Paid Sick Leave – Are You Ready?

(5-7 minute read)

Ready for Michigan’s Paid Sick Leave?

Although passing paid sick leave in Michigan was anticipated, now that it is really here are you ready to administer it correctly? The new law has a March effective date, so you still have a few more weeks to get ready.

The original proposal adopted in September, 2018 would have required Michigan employers to provide employees with paid sick leave at an accrual rate of one hour for every 30 hours worked, with a maximum of 72 hours per year.  After adoption of the proposal, however, the legislature amended the terms.  Under the new paid sick leave law, which only applies to employers with 50 or more employees, workers accrue one hour of paid sick leave for every 35 hours worked. On this accrual system, employees are permitted to carry over up to 40 hours of paid sick leave.

However, employers are not required to allow employees to use more than 40 hours of paid sick leave per year, and can limit employees’ accrual to a maximum of 40 hours per year. As an alternative to the accrual system, the law also permits employers to provide all 40 hours to an employee at the beginning of the year. If an employer front loads the paid sick time in this manner, it is not required to carry over any unused sick time. For employees who begin work in the middle of a benefit year, employers can pro-rate the amount of paid sick leave provided in the employee’s initial year.

Under both the accrual and front load options of the law, paid sick leave can be used for: the employee’s own health condition; the health condition of a family member; time off due to domestic violence or sexual assault, including for medical or counseling services, relocation, or legal services or proceedings; or the closure of the employee’s workplace due to a public health emergency. The new law defines a family member as a child, parent, spouse, grandchild, grandparent or sibling. Employees requesting leave under the law must still comply with the employer’s customary notice, procedural and documentation requirements.

As is common with other paid sick leave laws, if an employer already has a paid time off benefit for its employees — one which provides at least 40 hours of paid leave per year — the paid time off can cover the paid sick time requirement under Michigan’s new law.

Are You Ready?

• Now that the regulatory change is clear, we recommend reviewing your Paid-Time-Off (PTO) polices.
• Do you offer at least 40 hours of paid leave for employees working more than 35 hours per week?
• Do you monitor part-time employees to know when and if they will become eligible?
• Do you have an HR portal and administrative process to make this visible to employees with each payroll? The new law will raise visibility and the number of questions from employees.
• A popular concept, especially if you have separate vacation, sick and/or personal time polices is to combine them into one Paid-Time-Off bank which can be used for all these reasons.  Some paid sick time banks offered by employees would not meet the minimum required, but by combining these banks into a very flexible PTO plan, you can meet your potential obligation without increasing the total amount of time off, and create a time off plan with maximum flexibility for your employees – which is what most of them want anyway – and simplify the administrative burden on you.

Need help reviewing your Paid Time Off policy?  Or your entire handbook? Give Axios HR a call.