NFIB applauds the bipartisan passage of House Bill 4002 which makes crucial administrative changes to the Earned Sick Time Act (ESTA), which is set to go into effect tomorrow, February 21, 2025.

“We are thankful to the legislature for making several significant changes to ESTA that will make the law more manageable for small business owners. While this bill does not contain all of the provisions our members would like to see, we are aware of the political reality of split government and are especially grateful to Speaker Matt Hall who championed the cause of small business during negotiations,” said Amanda Fisher, NFIB Michigan State Director.

“We appreciate those on the Democratic side who chose their constituents over big labor and voted for HB 4002. However, NFIB is extremely disappointed that Senate Democrats chose to block any kind of full exemption for small businesses and seasonal employees during discussions, despite tremendous pressure from Speaker Hall, Senate Minority Leader Nesbitt, and the House and Senate Republican Caucuses,” continued Fisher. “NFIB will continue to fight for a small business exemption in this legislature and beyond.”

The legislation, which is expected to be signed by Governor Whitmer immediately, contains several provisions that will help small businesses including:

• Employers with 10 or less employees are required to provide 40 hours of earned sick time per year (eliminating the 32 unpaid hours)
• Employers with 10 or less employees have until October 1, 2025, to comply
• 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
• One hour as the smallest time increment that sick time can be used
• Exempts new business start-ups for the from ESTA for three years