In a nutshell:

  • Michigan lawmakers adopted a citizen-initiated law requiring employers to provide paid sick time to all employees, effectively keeping the proposal off of the November ballot and making it easier to amend in the future.
  • The paid sick time law requires employers to provide up to 72 hours (nine days) of paid sick time a year to all employees (employers with less than 10 employees only have to provide 40 hours paid and 32 hours unpaid a year).
  • Michigan has joined 10 other states in mandating employer-provided paid sick time. This will likely impact employer costs, productivity and public health, and will create compliance standards for employers.

State lawmakers adopted a proposed citizen-initiated law last week to require employers to provide paid sick time to their employees, effectively making it state law and keeping it off of the November ballot. Legislative approval of such laws do not require approval by the governor. The same day, lawmakers also adopted a citizen-initiated law to raise the minimum wage. Both proposals were adopted without immediate effect, meaning that they will not take effect until around April of next year.

Further, since the paid sick time proposal was adopted by the legislature, it can be amended by a simple majority vote in both chambers of the legislature (with the governor’s signature). Had the proposal been adopted at the ballot, it would have required a three-fourths majority vote in both chambers to amend.

The current debate around the adoption of the paid sick time and minimum wage proposals centers on whether the Republican legislative majorities in both chambers plan to amend the laws in the post-election lame duck session, or whether the laws will be allowed to take effect and remain open for amendment in later legislative sessions. Regardless of what legislative leaders decide, it is important to understand what this new law means for employers and employees in Michigan.

Earned Sick Time Act

The Earned Sick Time Act requires employers to provide one hour of paid sick time for every 30 hours worked. Employers with 10 or more employees must provide up to 72 hours (nine days) of sick time every year; those with fewer than 10 employees must provide up to 40 hours of paid and 32 hours of unpaid sick time every year. Sick time must be allowed to carry over year to year, but employers are not required to permit employees to use more than the capped levels.

Paid sick time may be used for an employee or family members’ health care needs (including preventative care). Family members are defined broadly to include any individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship. It may also be used for medical care or services needed due to domestic violence or sexual assault; school meetings related to a child’s health or disability; closures due to public health emergencies; and exposure to communicable diseases.

Federal government employees are exempt from the law. Employers will be considered in compliance if they provide paid leave (including vacation, personal or sick days, or time off) accrued in total at a rate equal to or greater than those provided in the act. Employers are not required to provide compensation for unused paid sick time.

Employers are required to retain at least three years of documentation of hours worked and paid sick time taken by employees. Compliance will be monitored by the Michigan Department of Licensing and Regulatory Affairs (LARA).

Michigan joins 10 other states with paid sick time laws

As of 2018, 10 other states have passed paid sick time laws. Most states cap mandated paid sick time at 40 hours (less than Michigan). Additionally, Michigan’s allowable use of paid sick time is broader than many other states and most other states exempt more types of employees (e.g., part-time or per-diem employees) than the Michigan law does.

At the local level, local governments in nine states and Washington, D.C., have local paid sick time ordinances on the books. Another 22 states (including Michigan) have laws prohibiting local units from adopting paid sick time ordinances.

At the federal level, the Family Medical Leave Act provides access to unpaid sick time for many types of employees.

What we know about paid sick time

We can’t say if or when the legislature will try to amend this new law, but we do know from the research that paid sick leave improves public health through the reduction of presenteeism (i.e., working while sick) and the corresponding reduction in the spread of diseases. Additionally, access to paid sick time generally increases the use of health screenings, treatment, and preventative medical care.

We also know that currently 62 percent of private industry workers in small companies (under 100 employees), 79 percent of workers in medium-sized companies (100-499 employees), and 87 percent of workers in large companies (500-plus employees) already have access to paid sick time. Furthermore, the costs of extending this benefit to lower-wage employees is lower than the cost of providing it to higher-wage employees (most of whom already have it).

While we can say with confidence that paid sick time will have an impact on worker productivity and employer costs, we don’t know exactly what that impact will be and whether benefits will outweigh costs or vice versa.

Advocates of paid sick time claim that the laws bring cost savings due to greater workforce and income stability, increased productivity, disease and illness prevention, and lower health care costs.

Detractors counter that such laws place a high economic burden on businesses and the economy, and that government should not get involved in voluntary agreements between employers and employees.

Additionally, it is unknown whether legal issues will arise. Compliance standards would be greater for multi-state employers that may have to meet multiple paid-leave standards.

Individual support or opposition to these laws likely depends on one’s perspective and views on the role of government and the private sector. Nevertheless, employer-mandated paid sick time is now state law and will have an impact on employers and employees throughout Michigan.

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