By now you know that the Michigan Court of Appeals recently decided that the “adopt and amend” strategy that birthed the Michigan Paid Medical Leave Act did not violate the Michigan constitution. Read our January 26 Client Alert here.  This decision overturned a July 2022 ruling by the Michigan Court of Claims, and halts the Earned Sick Time Act from taking effect on February 19, 2023.  This means that no changes are currently needed to employers’ paid sick leave policies to comply with the ESTA.

We know this decision is almost certain to be appealed to the Michigan Supreme Court, and it’s anybody’s guess on whether or how our state’s highest court will ultimately rule on the “adopt and amend” question and how that might impact whether or when ESTA ever takes effect.

Because I’m a planner (some call it catastrophizing. . . to-may-to, to-mah-to!), I like to know what a worst-case scenario could look like, so I’ve prepared the following list of a few of the high-level differences between the Michigan Paid Medical Leave Act and the Earned Sick Time Act just in case this comes back around:

• Eligibility for leave: ESTA will apply to employers with at least 1 employee, where PMLA applied only to employers with 50 or more employees.  Each employer must provide ESTA to all employees in Michigan. Additionally, the definition of “family member” (for whom an employee can use leave to care for) is expanded to include domestic partners as well as other individuals related by blood or affinity whose close association with the employee is equivalent to a family member.
• Reasons for leave: PMLA requires employers to provide leave in 4 broad circumstances (employee illness, family member illness, domestic violence related reasons, and reasons related to public health emergency and communicable disease). ESTA adds an additional reason: For meetings at a child’s school or place of care related to the child’s health or disability, or the effects of domestic violence or sexual assault on the child.
• Amount of Leave and Use: Unlike PMLA, which requires employers to provide up to 40 hours of paid time off per year, there is no “per se” cap on the amount of time an employee can earn each year. Rather, an employer is required to provide an employee 1 hour of paid leave for every 30 hours worked. Similar to PMLA however, there is a cap on the amount of time an employee can use each year, and that cap is 72 hours.
• Rollover: Unused earned sick time will roll over from year to year (however, as discussed above, employer can cap use at 72 hours per year).
• Increments of Use: ESTA may be used in the smaller of hourly increments or the smallest increment that the employer’s payroll system uses to account for absences or use of other time.
• Notice and documentation: Employers can require no more than 7 days of advance notice for a need for foreseeable leave (previously, under PMLA, the employer could set their own “reasonable” notice requirements). Additionally, under ESTA, employers cannot require documentation to substantiate the need for leave unless the employee has missed more than 3 consecutive days. If the employer does require documentation, the employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation.
• Cash-out/reinstatement of unused time: Like PMLA, the ESTA does not require an employer to pay out unused time at separation of employment. However, ESTA does require an employer to reinstate previously accrued and unused sick time to any individual who is rehired by the same employer within 6 months of separation.

There are also differences related to record retention, civil penalties, and an employee’s ability to maintain a private right of action.

Like all best laid plans, your need for this list may never come to fruition. We’ll continue to watch how this litigation unfolds and catastroph. . . er PLAN for all of the ways Michigan employers could be impacted.

Questions?

Contact the author Sandy Andre.