Start The New Year In Compliance With The Earned Sick Time Act

By Corey Clark

The Earned Sick Time Act (ESTA) requires all employers to offer sick leave to their employees. The law applies to all employees whose physical work location is in Michigan, with few exceptions. Large businesses (11 or more employees) must allow each employee to take 72 hours of sick leave each year. Small businesses (10 or fewer employees) must allow up to 40 hours of sick leave each year. Depending on how you calculate sick leave hours, you may need to carry over unused hours into the new year.

The Earned Sick Time Act fact sheet provides detailed information and frequently asked questions related to the Earned Sick Time Act in Michigan.

The Earned Sick Time Act provides two options to calculate sick leave hours:

1. Accrued hours: Under the accrued hours method, employees accrue sick time on their actual hours worked - 1 hour of sick leave for every 30 hours worked. You must allow sick time to be taken as soon as it is accrued, up to 72 hours of sick time per year (or 40 hours for small businesses). If you use the accrued hours method of calculating sick leave hours, you must carry over unused hours into the new year, up to 72 (or 40) hours. Unused hours can be paid out in lieu of carrying them over.
2. Frontloading: Under the frontloading method, you provide all employees with the full 72 (or 40) hours of sick time at the beginning of the year. Employees can begin to take sick time as soon as the year begins, up to 72 (or 40) hours. There is no carryover requirement for frontloaded hours.

Sick time must be paid at the employee’s base hourly wage (or minimum wage if it is higher). Sick time may be taken for the employee’s or family member’s physical or mental illness, as well as treatment and preventative medical care. Additional approved uses can be found in the FAQ  of the Earned Sick Time Act website. Current paid time off (PTO) programs can be utilized to meet these requirements as long as they offer at least the required number of hours and allow the use of all ESTA-required sick leave uses.