Why Michigan Employers Are Losing Sleep Over Sick Leave

Over 600 Michigan business leaders participated in a forum clarifying new sick leave and wage laws, revealing widespread concerns over implementation hurdles.

Statewide Forum Reveals Employer Confusion, Frustration Over Sick Time Act

Michigan employers are bracing for significant changes to labor laws, following a forum hosted by the Michigan Chamber of Commerce and Honigman LLP. More than 600 business leaders attended the event on October 31 to unpack the complexities of the state’s new Earned Sick Time Act (ESTA) and minimum wage laws set to take effect on February 21. The laws stem from a Michigan Supreme Court decision in July, which upheld broad labor protections and mandates.

For many business owners, especially those managing small enterprises, the looming legislation has stirred concerns over compliance costs and operational hurdles. The ESTA mandates one hour of sick leave for every 30 hours worked, applying universally to all employees—regardless of part-time or temporary status—and even extends to nonprofits and government entities. Employers, large and small, must allow sick time accruals without caps on yearly accumulation, though they may limit usage to 72 hours annually.

Small Businesses Face Steep Compliance Challenges

The burden for smaller businesses was particularly evident during the session. Under ESTA, those with fewer than ten employees must offer 40 hours of paid and 32 hours of unpaid leave. Employers must prioritize paid leave before transitioning to unpaid, posing a potential financial strain. One attendee raised concerns about payroll increments, noting that time-off calculations could disrupt workflows if employers must adhere to “the smallest increment” their systems accommodate.

“There’s no one-size-fits-all,” said an anonymous attendee, expressing concerns about the inflexibility of ESTA’s rules.

Advanced Notice and PTO Integration Among Key Pain Points

Attendees were also briefed on the requirement for “one PTO bank,” meaning existing paid time off policies must be restructured to include ESTA-mandated sick leave. The law stipulates that accrued time must be used under conditions outlined by ESTA, prompting many employers to reconfigure their current time-off systems to ensure compliance.

Strategies for managing potential abuses of leave, as well as reconciling ESTA’s rules with company attendance policies, were discussed. The forum also highlighted allowable employer responses when advanced notice for leave is impractical—a frequent challenge for Michigan’s seasonal and service industries.

Advocating for Change Amid Legislative Uncertainty

The Michigan Chamber continues to lobby for adjustments to the law’s implementation framework. Chamber officials plan to push legislative changes ahead of a critical lame-duck session in December. Employers have been urged to contact lawmakers to advocate for more business-friendly modifications. Additional forums are slated, with the next session set for November 19, featuring employment law experts from Butzel.

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