Michigan Earned Sick Leave Update

At A Glance

• Law and amendments to carryover and probationary periods took effect February 21, 2025.
• Small businesses requirements delayed to October 1, 2025

Introduction

On February 21, 2025, Governor Gretchen Whitmer signed HB 4002 into law. This bill amends the Earned Sick Leave (ESL) provisions, effective immediately. Small business requirements, however, have been delayed to October 1, 2025.

Eligibility

• Employer Applicability: All Michigan employers with one or more employee(s), excluding United States Federal Government employees. The Earned Sick Time Act (ESTA) applies to work performed by employees physically located in Michigan, regardless of the employer's location.
• Employee Applicability: Eligible employees are individuals engaged in service to an employer, in the business of the employer. Under state case law, employee status is determined via the Economic Reality Test. There are limited exceptions on employee eligibility that can be reviewed here.

Small Employer Exception

If a small employer did not employ an employee on or before February 21, 2022, that employer is not required to comply with the ESTA until three years after the date the employer first employs an employee.

For the purposes of this act, a small employer is defined as one who employs 10 or fewer employees, including full-time, part-time, temporary, and any employees provided through a temporary service, staffing agency, or similar entity.

All employees within the United States or its territories are included in this determination.

After an employer employs 10 or more employees for 20 or more workweeks in the current or prior calendar year, that employer can't be a "small business" again until it meets the above requirements.

Accrual Requirements

For small employers, accrual begins on October 1, 2025, or upon commencement of the employee’s employment, whichever is later. For all other employers, accrual begins on February 21, 2025, or upon commencement of employee’s employment, whichever is later.

Employers may elect to frontload the applicable hours at the beginning of a 12-month benefit period. An employer may also require a new employee, hired on or after February 21, 2025, to wait until the 120th calendar day after commencing employment before using accrued earned sick time.

Small Employer Requirements

Employees of a small business shall accrue a minimum of one hour of earned sick time for every 30 hours worked but shall not be entitled to use more than 40 hours of paid earned sick time in a calendar year unless the employer selects a higher limit.

Employees are allowed to carry over up to 40 unused, accrued hours of earned sick leave into a new benefit year.

Large Employer Requirements

All other employees shall accrue a minimum of one hour of paid earned sick time for every 30 hours worked but shall not be entitled to use more than 72 hours of paid earned sick time per year, unless the employer selects a higher limit.

Employees are allowed to carry over up to 72 unused, accrued hours of earned sick leave into a new benefit year.

Existing Paid Time Off Policy

If an employer has a paid time off policy (PTO) that provides at least the same benefits as the ESTA, and may be used for the same purposes, under the same conditions, and accrued at a rate greater than the rate described in the ESTA, then there is no requirement to provide additional benefits.