinstated upon hire.  If they have used all ESTA time and are rehired, they would start the accrual process again.

Benefit Upon Termination of Employment

Does an employer have to pay out unused paid sick leave upon termination (voluntary or involuntary) of employment?

It is not required to provide financial or other reimbursement to an employee for accrued earned sick time that was not used upon the employee's termination, resignation, retirement, or other separation from employment.

Situations

What if an employee is going to be late 15 minutes and claims ESTA time. Can this also be used as an unexcused absence for attendance purposes? 

If an employee uses earned sick time for being 15 minutes late, counting this as an unexcused absence and penalizing the employee could be construed as a retaliatory personnel action, especially if it leads to other adverse consequences. The employer can take adverse action if the employee uses earned sick time for a purpose other than for ESTA purposes or violates the notice requirements under this act.

When paying out ESTA time, what are the calculations for determining the rate of pay?  What if an employee works a significant amount of overtime in the pay period before the period, they claim ESTA time?  

When paying out Earned Sick Time Act (ESTA) time, the calculation for determining the rate of pay is as follows:

• An employer must pay each employee using paid earned sick time at a pay rate equal to the greater of either the normal hourly wage or base wage for that employee or the minimum wage established under the improved workforce opportunity wage act. The minimum wage rate established in section 4 of the improved workforce opportunity wage act must be no less than the minimum wage rate.
• For any employee whose hourly wage varies depending on the work performed, the "normal hourly wage" means the average hourly wage of the employee in the pay period immediately prior to the pay period in which the employee used paid earned sick time.

The law specifies that overtime pay is not included in the calculation of an employee's normal hourly wage or base wage. Therefore, even if an employee works a significant amount of overtime in the pay period before the period they claim ESTA time, that overtime pay should not be factored into the calculation of the ESTA payout rate.

Can we make the decision to only use ESTA in 1-hour increments? 

The law sets the smallest increment of earned sick time that can be used by an employee at 1 hour. The employer could provide a more generous policy.

When an employee calls in, must they state it is ESTA time? 

For the first three days of absence, employees are not required to provide documentation or a specific explanation beyond simply notifying the employer that they are using their earned sick leave. They do not have to explicitly state the reason (e.g., a specific illness or condition) for taking the time off, nor do they have to label it "ESTA time." 

After three consecutive days, the employer can require the employee to provide "reasonable documentation" showing that the leave is for a reason covered by the law. This could be a doctor's note or other proof of a legitimate need for leave. Upon the employer's request, the employee must provide the documentation to the employer in a timely manner. not more than 15 days after the employer's request

For temp employees through an agency, we can decide not to have them return based on poor attendance.  Does ESTA change the employer being able to make this decision? 

It is unclear at this time. As long as the agreement between the organization and staffing agency makes clear and certain the temp employee is of the staffing agency, the organization should have no liability under ESTA. The staffing agency should be responsible for the ESTA leave.  We will need to see any FAQs from LEO or unfortunately a court decision to know how to treat this situation.

If an employee does not have enough accrued hours to cover their absence, can you apply your attendance policy? Do they get points if they miss time, and they have no ESTA available? 

The law does not directly address whether an employer can apply its attendance policy or assign points for missed time if an employee doesn't have enough accrued hours to cover their absence. If an employee doesn't have enough accrued ESTA hours to cover their absence, the employer's ability to apply its attendance policy may depend on the reason for the absence.  Should a situation arise where an employer’s attendance policy may require an adverse employment decision consulting with qualified legal counsel may be advisable.

What happens if an employee gets a point for attendance, then brings in a note which would relate to ESTA leave? 

The point would have to be reversed.  An employer’s absence control policy shall not treat earned sick time taken under this act as an absence that may lead to or result in a retaliatory personnel action.

In our current policy, we require employees to provide a doctor’s note if they call off sick the day before the holiday.  If they bring the note, they will be paid for the holiday.  Can we continue this practice under ESTA? 

Under ESTA, you could not deny the use of earned sick time or penalize an employee for failing to provide a doctor's note for a one-day absence before a holiday.

Can leave be denied if the amount of the accrued time is less than the amount requested?  

Yes, under Michigan's Earned Sick Time Act (ESTA), an employer can deny a leave request if the employee does not have enough accrued sick time to cover the requested amount. You cannot use more sick time than you have accrued. 

What if it is proven that ESTA hours were not utilized for appropriate usage? Can we use our corrective action process? 

If it is proven that ESTA hours were misused, you can use your corrective action process to address the situation. Ensure that you follow appropriate procedures, document everything thoroughly, and remain compliant with both your internal policies and applicable labor laws.

If a waiter takes ESTA, do you consider the hourly rate and tips for ESTA pay (of the previous pay period)? 

The regular rate for a tipped employee is the applicable full minimum wage rate.

Documentation 

What does ESTA allow the employer to require in the form of notification and documentation?

