Publication

17 March 2025

Michigan Department of Labor and Economic Opportunity Updates ESTA FAQs

The same day the amended version of ESTA was enacted (February 21, 2025), the Michigan Department of Labor and Economic Opportunity (LEO) issued revised FAQs to answer several questions about the amendments.  LEO updated its FAQs again on March 7, 2025.

Some edits to the FAQs appear to elaborate known interpretations of the law by examples, but several suggest new interpretations of the Act.  Below we point out some important changes in the FAQs that may help employers navigate areas of uncertainty surrounding the amended ESTA.

New Hire Waiting Period

  • Old FAQ: Allowed employers who frontload to apply the 120-day waiting period for new employees’ use of paid sick leave.
  • Updated FAQ (#15): States: “As an alternative to tracking accruals, if an employer is frontloading earned sick time benefits, the 120-calendar day [waiting period] does not apply.”

Smallest Increment of Use

  • Old FAQ: Was unclear whether ESTA must be taken in 1-hour increments.
  • Updated FAQ (#16): Clearly states “No” to the question of whether ESTA must be taken in 1-hour increments. Instead, it states that the employer may allow 1-hour increments or the smallest increment that the employer uses to account for absences or use of other time.

On-Call Employees

  • Old FAQ: Did not explicitly address on-call employees.
  • Updated FAQ (#15): “Employers may require on-call employees’ use of ESTA for periods of time in which the on-call employee is scheduled to work, or periods of time that the on-call employee would be scheduled to work but for circumstances justifying the use of earned paid sick time.”

Counting Owners of Small Businesses

  • Old FAQ: Did not address whether owners were included in total employee count.
  • Updated FAQ (#5): “Owners that are employees of the employing entity are included for purposes of calculating the number of employees. Owners that are not considered employees of the employing entity are not included. Owner(s) that are employees may be exempted from benefits if meeting the employee exemptions.”

Frontloading Paid Sick Time for Part-Time Employees

  • Old FAQ: Did not provide detailed guidance for frontloading sick time for part-time employees.
  • Updated FAQ (#12): Employers may also frontload paid sick time for part-time employees with a prorated amount, subject to specific notice and true-up requirements:

“For part-time employees (e.g., normally working less than 40 hours per week), an employer may frontload less than 40 hours for a small business and less than 72 hours for other employers if (MCL 408.963):

  • The employer provides the part-time employee with a written notice of how many hours the part-time employee is expected to work for a year at the time of hire;
  • The amount of earned sick time provided to the part-time employee at the beginning of the year is, at a minimum, proportional to the earned sick time that the part-time employee would accrue if the part-time employee worked all of the hours expected as provided in the written notice; and
  • If the part-time employee works more hours than what is expected as provided in the written notice, the employer must provide the part-time employee with additional earned sick time in accordance with the accrual requirements (e.g., 1 hour for every 30 hours worked).”

Using Different Methods (Frontloading v. Accrual) for Different Employees

  • Old FAQ: Was silent.
  • Updated FAQ (#8): States that employers can use both the frontloading and accrual methods for different classification of employees, such as frontloading full-time employees and using the accrual method for part-time employees.

No-Call No Shows and Notice

  • Old FAQ: Previously addresses the question of “can an employee no call no show for three days without recourse?”, providing, generally “No” except for extreme circumstances.
  • Updated FAQ (#25 & #27): Adds language to elaborate if an employee’s need for earned sick time is not foreseeable, the employer may require the employee to give notice as soon as practicable or according to the employer’s policy. The policy must be provided in writing at the time of hire or when the policy takes effect, and it must allow the employee to give notice after becoming aware of the need for sick time. An employer cannot deny unforeseeable sick time if they did not provide a written policy or failed to notify the employee of policy changes related to notice within 5 days.

Carry-Over

  • Old FAQ: Provided that employers using the accrual method must allow carry-over or payout of unused time (up to 72 hours for full-time employees and 40 hours for part-time, unless the employer selects a higher limit), but did not specifically provide instructions for frontloading employers.
  • Updated FAQ (#23): States specifically employers frontloading are not required to allow carryover or payout of unused earned sick time.

Questions

Please don’t hesitate to reach out to one of the authors or your favorite Miller Johnson employment attorney if you have any questions.

The above is not an exhaustive summary of the changes to the FAQs. This client alert is for informational purposes only and does not constitute legal advice. For specific legal advice, please contact your Miller Johnson Employment and Labor attorney.