Detroit City Wire

With the Earned Sick Time Act (ESTA) and minimum wage changes set to take effect on February 21, Michigan businesses are urged to ensure compliance to avoid penalties. The Detroit Regional Chamber continues its advocacy for modifications but emphasizes the need for immediate adherence.

Under ESTA, all employees not employed by the federal government must receive paid leave, including temporary, seasonal, and casual workers, as well as those selling services in Michigan from outside the state. Employees accrue one hour of paid time for every 30 hours worked, with a cap of 72 hours annually. Employers with fewer than 10 employees can limit accrual to 40 hours and offer an additional 32 hours of unpaid leave. ESTA differs from the Paid Medical and Leave Act (PMLA) by prohibiting frontloading and allowing unused leave carryover year-to-year. Larger employers can restrict carried-over leave usage to 72 hours per year; smaller employers have a limit of 40 paid and 32 unpaid hours.

Employers must inform new hires about earned sick time provisions, calculation methods, terms of use, retaliation prohibition, and private suit rights. Notices should be available in English, Spanish, or any language spoken by at least 10% of employees. Employers are required to maintain timekeeping records for three years—an increase from PMLA's one-year requirement—and refrain from retaliatory actions against employees exercising their ESTA rights.

Paid leave cannot be counted as an absence under attendance policies. Employees may file claims for payment of unused sick time or seek other remedies if adverse actions occur within 90 days related to their ESTA rights. Failure to comply can result in fines up to $1,000 per violation.

The tipped minimum wage will undergo significant changes starting February 21: it will initially rise to cover 48% of the standard minimum wage—exceeding $6 from $3.93—and continue increasing until reaching parity with regular wages by February 2029.

These adjustments demand that Michigan businesses reassess their benefit and wage structures promptly. Despite hopes for legislative intervention on existing issues within the legislation, businesses must prepare for compliance by February 21. The Chamber encourages participation in its latest webinar discussion with the Michigan Department of Economic Labor and Opportunity for further guidance.