Michigan’s Earned Sick Time Act (ESTA) has been in effect for over a year now — and in that time, I have seen the same compliance mistakes showing up again and again in organizations of every size. Some are simple oversights. Others are costly misunderstandings that leave employers exposed to enforcement action, employee complaints, and reputational damage.
If your organization has not done a thorough ESTA review since the law took effect on February 21, 2025, now is the time. Michigan sick time laws remain a top compliance issue for employers and enforcement is active going into 2026.
Here are the five most common mistakes I see — and exactly what to do about each one.
Mistake #1 — Assuming Your Old Paid Medical Leave Act Policy Still Works
This is the most widespread mistake I encounter. Many Michigan employers updated their policies when the Paid Medical Leave Act was in place and assumed that same policy carried over automatically. It did not.
The ESTA replaced the PMLA entirely, taking effect on February 21, 2025. The two laws have meaningfully different requirements around accrual rates, eligible employees, carryover caps, notice requirements, and documentation standards. A PMLA-compliant policy is not automatically an ESTA-compliant policy.
What to do: Pull your current sick time or PTO policy and compare it line by line against ESTA requirements. If your policy was written before February 2025 and has not been formally updated since, assume it needs revision. An existing PTO policy can satisfy ESTA requirements — but only if it provides equal or greater benefits and meets all usage, documentation, and notification standards under the amended law.
Mistake #2 — Getting the Accrual Rate or Cap Wrong
ESTA has a specific accrual formula and employers are getting it wrong in both directions — either accruing too slowly or capping usage incorrectly.
Under the amended ESTA, employees accrue paid sick time at a rate of one hour for every 30 hours worked. Large employers — those with 11 or more employees — must allow up to 72 hours of earned sick time usage per year. Small employers with 10 or fewer employees may cap usage at 40 hours per year.
Employers can limit both annual use and carryover to the applicable cap — 72 hours for large employers and 40 hours for small employers — but carryover of unused time into the next benefit year is required under the accrual model.
The frontload model is an alternative — employers can grant the full year’s allotment at the beginning of the benefit year, but time granted up front must be available for use immediately with no waiting period, and special notice rules apply.
What to do: Confirm your payroll and time-tracking system is calculating accrual at exactly one hour per 30 hours worked. Confirm your annual usage cap matches the correct threshold for your employer size. And if you are using the frontload model, make sure you have followed the required notice procedures.
Mistake #3 — Miscounting Your Employees and Using the Wrong Rules
This one catches employers by surprise more often than any other. You may think you are a small employer — and qualify for the more lenient 40-hour cap and the October 1, 2025 compliance deadline — but you could actually be a large employer under ESTA without realizing it.
Whether you count as a small or large employer is not based solely on your Michigan workforce. Headcount includes all employees nationwide — full-time, part-time, temporary staff, and even individuals provided by staffing agencies. If an employer has 11 or more workers for at least 20 workweeks in the current or prior calendar year, it is considered a large employer and must stay in that category through the end of the following year.
What to do: Count every worker — not just full-time Michigan employees. Include part-time workers, temporary staff, and agency workers in your total. If that number reaches 11 or more for 20 or more workweeks, you are a large employer and the 72-hour cap and February 21, 2025, compliance date apply to you — not the small employer rules.
Mistake #4 — Missing the Required Notice and Posting Obligations
Compliance is not just about having the right policy. ESTA has specific notification requirements that many employers have either missed entirely or completed incorrectly.
Effective February 21, 2025, the Earned Sick Time Act requires employers to display a poster created by the Michigan Department of Labor and Economic Opportunity in a conspicuous place accessible to employees.
Notices must be available in English, Spanish, and any language spoken by at least 10 percent of the workforce.
Employers must also provide employees with written notice of how the employer measures the benefit year — meaning you must tell employees which 12-month period you are using to track accrual and usage.
For new hires, notice obligations apply at the time of hiring — not just at the annual policy distribution.
What to do: Confirm the required ESTA poster is displayed in a visible, accessible location at every worksite — including any remote or satellite locations. Confirm the poster is in English and Spanish at minimum. Audit your new hire onboarding process to ensure ESTA rights are communicated at the time of hire. And make sure employees know which benefit year your organization uses to measure their accrual and usage.
Mistake #5 — Retaliating Against Employees Who Use ESTA Leave — Even Unintentionally
This is the most legally dangerous mistake on this list — and it is happening in organizations that have no intention of doing anything wrong.
Retaliation under ESTA does not require malicious intent. An attendance policy that counts ESTA-protected absences as unexcused. A manager who makes a comment about an employee taking too much sick time. A performance review that references sick leave usage. All of these can constitute retaliation under the law.
Retaliating or discriminating against an employee who exercises their right to request or use earned sick time is prohibited — and retaliation includes actions such as denying time off, suspending, or terminating an employee.
Additionally, employers cannot require employees to search for or secure a replacement worker as a condition of using earned sick time.
What to do: Review your attendance and disciplinary policies for any language that could be interpreted as penalizing ESTA-protected leave. Train every manager and supervisor on what ESTA leave looks like, when it applies, and what they are prohibited from saying or doing in response to an employee using it. Manager behavior is where most retaliation claims originate — not written policy.
The Bottom Line
ESTA compliance is not a one-time checkbox. Michigan sick time laws are not optional and enforcement is active. Employers should treat ESTA compliance as a standing operational requirement — not a one-time update.
The organizations that get this right are the ones that have reviewed their policies, trained their managers, confirmed their accrual calculations, and posted the required notices. The ones that get it wrong are the ones that assumed their old policies were good enough.
If you are not confident that your organization is fully compliant with ESTA as of March 2026, that uncertainty itself is a risk worth addressing.
Is Your Organization ESTA Compliant?
Expert Human Resources LLC conducts HR compliance audits for Michigan employers that want to find the gaps before a complaint or enforcement action does. We review your sick time policies, accrual practices, notice compliance, and manager training against current ESTA requirements and deliver a clear findings report with prioritized recommendations.
If you would like a confidential conversation about where your organization stands, reach out today.
www.experthumanresources.com | (810) 813-8732
Vanessa G. Nelson, CLRL is the Founder and President of Expert Human Resources LLC and the author of 101 Costly HR Mistakes and How to Fix Them. She specializes in HR compliance audits, workplace investigations, and risk assessments for organizations across Michigan and nationwide.
Disclaimer: This blog post is provided for informational purposes only and does not constitute legal advice. Employers should consult with qualified legal counsel regarding their specific compliance obligations under the Michigan Earned Sick Time Act.
