This month, we’re delving into the recent legislative adjustments that have significantly modified the legislation for earned sick time in Michigan. Given the complexity and timing of these changes, understanding their nuances is crucial for compliance and proper administration.
Legislative Update
Just as we reached the anticipated effective date on February 21, 2025, the Michigan Legislature enacted last-minute amendments to the Earned Sick Time Act (ESTA) that brought significant relief, but also a bit of chaos due to their timing. These adjustments aim to balance employer and employee needs more effectively.
Understanding the Changes
For most Michigan employers (those with 11+ employees), February 21, 2025 is the effective date for ESTA. These companies have a 30 day allowance period for notifying employees and updating policies and tracking systems.
There are two exceptions to the effective date that are vital to note:
- Small Employers: If your business has 10 or fewer employees, the new compliance deadline is extended to October 1, 2025.
- New Businesses: Entities without employees prior to February 21, 2022, do not need to implement the law until three years from the date they added their first employee.
These adjustments provide some breathing room for smaller businesses and those just starting, allowing for more strategic planning and resource allocation.
Key Changes for Compliance
With the legislative updates, now is the time to revisit your internal policies:
- Structuring Time Banks: The amendments have provided clearer direction for deciding between an accrual or front loading system. The changes also provided more incentives for using a front loaded system and including ESTA within existing PTO banks.
- Policy Revisions: Beyond adjusting to the new laws, companies will need to overhaul existing policies to ensure they align with the revised requirements, especially concerning accrual calculations, employee eligibility, and attendance and notification procedures.
- Required Notification: The law requires employers to notify all employees (current and future) about the earned sick time benefit and also their rights under the law.
HRM Toolkit
With so many details within ESTA, we have created free resources and tools for supporting businesses to comply with ESTA. Visit our HRM tools and resources page for the latest information and sample policies and notification letters to support your implementation. Our team is also available for consultation and support to help you create and implement new policies and procedures. Reach out to HRMS@workwithhrm.com for more information.
Forward-Looking Strategies
As we move forward, staying informed and prepared is more crucial than ever. The legislative landscape may continue to evolve, and maintaining agility in your HR practices will be key to navigating these changes effectively.
As we wrap up this update, we look forward to moving beyond the complexities of earned sick time in our future posts. Come back next month as we explore new HR challenges and opportunities that arise in the spring season.