Chamber Advocacy Success: Earned Sick Time Act Amendments Pass Senate, To Become Law

At 11:18 pm on Feb. 20, the Michigan Legislature wisely heeded the business community’s advice and concerns by amending the Earned Sick Time Act (ESTA) and the tipped minimum wage provisions from the proposed 2018 voter-initiated laws. This is a victory for the Detroit Regional Chamber, its members, and the statewide business community. Legislative changes represent a necessary compromise between businesses and other stakeholder groups. While not representative of the entire business community’s wish list, the legislature’s actions will make employer compliance with the new acts much more bearable.

This issue has been top of mind for the Chamber since the Supreme Court ruling was handed down in July 2024. For months, the Chamber’s Public Policy and Business Advocacy team engaged in active discussions with peer business organizations and legislators to advise on changes to make this legislation more practical and business friendly. The team also hosted several informational presentations for members and the business community, shared resources and information to help businesses prepare for this significant change and set up a platform to gather questions from the business community to inform the feedback shared with legislators. The Public Policy and Business Advocacy team also testified in favor of key amendments in several committee hearings and rallied its members to reach out to legislators with their shared concerns about the impending policies. 

The Legislature made several important changes to ESTA, all of which were included in the letter that the Chamber sent and the testimony that the Chamber provided to committees.    

• Employers are allowed to front-load sick time for full-time employees if the time provided is at least 40 hours for small businesses and 72 hours for businesses larger than 10 employees. 

• Allow existing paid time off banks to count towards sick time if they provide the same usage that ESTA time would allow. 

• Requires employees to notify the employer if they are taking a sick day in compliance with a written policy that the employer must establish at the time of hire.  

• Removes rebuttable presumption in complaints filed against an employer. 

• Allows an employer to take adverse personnel actions if the employee used sick time for non-eligible time off. 

Several other technical changes were made to ESTA that will make compliance for employers more manageable, including the elimination of tracking if the employer frontloads, the elimination of a loophole that would have required sick time to be paid at rates higher than the employee’s base pay, and specified language for employees that are covered by a collective bargaining agreement. The Chamber is obtaining a final version of the package and will update the membership with a complete guide to ESTA in the coming days.  

The other actions the legislature took included right-sizing the minimum wage increase and preserving the tip credit that allows restaurants to succeed. This change resulted from ongoing advocacy from industry partners and restaurant staff to preserve tipped wages in the state and prevent increased costs to the restaurant industry. 

As always, employers’ voices are critical to influencing legislators’ views on policy matters. The Chamber applauds its members for their willingness to inform and educate policymakers about the importance of resolving this issue. All Michigan employers will benefit from the collective impact of Chamber members.