Flu season. Cold season. Each has their moment to shine, and it’s often when the sun doesn’t. When an uninvited virus breaks out in your town, your employees will likely need to take sick time from work. If you’re a small business owner in Michigan, understand the Michigan paid sick leave law.
On February 21, 2025, the Michigan Earned Sick Time Act (ESTA) made significant changes to earned sick time. We’ve got all the information below to help you understand your responsibilities.
Skip Ahead
- What is Michigan Earned Sick Time Act?
- Which employers are covered by the act?
- Which employees are exempt from receiving paid sick leave?
- What can employees use sick leave for in Michigan?
- How many sick days do you need to provide?
- Can employees roll over or cash out unused sick leave?
- What if you already offer PTO?w
- What do employers need to do?
- Streamline your responsibilities with Patriot Payroll®
What is Michigan Earned Sick Time Act?
The Michigan Earned Sick Time Act requires that employers provide paid sick leave to employees. It replaces the Paid Medical Leave Act (PMLA) that Michigan had in place previously.
Under the ESTA, all employers must provide employees with paid sick leave. Small businesses with 10 or fewer employees have until October 1, 2025 to implement paid sick leave.
Before we get into the specifics, here’s a snapshot of the Michigan paid sick leave law:
| Accrual Rate | 1 hour per 30 hours worked |
| Annual Usage Caps | 72 hours (businesses with more than 10 employees) 40 hours (businesses with 10 or fewer employees) |
| Waiting Period | Up to 120 calendar days |
| Carryover | Up to 40 hours (businesses with 10 or fewer employees) or 72 hours (businesses with more than 10 employees), unless you frontload hours |
Which employers are covered by the act?
All Michigan employers who have one or more employee(s) are covered by Michigan paid sick leave 2025.
However, small businesses that did not employ an employee on or before February 21, 2022 do not need to comply until three years after the date you first employed an employee. This applies to small businesses with 10 or fewer employees.
There’s also an exclusion for railway workers and employers covered by the Railroad Unemployment Insurance Act (RUIA).
Which employees are exempt from receiving paid sick leave?
Most employees in Michigan must receive paid sick leave. But there are exceptions.
Exempt employees include:
- U.S. government employees
- Unpaid trainees/interns
- Minors
What can employees use sick leave for in Michigan?
Employees can use accrued sick leave for the following reasons:
- Personal health needs (injury, illness, or preventative care)
- Care for a family member
- Domestic violence or sexual assault care, including medical care, counseling, or legal proceedings
- Public health emergencies (e.g., when the employee’s child’s school is closed)
How many sick days do you need to provide?
The Michigan paid sick leave accrual rate is one hour per 30 hours worked. Or, you can frontload hours at the beginning of the year or the start of employment.
Employees can accrue up to 40 hours per year or 72 hours, depending on your business size:
| Number of Employees You Have | Annual Sick Leave Usage |
|---|---|
| Fewer than 11 employees | 40 hours |
| 11 or more employees | 72 hours |
Can employees roll over or cash out unused sick leave?
Employees who accrue sick leave can roll over or cash out up to 40 hours (in businesses with 10 or fewer employees) or 72 hours (in businesses with more than 10 employees).
If you frontload paid sick leave hours, you do not need to let employees carry over unused sick time from year to year.
What if you already offer PTO?
You do not need to provide additional sick time if you already have a paid time off (PTO) policy that meets the minimum requirements of Michigan ESTA.
What do employers need to do?
Failing to comply with the Michigan paid sick leave law can result in a $1,000 administrative fine, plus civil penalties up to eight times the employee’s normal hourly wage. Violating the posting requirement subjects you to a $100 administrative fine per violation.
Want to avoid steep penalties? There are several things you need to do to comply with the Michigan Earned Sick Time Act:
- Display the Michigan workplace poster outlining employees’ rights under the ESTA (find it here!)
- Distribute a written notice explaining sick leave rights, accrual rates, usage caps, etc.
- Maintain records documenting hours worked and earned sick time for at least three years.
- Determine if your existing PTO policy meets or exceeds the requirements. If not, provide paid sick leave to employees (accrual or frontloading) and set usage caps according to your business size.
Streamline your responsibilities with Patriot Payroll®
Don’t let paid sick leave trip up your payroll process. With Patriot’s online payroll, you can track, calculate, and pay sick leave with ease.
Patriot’s payroll software makes it easy to:
- Set up accrual rules to automatically accrue sick leave for employees
- Track each employee’s paid sick leave balances
- Give employees an easy way to track their paid sick leave balances
- Pay employees for paid sick leave
Get a free trial of Patriot’s award-winning payroll here!
This is not intended as legal advice; for more information, please click here.
