On Tuesday, Jan. 10, Dykema hosted a free webinar to help employers prepare for the Michigan Earned Sick Time Act (ESTA) and the Improved Workforce Opportunity Act (IWOWA) that are set to take effect on Feb. 19. During the webinar, three Dykema attorneys, Charlotte Carne, Sean Darke, and Melvin Muskovitz, discussed changes employers need to make to existing policies, how to effectively implement the new earned sick time mandated by the law, and the pitfalls that are contained in this statute to enable employers to protect themselves under the new legal framework.
Earned Sick Time Act (ESTA)
If ESTA goes into effect, it will apply to every employer and every employee in the State of Michigan, except the federal government, and there will be no difference between exempt versus non-exempt, union or non-union, part-time and short-term employees, or employees whose primary location is out of state. There are no exemptions for employers with fewer than 50 employees, unlike the Paid Medical Leave Act.
Under ESTA, employees must get one hour of earned sick time for each 30 hours worked without a cap on accrual of the earned sick time.
“Small” businesses must provide employees up to 40 hours of paid sick leave a year and an additional 32 hours of unpaid sick time per year, while “large” businesses must provide up to 72 hours of paid leave a year. Employers must allow unused sick time to carry over into the next calendar year.
Employees may use their earned sick time for a wide range of reasons, including:
- For employee mental or physical illness, injury, or health condition
- For employee “family member” mental or physical illness, injury, or health condition
- For employee or “family member” treatment for domestic violence or sexual assault
- Meetings at child’s school related to child’s health, disability, effects of domestic violence or sexual assault
- For closure of place of business or child’s school as a result of public health emergency
Employees utilizing their earned sick time need to give advance notice if the leave is “foreseeable” and a “practicable” notice if the leave is unforeseen. For a leave of more than three days, employers may require “reasonable documentation” to ensure the leave is being used for a proper purpose under the ESTA.
Recommended Steps for Employers
Employers must provide each employee with a written notice about the Earned Sick Time Act and the changes implemented, in addition to providing notice to new employees at the time of hire. Most importantly, employers must retain records documenting an employee’s hours worked and the sick time they have accrued and taken for at least three years.
Upon ESTA’s implementation, Dykema advises employers to answer the following three questions to determine if their business is ESTA compliant:
- Does your business generally satisfy the time requirement?
- Does your business meet the use requirement of the time available, and can employees use it for ESTA purposes?
- Do your business comply with the other provisions with ESTA?
Current benefits can be used to satisfy ESTA, but it’s recommended that employers review their current time-off policies.
“One last final comment is to be transparent with employees and to keep the lines of communication open so that they understand what’s happening with the state law and that it is in a state of flow,” said Muskovitz.
Improved Workforce Opportunity Act (IWOWA)
Under IWOWA, the minimum hourly wage rate will be raised to $13.03 if ESTA goes into effect, and minimum wage will continue to increase by the rate of inflation effective Jan. 1, 2024. Additionally, the current tipped employee minimum wage of $3.84 will change to $11.73 if ESTA goes into effect, and the tipped employee wage will simply become the minimum wage effective Jan. 1, 2024.