The Act requires seven (7) days’ notice for use if the reason is foreseeable. If the reason for use is unforeseeable or not possible, notice must be provided “as soon as practicable.”

The ESTA specifies: “If the employee’s need to use earned sick time is foreseeable, an employer may require advance notice, not to exceed seven (7) days prior to the date the earned sick time is to begin, of the intention to use the earned sick time. If the employee’s need for the earned sick time is not foreseeable, an employer may require the employee to give notice of the intention as soon as practicable.” An employer may not require an employee to search for or secure a replacement worker.

In practice, this language will require employers to dispose of their existing notice, procedural, and documentation requirements for requesting sick time. In fact, many believe this language is ripe for abuse and will provide employees with up to 72 hours of no-notice, intermittent leave time each calendar year. Employers’ hands will be tied (i.e., no discipline allowed; see “rebuttable presumption”) as it relates to situations where an employee is a “no call, no show” for up to three days.

What documentation can be requested from the employee? 

Under ESTA, “for earned sick time of more than 3 consecutive days, an employer may require reasonable documentation that the time has been used for a purpose [described in the act.] Upon the employer's request, the employee must provide the documentation to the employer in a timely manner, not more than 15 days after the employer's request the employer shall not delay the commencement of earned sick time on the basis that the employer has not yet received documentation. Documentation signed by a health care professional indicating that earned sick time is necessary is reasonable documentation.”

It also says: “An employer shall not require that the documentation explain the nature of the illness or the details of the [domestic] violence.”

Under ESTA an employer may only ask for documentation after the employee has been sick for 3 consecutive days. The employer may not require information about the nature of illness/ injury on paperwork.   This contradicts FMLA laws. Correct? Employers (Human Resources) cannot determine if someone qualifies for FMLA if we don’t know the disability. 

If the situation is concurrent between ESTA and FMLA (and/or ADA or Pregnant Worker Fairness Act-PWFA) and the paperwork being requested is FMLA paperwork, the employer can ask for that information to make an informed decision concerning the FMLA aspect of the leave.  It may not require reimbursement as well, but that is unclear under the law. 

What documentation can an employer ask for if the reason for the absence is domestic violence or sexual assault?

An employer shall not require disclosure of details relating to domestic violence or sexual assault or the details of an employee's or an employee's family member's medical condition as a condition of providing earned sick time under this act.   Documentation may be a police report indicating the employee or the employee’s family member was a victim of domestic violence or sexual assault. A signed statement from a victim and witness advocate affirming that the employee or employee’s family member is receiving services from a victim services organization. Or a court document indicating that the employee or the employee’s family member is involved in legal action related to domestic violence or sexual assault.  Any documentation received must be maintained as confidential.

If the employer does require medical documentation, is it true that the employer must pay any out-of-pocket costs incurred by the employee in securing medical documentation.  Is this correct and what does this mean exactly?  

Under the law, if an employer chooses to require documentation, ESTA states that “the employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation. If the employee does have health insurance, the employer is responsible for paying any costs charged to the employee by the health care provider for providing the specific documentation required by the employer. If the employee does not have health insurance, the employer is responsible for paying any costs charged to the employee by the health care provider for providing the specific documentation required by the employer.”

How do we pay for a doctor’s visit?  What documentation do we need? 

If an employer chooses to require documentation for ESTA, the law states, “The employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation. If the employee does not have health insurance, the employer is responsible for paying any costs charged to the employee by the health care provider for providing the specific documentation required by the employer.” The term of “all out-of-pocket expenses” is undefined and will be subject to interpretation by LEO and/or courts. The best approach is to request an invoice from the employee for the doctor’s visit plus receipts for any out-of-pocket costs. The law does not state whether the organization must pay or may reimburse the employee for the doctor’s visit.

Recordkeeping

How should an employer maintain records of time taken under ESTA?

Employers should maintain hours worked and time off for non-exempt employees under their normal hours worked and attendance recording method. Tracking and recording exempt employee use of paid leave should ensure the employer accurately tracks the use of paid time off under the law.

How long  should an employer maintain records of time taken under ESTA? 

Employer shall retain records of hours worked and earned sick time take by employees for three (3) years.

Under ESTA, does an employer have to advertise the payments for medical visits and documents in its policy? 

We believe so as it is a requirement of the law. 

Unlawful Retaliation/Interference

What rights does the law create for the employee? 

The "Earned sick time act" (ESTA) grants employees several rights pertaining to earned sick time.

These rights include:

• The right to use earned sick time pursuant to the act.
• The right to file a complaint or inform any person about any employer's alleged violation of this act.
• The right to cooperate with the Department of Licensing and Economic Opportunity in its investigations of alleged violations of this act.
• The right to inform any person of their rights under this act.

ESTA explicitly prohibits employers from interfering with, restraining, or denying the exercise of these rights. Employers cannot take retaliatory personnel action or discriminate against an employee for exercising their rights. An employer's absence control policy must not treat earned sick time taken under this act as an absence that may lead to retaliatory personnel action.

