New bills introduced to change the recently passed Earned Sick Time Act
On September 11, 2018 the state of Michigan joined ten other states to add a mandatory paid sick leave law. The Earned Sick Time Act (ESTA) follows a similar pattern to other paid sick leave laws. However, it takes things further than most by increasing the amount of time that can be taken (72 hours per benefit year), limit advanced notice requirements, limits employers’ ability to verify leave is warranted and makes it difficult for employers to defend against abuse of the law.
However, the law is still being discussed as noted in the Detroit Free Press:
“In the final weeks of this year’s lame-duck legislative session, state lawmakers have plans to tackle many odds and ends, but the two items that are causing the most heartburn is a plan to unravel laws passed earlier this year to raise the minimum wage from $9.25 to $12 per hour and require employers to provide paid sick time for workers.”
Some representatives in the legislature are looking at ways to lessen the negative impact on employers. Advocates stress the need to allow employees the ability to stay home when ill or to care for family members without worrying about loss of pay or adverse effects on their job. The Michigan Chamber of Commerce has also expressed concerns with the law due to the burden they feel it would put on all employers in the state. No matter what side of the discussion people appear on, it is likely some type of change may be made to the existing law. However, that doesn’t mean Michigan employers, especially small employers should wait.
Employers should begin to plan on how to comply with the Earned Sick Time Act now.
The Michigan paid sick leave law would go into effect 91 days after the current legislature session ends which would be around April 1, 2019. Employers would need to provide 1 hour of paid sick leave for every 30 hours worked. Employees would be able to take up to 72 hours of paid leave during each benefit year. There are many similarities to the recently passed New Jersey Paid Sick Leave Act but there are also important differences.
Let’s look take a closer look at the law.
What Employers must Comply?
It applies to all employers in Michigan regardless of size. There is a slight accommodation for small businesses (less than 10 employees). For these employers the first 40 hours would be paid leave but the remaining 32 hours could be unpaid leave. However, paid sick leave must be used first before unpaid leave is used.
There is an exemption for US Government employers but all other employers must comply.
Note, at this time it is unclear how this will affect out-of-state employers who use remote employees in Michigan or multi-state employers. Hopefully further guidance may be provided by the department. Until then, employers with these types of employees should check with a local attorney.
How is Family Member Defined?
The Michigan paid sick leave law describes family members as:
- A biological, adopted or foster child, stepchild or legal ward, a child of a domestic partner, or a child to whom the employee stands in loco parentis.
- A biological parent, foster parent, stepparent, or adoptive parent or a legal guardian of an employee or an employee’s spouse or domestic partner or a person who stood in loco parentis when the employee was a minor child.
- A person to whom the employee is legally married under the laws of any state or a domestic partner.
- A grandparent, grandchild, biological, foster or adopted sibling.
- Any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.
When Can Paid Sick Leave be used?
An employee may use earned sick leave under the following circumstances:
- The employee’s mental or physical illness, injury, or health condition.
- The employee’s family member’s mental or physical illness, injury, or health condition.
- The employee or the employee’s family member is a victim of domestic violence or sexual assault, for medical care or psychological or other counseling for physical or psychological injury or disability; to obtain services from a victim services organization; to relocate due to domestic violence or sexual assault; to obtain legal services; or to participate in any civil or criminal proceedings related to or resulting from the domestic violence or sexual assault.
- 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.
- For closure of the employee’s place of business by order of a public official due to a public health emergency; for an employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency; or when it has been determined by the health authorities having jurisdiction or by a health care provider that the employee’s or employee’s family member’s presence in the community would jeopardize the health of others because of the employee’s or family member’s exposure to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease.
Note, the employer cannot require that an employee find a replacement if they use earned sick leave under the law.
Employers will be required to provide some type of notice of employee rights by April 1, 2019 that must include:
- The amount of earned sick time required to be provided to an employee.
- The employer’s choice of how to calculate a “year” for purposes of accrual and use of leave.
- The terms under which earned sick time may be used.
- That retaliatory personnel action by the employer against an employee for requesting or using earned sick time for which the employee is eligible is prohibited.
- The employee’s right to bring a civil action or file a complaint with the department for any violation of the Earned Sick Time Act.
The Department of Licensing and Regulatory Affairs will produce a poster and/or notice that employers can use to comply with the notification requirement. The poster and/or notice will be produced in English and Spanish and any other language the department determines is necessary.
Finally, it should be noted that the employer will not be the only source for notification of employees of their rights under the Earned Sick Time Act. The law creates an outreach program to notify child care and elder care providers, domestic violence shelters, schools, hospitals, community health centers, and other health care providers of the paid sick leave that will be available to employees and their families.
