While the Earned Sick Time Act (ESTA) took effect for employers with more than 10 employees on February 21, 2025, smaller employers have until October 1, 2025.

Employers with 10 or less employees will need to provide earned sick time beginning October 10, 2025, and can limit use to 40 hours per year. Employees earn one hour of sick time for every 30 hours worked. While NFIB fought hard for a full exemption, we were able to eliminate the 32 unpaid hours included in the original language.

An employer is considered a “small business” if it employs 10 or fewer employees. This includes full-time, part-time, and temporary employees, including those provided through a temporary service or staffing agency or similar entity. Once an employer employs 11 or more employees for 20 or more workweeks in the current or prior calendar year, the employer cannot be a “small business” again until it meets the requirements above.

Links to resources provided by NFIB and the Michigan Department of Labor and Economic Opportunity (LEO) Wage and Hour Division can be found HERE.

If you have any questions, please feel free to contact NFIB Michigan State Director Amanda Fisher, or you can contact Wage and Hour directly HERE.

NFIB along with other business groups, Speaker Hall, and the House and Senate Republicans, were able to make substantial changes to the petition-initiated legislation that the Michigan Supreme Court put in place HERE. Changes include:

• Clarify notification requirements with more accountability for employees using earned sick time by allowing employers to provide written policies
• Allows employers to frontload time instead of tracking accrual
• Allows for a base wage for variable wage employees that does not include commission, overtime, bonus etc.
• Exempts youth workers
• Exempts unpaid interns
• Eliminates the presumption of guilt if a complaint is made to the department
• Eliminates the ability for employees to directly sue employers for alleged violations

Please note that while these changes were a move in the right direction, there are still changes to be made to give employers clarity and small businesses relief. After seven years, NFIB isn’t done fighting to make ESTA better and will continue fighting for a full small business exemption.