Your ESTA policy may be compliant. But are your actual practices?
Michigan employers have spent considerable time adjusting to the Michigan Earned Sick Time Act (ESTA).
Policies have been written or revised. Employee handbooks have been updated. Payroll and HR systems have been adjusted. Managers have received information. Employees have been notified.
For many organizations, that creates a natural sense of relief:
“We’ve taken care of ESTA.”
But there is another question CEOs, COOs and HR leaders should be asking:
Is what’s actually happening inside the organization consistent with what the ESTA policy says?
That is where potentially costly risk can hide.
A Good Policy Is Only the Beginning
Consider a simple scenario.
Two employees working in different departments have similar attendance situations.
One supervisor recognizes that an absence may qualify for protected earned sick time and follows the organization’s established process.
Another supervisor treats a similar absence as a regular attendance occurrence and moves toward corrective action.
Same employer.
Same ESTA policy.
Different application.
Now add questions involving documentation, call-in procedures, PTO, intermittent absences, manager training and FMLA.
Suddenly, what appeared to be a straightforward policy issue becomes a much larger leave-administration issue.
The written policy may be correct.
The vulnerability may exist in what happens after an employee says:
“I can’t come to work today.”
Could a Leave Mistake Become a $100,000 Problem?
Employment problems rarely become expensive because of one sentence in an employee handbook.
The greater cost can develop when a series of decisions, inconsistent practices or documentation problems eventually contributes to an employee complaint, agency action, litigation or settlement.
Add potential legal expenses, back pay, damages, lost productivity, management time and disruption, and a seemingly small leave issue can become significantly more expensive.
That’s why the better question isn’t simply:
“Do we have an ESTA policy?”
It is:
“Can we demonstrate that we’re administering it correctly and consistently?”
What I Recently Learned From Looking Beyond the Policy
I recently completed an independent Michigan ESTA and FMLA audit and risk assessment for a Michigan organization employing approximately 650 people across multiple divisions, including union-represented employees.
This wasn’t simply a handbook review.
The engagement examined policies, practices, processes and documentation and gathered input from approximately 100 employees, managers, HR staff and senior leaders across the organization.
Looking at the organization from multiple perspectives made it possible to evaluate something a policy review alone cannot fully answer:
What is actually happening?
Following the engagement, the organization’s Deputy CEO provided a letter of recommendation describing the value of the assessment.
He noted that the audit identified opportunities to:
- Strengthen organizational processes,
- Improve consistency,
- Reduce organizational risk, and
- Better support managers and employees.
He also emphasized the value of receiving an independent perspective on existing HR practices and opportunities for improvement.
That distinction matters.
An Independent Review Isn’t an Indictment of HR
Some leaders hesitate to bring in an outside HR professional because they worry about the message it might send to their internal HR team.
I look at it differently.
Organizations routinely use outside accountants, attorneys, auditors and other specialists to provide independent expertise in important areas of risk.
HR should be no different.
A strong HR team may have created an excellent ESTA policy and still benefit from an independent assessment of how that policy is being administered throughout the organization.
The purpose isn’t to catch HR doing something wrong.
The purpose is to help HR and leadership answer:
“Are we doing what we think we’re doing?”
ESTA Doesn’t Stand Alone
One reason leave administration deserves special attention is that employees don’t categorize their personal circumstances according to employment laws.
An employee doesn’t typically tell a supervisor:
“I am presenting you with a Michigan ESTA and FMLA coordination issue.”
They say:
“My child is sick.”
“I need to take my mother to an appointment.”
“My doctor says I need to be off work.”
“I’m not able to come in today.”
Someone inside the organization then has to recognize what that information may mean and determine what happens next.
Depending on the circumstances, questions may arise involving:
- Michigan ESTA
- FMLA
- PTO
- attendance policies
- documentation requirements
- other applicable employee protections
And the first person who receives that information may not be an HR professional.
It may be a frontline supervisor.
That is why leave compliance is not simply an HR-policy issue.
It is an organizational risk issue.
Eight Questions Michigan Employers Should Be Asking
Before assuming your organization is fully protected, consider these questions:
1. Are managers consistently recognizing potential ESTA situations?
2. Do employees receive consistent information about using earned sick time?
3. Are documentation requirements being handled appropriately?
4. Does your attendance policy operate correctly alongside ESTA?
5. Are ESTA, PTO and FMLA being coordinated appropriately?
6. Are leave decisions and records documented consistently?
7. Would two managers faced with the same employee situation handle it the same way?
8. If an employee challenged a leave-related decision tomorrow, could the organization clearly demonstrate what happened and why?
If leadership cannot confidently answer all eight questions, that does not automatically mean the organization has a compliance problem.
It means there may be something worth examining.
Introducing the Michigan ESTA & FMLA Leave Compliance Shield™
I developed the Michigan ESTA & FMLA Leave Compliance Shield™ to provide employers with an independent assessment of what is happening beyond the written policy.
Depending on the organization’s needs and complexity, the assessment can examine areas such as:
- ESTA and FMLA policies and procedures
- Actual leave-administration practices
- Documentation and recordkeeping
- Leave tracking and coding
- Manager knowledge and practices
- Consistency across departments
- Coordination of ESTA, FMLA and PTO
- Attendance-policy interaction
- Potential compliance vulnerabilities
- Opportunities to strengthen oversight and processes
The objective is not to create another report that sits on a shelf.
The objective is to give leadership a clearer picture of:
What’s working?
Where are the gaps?
Where is the risk?
What should we address first?
Before the Small Gap Becomes the Expensive Problem
Your organization may already have an excellent ESTA policy.
Your HR team may be doing an excellent job.
Your managers may have received training.
But there is still one question worth asking:
Are we doing what we think we’re doing?
Because when it comes to HR risk, one of the most expensive sentences a leader can eventually say is:
“I thought we were covered.”
How Confident Are You?
If you’re a Michigan CEO, COO or HR leader and you’re not completely confident that your ESTA policy, FMLA practices, manager actions and actual leave administration are aligned, let’s have a brief conversation.
There is no assumption that something is wrong.
Sometimes an independent second set of eyes simply confirms that the organization is on the right track.
And sometimes it identifies the small gap that is much easier—and less expensive—to address today than tomorrow.
Vanessa G. Nelson, CLRL
Executive HR Risk Advisor
President, Expert Human Resources LLC
Protecting Your Leadership Decisions. Preserving Your Reputation.