What if an employer disciplines or discharges an employee due to attendance?

If an employer disciplines or discharges an employee due to attendance, it could potentially violate the "Earned sick time act" (ESTA).

Specifically, the law states that an employer's absence control policy must not treat earned sick time taken under this act as an absence that may lead to or result in retaliatory personnel action.

If the disciplinary action or discharge is a result of using earned sick time, the employee has the right to:

• File a complaint with the Department of Licensing and Economic Opportunity.
• Inform any person about the employer's alleged violation of this act.
• Bring a civil action for appropriate relief.

There is a rebuttable presumption of a violation if an employer takes adverse personnel action against a person within 90 days after that person files a complaint, informs others of a violation, cooperates with an investigation, opposes a prohibited policy, practice, or act, or informs others of their rights under this act.

However, an employer may take adverse personnel action against an employee if the employee uses earned sick time for a purpose other than a purpose described in section 4, or violates the notice requirements under this act.

We have an attendance policy that tracks all absences and assigns points to every absence or tardiness. If the employee takes too many absences, they are disciplined up to discharge. Would this be considered retaliation under ESTA?

Yes, an employer’s absence control policy shall not treat earned sick time taken under this act as an absence that may lead to or result in a retaliatory personnel action.

What if an employee is disciplined or discharged after an ESTA covered absence. Could a complaint be made against the employer?

An attendance policy that assigns points to every absence or tardiness, potentially leading to discipline or discharge, could be considered retaliation under the "Earned sick time act" (ESTA).

According to the law:

• An employer's absence control policy must not treat earned sick time taken under this act as an absence that may lead to or result in retaliatory personnel action.

Therefore, if the attendance policy assigns points for absences covered under ESTA, such as using earned sick time for:

• The employee's or their family member's mental or physical health needs
• Domestic violence or sexual assault-related reasons
• School meetings related to a child's health or disability
• Public health emergencies

it would likely violate the act.

An employee disciplined or discharged under such a policy for using earned sick time has the right to file a complaint or bring a civil action against the employer.

However, it is important to note that an employer may take adverse personnel action against an employee if the employee uses earned sick time for a purpose other than a purpose described violates the notice requirements under this act.

Can an employee file a private cause of action under ESTA?

Yes, an employee can bring a civil action for appropriate relief if an employer violates the "Earned sick time act" (ESTA).

According to the law:

• If an employer violates this act, the employee affected by the violation, at any time within 3 years after the violation, or the date when the employee knew of the violation, whichever is later, may bring a civil action for appropriate relief.
• The relief includes payment for used earned sick time; rehiring or reinstatement to the employee's previous job; payment of back wages; reestablishment of employee benefits to which the employee otherwise would have been eligible if the employee had not been subjected to retaliatory personnel action or discrimination; and an equal additional amount as liquidated damages together with costs and reasonable attorney fees as the court allows.
• Filing a claim with the Department of Licensing and Economic Opportunity is neither a prerequisite nor a bar to bringing a civil action.

Penalties for Non-Compliance

What penalties does the law prescribe for non-compliance?

Penalties for violation of the Act such as retaliation or failing to provide earned sick time are $1000 per violation or the employer could be subjected to a civil fine of up to eight times (8x) the employee's normal hourly wage.

How long does an employee have to bring a civil action against an employer for violation of ESTA?

Any time within three (3) years after the violation or the date the employee knew of the violation.

Miscellaneous

Do I need new labor law posters?

Yes, like the minimum wage law, employers must display conspicuously at their places of business a poster that contains compliance information. Specifically, an employer shall display a poster at the employer's place of business, in a conspicuous place that is  accessible to employees, that contains the information in subsection The poster displayed should must be in English, Spanish, and any language that is the first language spoken by at least not less than 10% of the employer's workforce, as long as the poster has been translated into such that language.

What information do I need to communicate with employees?

Employers have 30 days to provide notice to employees about ESTA or at time of hire to include:

1. the amount of earned sick time required to be provided under the act;
2. the employer’s choice on how to calculate a “year”;
3. the terms under which earned sick time may be used;
4. that retaliatory personnel action by the employer against an employee for requesting or using earned sick time is prohibited; and
5. An employee has the right to file a complaint with LEO for any violation of this act.

What if an employee is rehired or is transferred; must his/her time accrued be reinstated?

Yes, the ESTA specifies an employee is transferred to a separate division, entity, or location, but remains employed by the same employer, the employer shall retain all earned sick time that was accrued at the prior division, entity, or location and may use all accrued earned sick time as provided… If an employee separates from employment and is rehired by the same employer within 2 months of the separation, the employer shall reinstate previously accrued, unused earned sick time and shall permit the reinstated employee to use that earned sick time and accrue additional earned sick time upon reinstatement.”