As of February 21, 2025, Michigan employers are officially operating under a brand-new sick leave law that expands paid time off requirements for nearly every business in the state. Whether you’re running a small team or managing a growing company, this law has major implications for your HR and payroll systems.
Here’s what you need to know—and how to stay compliant without creating a paperwork nightmare.
Quick Snapshot: What Changed?
The Earned Sick Time Act (ESTA) has replaced Michigan’s older Paid Medical Leave Act. Signed into law under House Bill 4002, ESTA significantly broadens employee access to paid sick time and introduces new rules for how it must be earned, tracked, and used.
Who’s affected?
Just about every private-sector employer in Michigan—including those with just one employee.
What Employers Must Do Now
To stay compliant, you need to:
✅ Offer paid sick leave (based on company size)
✅ Track or frontload hours earned
✅ Distribute a written sick leave policy to all employees
✅ Post the official workplace notice
✅ Keep records for at least three years
Who’s Covered?
The new law applies to:
- Full-time, part-time, temporary, and seasonal workers
- All private-sector Michigan employers with one or more employees
Exemptions include:
- Federal employees
- Unpaid interns or trainees
- Employees under 18
- True gig/flex workers who control their schedules
Accrual vs. Frontloading (Your Choice)
Employees earn 1 hour of paid sick leave for every 30 hours worked, and employers must provide:
| Business Size | Max Sick Time | Carryover Allowed | Frontload Option |
| 11+ employees | 72 hours/year | Yes (up to 72 hrs) | Yes |
| 10 or fewer employees | 40 hours/year | Yes (up to 40 hrs) | Yes |
Pro Tip: Frontloading can simplify compliance, especially for small or seasonal businesses. You can skip tracking and carryover—but must “true up” part-time workers if they work more than expected.
What Counts as a “New Business”?
If you started your business on or after February 21, 2025, you’re considered a new business under ESTA.
You’ll receive a grace period before full compliance is required:
- Up to three years, or
- Until you reach 11 employees—whichever comes first.
What Can Sick Leave Be Used For?
Employees may use earned sick time for:
- Illness or preventive care (self or family)
- Caring for a sick child, parent, partner, etc.
- Attending school meetings for a child’s health needs
- Public health closures (e.g., pandemic-related)
- Recovery from or support related to domestic violence, stalking, or sexual assault
Note: “Family member” includes anyone with a close relationship equivalent to family.
Compliance Checklist
Make sure you:
🔲 Create and distribute a written policy explaining how sick time accrues and can be used
🔲 Post the required notice in a visible workplace location (Download it here)
🔲 Track hours worked, time earned, used, and carried over
🔲 Maintain records for 3 years
🔲 Translate policies if 10%+ of your staff speaks another language (if available from the state)
Penalties for Non-Compliance
| Violation | Penalty |
| Denying sick leave | Up to 8x employee’s hourly wage |
| Retaliation (e.g., firing) | $1,000 per violation |
| Not posting the workplace notice | $100 per location |
Final Tips for Business Owners
- Review your current sick leave or PTO policy
- Decide whether to use accrual or frontloading
- Train managers to handle leave requests properly
- Automate tracking if possible (Gusto payroll is great for this and we can help you set it up!)
Disclaimer: This information is provided for general informational purposes only and should not be considered legal or HR advice. Every business situation is unique. For guidance specific to your company’s policies or compliance needs, we recommend consulting with your attorney or a qualified HR professional. While we aim to keep information accurate and up to date, we make no guarantees regarding applicability to your specific circumstances.
