Michigan Supreme Court Reinstates 2018 Paid Sick Leave, Minimum Wage Provisions

On July 31, the Michigan Supreme Court released an opinionin the case of Mothering Justice v. Nesselthat held that, effective on February 21, 2025, Michigan employers are required to comply with the provisions of the Improved Workforce Opportunity Wage Act (the Wage Act) and the Earned Sick Time Act as originally proposed in 2018.

In 2018, two ballot initiatives known as the Improved Workforce Opportunity Wage Act (the Wage Act) and the Earned Sick Time Act were adopted by the Michigan Legislature, which were then amended within the same legislative session. Among other changes, the Michigan Legislature amended the Earned Sick Time Act to limit coverage to employers with 50 or more employees and provided eligibility exclusions for 12 employee categories, including employees who worked less than 25 hours per week on average in the preceding calendar year and overtime exempt employees.

The Michigan Supreme Court held that the legislature could not adopt an initiative petition and then later amend it in the same legislative session, because this violated the people's right to propose and enact laws through the initiative process. This means that as of February 21, 2025, employers must provide paid sick leaveto their employees according to the 2018 ballot initiative, as follows:

Covered Employer:All employers are covered, including small businesses. Employers are considered small businesses if they have fewer than 10 workers during a given week, including full-time and part-time employees and workers from a temporary service or staffing agency. An employer is not a small business if it maintains 10 or more employees on its payroll during any 20 or more calendar workweeks in either the current or the preceding calendar year.

Eligible Employees:All employees in Michigan are eligible, including full-time, part-time, and seasonal employees.

Accrual and Use: Employees accrue at least one hour of paid sick leave (PSL) for every 30 hours worked in a year. Employees of a small business cannot use more than 40 hours of PSL unless the employer provides a higher limit. If an employee of a small business accrues more than 40 hours of PSL in a calendar year, the employee is entitled to use an additional 32 hours of unpaid sick leave in that year, unless the employer provides a higher limit. Employees of a small business must be permitted to use PSL before using unpaid sick leave. All other employees accrue at least one hour of PSL for every 30 hours worked but cannot use more than 72 hours of PSL per year, unless the employer provides a higher limit. Exempt employees are assumed to work 40 hours unless the employee's normal work week is less than 40 hours in which case PSL accrues based upon that normal work week. Employees begin to accrue paid leave 90 days following the start of their employment or 90 days following the effective date of the law, whichever is later. An employee may use accrued PSL as it is accrued.

Carry Over:All unused PSL carries over from year to year, subject to the usage rules for small businesses and all other businesses.

Increments: Employers may set the minimum increment for PSL as either hourly increments or the smallest increment that the employer's payroll system uses to account for absences or use of other time, whichever is smaller.

Covered Leave Reasons:An employee may use PSL for:

• Medical: an employee's mental or physical illness, injury, or other health condition, need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition, or need for preventive medical or health care.

• Family care: caring for a family member with a mental or physical illness, injury, or other health condition, who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or other health condition, or who needs preventive medical or health care.

• Safe leave: leave from work because of domestic abuse, sexual assault, or stalking of the employee or employee's family member.

• Small necessities: 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.

• Business/school closure: closure of the employee's place of business due to public health emergency or an employee's need to care for a family member whose school or place of care has been closed due to public health emergency.

• Exposure:when it has been determined by the health authorities having jurisdiction or by a health care provider that the presence of the employee or family member of the employee in the community would jeopardize the health of others because of the exposure of the employee or family member of the employee to a communicable disease, whether or not the employee or family member has actually contracted the communicable disease.

Covered Family Members:An employee can take sick leave for the following relationships:

• a child, including a child to whom the employee stands in loco parentis

• a parent or legal guardian, including a person who stood in loco parentis when the employee was a minor child

• a spouse or domestic partner

• a grandparent

• a grandchild

• a sibling; and

• any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship.

Employee Notice Requirements:When the use of paid leave is foreseeable, the employer may require the employee to provide 7 days' notice before the date the leave is to begin. When the use of paid leave is not foreseeable, the employee must notify the employer as soon as practicable.

Employer Notice Requirements:Employers must provide to their employees written notice of their PSL rights including the amount of sick leave required to be provided, the employer's choice of how to calculate a year, the terms under which sick leave may be used, anti-retaliation rights, and the employees right to bring a civil action or file a complaint for violations of the law. The notice should be provided in English, Spanish, and any language that is the first language spoken by at least 10% of the employer's workforce (where the state has provided a translated notice).

Certification:An employer may require reasonable documentation for the use of sick leave of more than three consecutive days.

Coordination with Other Leaves and Policies:Employers are considered in compliance if the employer provides paid leave with the same amounts, for the same purposes, under the same conditions, and at an accrual rate equal to or greater than provided by the law. Additionally, small businesses are considered in compliance when their employees are entitled to use PSL before using unpaid sick leave. If employees are covered by a collective bargaining agreement (CBA) as of February 21, 2025, the provisions of this law will apply beginning on the expiration date stated in the CBA.

FINEOS can help with your state leave programs

Using modern insurance technology solutions like the FINEOS Platformcan help insurance carriers remain compliant and competitive when leave legislation is revised and new products are authorized by governing jurisdictions. Learn more about how a modern, integrated disability and absence management (IDAM) solutioncan help your organization adapt to this rapidly evolving market and remain in compliance.

Public link

Please use the above public link if you want to share this noodl on another website.