For this reason alone, an employer is well advised to plan on how to administer and communicate the mandated Michigan paid sick leave benefit to avoid penalties for non-compliance. Employees will be aware of their rights. History shows, people will pursue litigation if they believe they have been retaliated against or prohibited from using a benefit.
An employer can require no more than 7 days advance notice for foreseeable leave requests. Notification of leave for unforeseen events can be done as soon as practical. Employers cannot delay or prevent an employee from using their earned paid sick leave because they did not provide documentation.
If an employer wants to obtain documentation it cannot be requested unless the employee is out for 3 or more consecutive days. The documentation cannot ask for specific information as to the medical condition, domestic violence or sexual assault but must accept a statement that leave was necessary due to one of the qualifying reasons.
Beware! The employer will have to pay for any cost incurred by the employee to obtain a statement or validation of the reason for the leave. Based on the limited information that can be requested, just getting a signed statement from the employee to document the basic reason for the leave may be a better approach.
Accrual of Earned Paid Sick Leave
Paid sick leave must be accrued beginning on the later of April 1, 2019 or when an employee is hired, whichever is later. Under the Earned Sick Time Act an employee earns 1 hour of paid sick leave for every 30 hours worked. This applies to all types of employees including full-time, part-time, or temporary.
Employees of small employers still accrue 1 hour of sick leave for every 30 hours worked, but only the first 40 hours is paid sick leave. The additional 32 hours can be unpaid leave.
Carry Over of Unused Earned Leave
Any unused leave will carry over to the next benefit year and be immediately available for use. However, an employee can’t use more than 72 hours of paid leave or in the case of small employers, 40 hours of paid leave and 32 hours of unpaid leave during the benefit year.
The employer is not required to pay for any unused earned sick leave at the end of the benefit year, upon termination of employment or retirement.
Newly hired employees begin to accrue time as of the date of hire, but an employer can require that they not use the earned paid sick leave until 90 calendar days after employment begins.
If an employee is transferred to a new position, division or continues employment after a sale or merger, any earned sick leave should carry forward to the new position, division or company.
Employees who are rehired or reinstated within 6 months of termination must have any unused earned sick leave reinstated and available immediately for use.
A Word About Intermittent Leave
Intermittent earned sick leave must be provided in the smallest increment that the employer’s payroll system uses to account for absences or use of other time. Employers should review their PTO policies, FMLA policies (if it applies) as well as payroll practices to ensure they all align with the new law’s requirement.
For example, if you allow employees to use multiple 15-minute break periods throughout the day as FMLA leave or even as an accommodation for an employee’s medical issue, then paid sick leave would have to be able to be taken in 15-minute increments as well.
Beware Retaliation or Interference with Employee Rights
Under the Earned Sick Time Act, an employer can’t interfere with, restrain, or deny any rights protected under the law.
The rights protected by this regulation include, but are not limited to, the right to use earned sick time for the qualified events identified in the act; the right to file a complaint or inform any person about any employer’s alleged violation; the right to cooperate with the department in its investigations of alleged violations; and the right to inform any person of his or her rights under the Michigan paid sick leave law.
Earned sick time taken under the act as an absence can’t lead to or result in a retaliatory personnel action. In other words, you should check your leave policies and call in procedures to ensure they don’t conflict with the Earned Sick Time Act.
There is a rebuttable presumption of a violation if an employer takes adverse personnel action against a person within 90 days after that person does any of the following:
- Files a complaint with the department or a court alleging a violation;
- Informs any person about an employer’s alleged violation;
- Cooperates with the department or another person in the investigation or prosecution of any alleged violation;
- Opposes any policy, practice, or act that is prohibited under the Earned Sick time Act; or
- Informs any person of his or her rights under the Michigan paid sick leave law.
If an employer is found in violation, penalties can include reinstatement of employment and benefits, payment of lost wages as well as fines and penalties. This area of the law is currently under review and may change with future legislation. But until then,
personnel actions that could be perceived as retaliatory should be reviewed by an employer’s legal counsel.
- Determine benefit year (12-month period for accrual and use of earned sick leave)
- Review current PTO policies and procedures to find any conflicts or issues
- Update current administrative policies to reflect the requirements under the new law
- Be ready to update procedure manuals, employee benefit communications (such as benefit portals, company websites, employee handbooks, etc.)
- Train human resource personnel, managers, supervisors or anyone who handles leave policies
- Create employee communication and documentation (aka forms) to be provided along with required poster and/or employee notice generated by the state
- Check back with BCLHRHelper.com to stay up to date on any changes
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BCL Systems, Inc.
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