2025 Michigan Earned Sick Time Act and Minimum Wage Laws

Feb. 21, 2025

After a long day on Feb. 20, Michigan legislators sent an updated Earned Sick Time Act (ESTA, HB 4002) and Minimum Wage law (SB 8) to the Governor for signature. We are pleased that the efforts and collective voice of the Flint & Genesee Chamber, along with many other Chambers and coalitions, resulted in a far more favorable outcome for both of these acts in comparison to the original language. While the updated laws don't provide everything we were hoping to accomplish, the new language significantly reduces burdens for employers, especially smaller businesses.

While the minimum wage laws in SB 8 are fairly straightforward, there are a number of requirements within the HB 4002 ESTA bill that warrant additional attention. Our government relations firm, Kelley Cawthorne, has combed through the updated bills that are headed to the Governor's desk and provided a summary of what we see as the most pertinent points for employers. These are posted below.

Please continue to watch for updates and webinars from the Flint & Genesee Chamber to help you understand how to implement and comply with these new policies within your organization. 

SUMMARY OF HB 4002 (ESTA) IMPACTS FOR EMPLOYERS

• Employer Size
  • 1-10 employees: 40 hours paid. Oct. 1 runway date. 40-hour carryover cap.
  • 11 employees and above: 72 hours paid. 72-hour carryover cap.

• Employee Exemptions
  • Seasonal employee exemption
    • Can’t use sick time within 120 days of hire, unless sick time is frontloaded (applies to all employees)
    • Unless rehired at same employer within two months, start over on sick time accrual (applies to all employees)
  • Variable-hour employees exempt
  • Unpaid trainees and interns exempt (Fair Labor Standards Act definition)
  • Youth employees exempt (Youth Work Permit)

• Part-Time Employees
  • Proportional frontloading based on initial estimate provided by employer at time of hiring.
  • If the employee works above this estimate, accrual hours at normal rate (1 hour/30 hours worked).

• Notification Requirements
  • Seven days for foreseeable usage
  • For unforeseeable usage, EITHER:
    • As soon as practicable, OR
    • In accordance with employer’s policy on using sick time, if the employer notifies the employee of their policy in writing and the policy allows employees to provide notice after the employee is aware of the need to use sick time.

• Allow frontloading
  • Frontloading can use time immediately.
  • Frontloading does not require carryover or paying out sick time at end of year.
    • Also does not require calculating and tracking accrual.

• Combined leave bank
  • 72 hours are subject to ESTA conditions, anything above that can be used according to employer’s vacation or PTO policies/usage requirements.

• Collective Bargaining Agreement/Union Language
  • Employer contracts with maximum three-year term can continue taking effect if they conflict with ESTA.

• Base Wage
  • Overtime/bonuses/tips/commissions are not required to be included.

• Documentation Requirements
  • Employee is required to provide documentation within 15 days after requested by an employer.

• Adverse Personnel Action
  • Allowed if the employee uses sick time for purposes not allowed by the act or violates notice requirements.

• 3-year runway for new small businesses before being subject to the act.
  • Backdated to include businesses who started less than three years ago.

• Claim Period - not later than three years after the violation.
• Private right of action is removed.
• Rebuttable presumption removed.
• Civil fine of eight times employee’s hourly wage if an employer violates the act.
• Employers must provide written notice to employees of the act’s guarantees.

For additional information at this time, we recommend reviewing this article published by the Michigan Chamber of Commerce.

Feb. 14, 2025

Update from Kelley Cawthorne, the Flint & Genesee Group's Government Relations firm:

The Senate worked until 9 p.m. on SB 8, the amended Improved Opportunity Wage Act sponsored by Sen. Kevin Hertel. This bill was tie-barred to HB 4002, the Earned Sick Time Act passed by the House in January. SB 8's passage last night starts the 5-day clock in the House, giving the greatest opportunity to find a solution prior to the February 21st deadline.

SB 8 passed out the Senate with 12 Republicans and 8 Democrats voting yes for the bill.   As for ESTA, the debate remains on the definition of a small business and who will be exempt if any from having to comply with the law.  The Republicans are pushing hard for businesses with less than 10 employees to be completely exempt.  Dems are having are having a hard time swallowing this and are working to find a middle ground solution.  We expect robust discussions throughout the weekend and next week to pass a compromise for HB 4002 by Feb. 21.