The Michigan Legislature held a late-night session Feb. 20 that ultimately led to amending the Earned Sick Time Act (ESTA) set to take effect at 12:01 a.m. on Feb. 21. Multiple amendments were made to House Bill 4002 before it passed the Senate with a bipartisan vote of 26-10 and received a concurrence approval vote from the House. The law is effective now, as it was granted immediate effect by the legislature, signed by Gov. Whitmer the morning of Feb. 21 and officially filed with the Office of the Great Seal.
While the new law may still present implementation challenges for hospitals, many positive changes were made, which include altering how much time must be provided by employers of various sizes and rewriting how employers must administer the law.
Important changes include:
- Eliminating both the private right of action and the rebuttable presumption for terminated employees.
- Explicitly allowing employers to provide all sick time hours frontloaded at the start of the year and exempting those employers from tracking accruals.
- Allowing employers to designate paid time off as a combined paid time off/sick leave bank.
- Requiring reporting for unforeseeable use of sick time by an employee as soon as practicable or in compliance with an 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.
- Refining the employee definition to exempt employees who are subject to policies that “allow the individual to schedule the individuals’ own working hours” and aren’t subject to a minimum number of hours per week.
- Generally exempts salary and variable hour employees from the accrual methodology, but assumes full work weeks for those employees for the purposes of calculating earned sick time.
- Clarifying that employers are not required to allow new employees to use their sick time within the first 120 days of employment.
- Specifying that earned sick time is paid out at the “hourly wage or base wage” and excludes overtime, holiday pay, bonuses, commissions, etc. in the calculation.
- Allowing employers to require reasonable documentation for earned sick time of more than three consecutive days, as well as requiring provision of the documentation within 15 days of the employer’s request.
All employers with 11 or more employees will now be required to provide 72 hours of paid time, with a 72-hour carryover cap from year to year. While media reports also include an exemption for nonprofits, the MHA is seeking clarity to understand how this may pertain to hospitals.
These positive changes were accomplished through the joint-efforts of a coalition of employers led by the Michigan Chamber of Commerce that included the MHA to support important changes to the ESTA prior to them going into effect on Feb. 21.
Unfortunately, the bill failed to address potential conflicts with federal employment laws, including the Family Medical Leave Act, the Americans with Disabilities Act and the Fair Labor Standards Act.
Members with questions about the legislation should contact Elizabeth Kutter at the MHA. Members with additional feedback about implementation may contact Nancy McKeague at the MHA.
Definitions
For the purposes of this update, important definitions from the bill include:
- “Earned sick time” means time off from work that is provided by an employer to an employee, whether paid or unpaid, that can be used for the following purposes:
- The employee’s mental or physical illness, injury or health condition, as well as diagnosis and treatment of such.
- The employee’s family member’s mental or physical illness, injury or health condition, as well as diagnosis and treatment of such.
- If the employee or employee’s family member is a victim of domestic violence or sexual assault and any care, services or legal proceedings for such circumstances.
- Meetings at a child’s school or place of care related to the child’s health, disability or effects of domestic violence or sexual assault.
- For the closure of an employee’s place of business due to a public health emergency.
- “Employee” means an individual engaged in service to an employer in the business of the employer. Employee does not include any of the following:
- An individual employed by the United States government.
- An individual who works in accordance with the policy of an employer if both of the following conditions are met:
- The policy allows the individual to schedule the individual’s own working hours.
- The policy prohibits the employer from taking adverse personnel action against the individual if the individual does not scheduled a minimum number of working hours.
- An unpaid trainee or unpaid intern.
- An individual who is employed in accordance with the youth employment standards act.
- “Employer” means any person, firm, business, educational institution, corporation, limited liability company, government entity or other entity that employs one or more individuals. Employer does not include the United States government.
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