Inside 208

The Senate Regulatory Affairs Committee heard testimony this week on Senate Bill 15, which would amend the current Earned Sick Time Act (ESTA) set to take effect on February 21st. Both the House and Senate introduced bills in January. The House passed House Bill 4002, which makes dozens of additional changes not in the Senate version. That bill is now also in Regulatory Affairs. Senate leadership has indicated they will not entertain HB 4002 in its current form.

These bills are in response to a Michigan Supreme Court ruling in July of 2024. It stated that in 2018, lawmakers unconstitutionally adopted and amended ballot initiatives in the same year. This legislative action rejected the original proposals instead of sending them to a statewide ballot. Because of this ruling, employers with 10 or more workers must provide 72 hours of annual sick time accrued at a rate of 1 hour earned for every 30 worked (starting February 21st if no legislative action is achieved).

While both SB 15 and HB 4002 aim to narrow the scope of the current ESTA requirements, many notable differences exist. Some of those include the threshold number of employees an employer must have before ESTA applies, the number of hours allowed to be accrued or carried over, and how this is implemented.

Specifically, SB 15 would raise the small employer threshold to 25 employees or fewer and require the employer to provide 40 hours of paid leave and 32 hours of unpaid. If an employer pays the employee out for unused sick time, they can limit carryover to 144 hours, but if they do not pay the employee the value of unused sick time, they must allow up to 288 hours to be carried over.

HB 4002 would change ESTA to only impact employers with 50 or more employees. Employers can limit the carryover of unused benefits to 72 hours from one benefit year to another. The House version also exempts independent contractors, seasonal and variable-hour employees, and part-time employees. An employee must also provide detailed notification. The Senate version does not have these exemptions or requirements.

The League has asked our internal policy committee to review both bills and provide feedback, which we will use in our ongoing conversations with lawmakers. House and Senate leadership continue to state their desire to see legislative intervention on the issue before the February 21st deadline, but both sides refuse to pass the other’s bill as introduced. The House will be sending proposed amendments to the Senate next week.

If there is no legislative intervention by February 21st and the current ESTA goes into effect, we want members to know that the Department of Labor and Economic Opportunity has a website providing information for employers and employees. This site has a webinar that walks through the Act itself, who it impacts, and potential issues the state must address with employers as it is implemented. There is also an FAQ and other materials available. The link to the site may be found here: https://www.michigan.gov/leo/bureaus-agencies/ber/wage-and-hour/paid-medical-leave-act.

In the meantime, members should consult with their municipal attorney if they have questions about the specific implementation of ESTA in their community. We will keep you apprised of any legislative action taken.

Dave Hodgkins is a legislative associate with the League. He may be reached at [email protected]