FAQs
Current Status of the Law
Is there reason to believe parts of the ESTA law will change? Or is the MI Supreme Court Ruling the final end all be all?
What we know as of August is Michigan Republican Legislators want to negotiate a compromise to this law. The Democratic Legislators and the Governor have said they want to study the ramifications of this law before any amending.
ASE recommends it members reach out to their Michigan Legislators and request they work toward a revised paid sick leave law that does not impact small employers and gives larger employers more leeway to use paid time off already provided toward compliance with this law.
Coverage
What employers are covered by ESTA?
The Act applies to all employers, regardless of size. “Employer” is defined as “any person, firm, business, educational institution, nonprofit agency, corporation, limited liability company, government entity, or other entity that employs one or more individuals, except that employer does not include the United States government.” There are different requirements for accrual and paid leave for employers with 1-9 employees and those with 10 and above.
What may an employee take paid time off for?
ESTA allows employees to have paid sick leave for any of the following:
(1) Physical or mental illness, injury, or health condition of the employee or his or her family member;
(2) Medical diagnosis, care, or treatment of the employee or employee’s family member;
(3) Preventative care of the employee or his or her family member;
(4) Closure of the employee’s primary workplace by order of a public official due to a public health emergency;
(5) The care of his or her child whose school or place of care has been closed by order of a public official due to a public health emergency;
(6) The employee’s or his or her family member’s exposure to a communicable disease that would jeopardize the health of others as determined by health authorities or a health care provider;
(7) Meetings at a child’s school or place of care related to the child’s health or disability.
Are any employees exempt from coverage of ESTA?
No Exemptions – All employees (exempt and non-exempt/hourly) and employees that work out of state and certain seasonal, part time, temporary, contingent, variable hour, and possibly independent contractor employees. This also includes employees working under a visa. This Michigan law does not cover U.S. government workers.
Does ESTA cover Collective Bargaining Agreements (CBAs)?
ESTA says: “If an employer’s employees are covered by a collective bargaining agreement in effect on the effective date of this act, this act applies beginning on the stated expiration date in the collective bargaining agreement, notwithstanding any statement in the agreement that it continues in force until a future date or event or the execution of a new collective bargaining agreement.”
If an employer’s offices are out of state, but the employee is working remotely in MI, does the employer have to provide this benefit to that employee?
If the employee is working in Michigan they have to be provided ESTA benefits.
Covered Family Members
What family members may an employee use this paid time off to care for/attend to?
“Family Member” is an employee’s child, parent, spouse, grandparent, grandchild, and sibling, plus “domestic partner” and any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship. As currently understood this would include domestic partners.
Benefit
What benefit must an employer provide?
Employees must accrue one (1) hour of paid sick leave for every thirty (30) hours worked.
- In companies with ten (10) and over employment, accrual of paid sick time would be up to seventy-two (72) hours of paid time off per year.
- In companies with fewer than ten (10) employees, employees are entitled to forty (40) hours of paid leave and thirty-two (32) hours of unpaid leave per year.
Accrual and Use of Benefit
What are the accrual requirements under ESTA?
ESTA states employers must accrue 1 hour for every 30 hours worked.
How much may employees accrue yearly?
All employees – full-time, part-time, and seasonal – are entitled to accrue seventy-two (72) hours of paid leave per calendar year. For employers with fewer than 10 employees, the 72 hours is divided between forty (40) hours of paid leave and thirty-two (32) hours of unpaid leave.
Even if an employee, either exempt or non-exempt, worked 52 weeks at 40 hours a week, they would accrue less than 72 hours. If an employee works 52 weeks at 40 hours per week, can we only provide them with the true amount they would accrue or is the minimum that we have to provide them to take as paid time off 72 hours?
As far as the law currently states, true hours. By year two they should have the 72 hours in their bank assuming they use none or have de minimus usage Remember, they can use up to and earn up to 72 hours of paid sick leave a year. Employers have the flexibility to determine the definition of a year, as the law says a “year shall mean a regular and consecutive twelve-month period, as determined by an employer.”
When does accrual start?
Immediately upon employment.
Exempt salary employees will be presumed to work 40 hours in each week unless their normal work week is usually less than 40. What if they are normally scheduled to work less than 40 hours per week?
If the workweek is 37.5 hours or 35 hours, it should be documented. Accrual will still follow the 30 hours for 1 hour (see above).
What if the exempt employee works more than forty (40) hours in a week?
The employer must track actual hours worked when calculating the accrual of ESTA sick time off. An employee who is exempt from overtime under the FLSA is “assumed to work 40 hours in each workweek, unless the employee’s normal work week is less than 40 hours, in which case earned sick time accrues based upon that normal workweek.”
Employers ONLY have to count worked hours towards accrued ESTA paid time. Employers do not have to count vacation time or any other paid time off as qualifying hours for ESTA accrual. But if an employer wanted to count other paid time off, they can. Correct?
Correct. An employer may choose to allow time to accrue when an employee is on vacation/other leave, but the ESTA does not seem to require it. The Act says an eligible employee must accrue paid medical leave at a rate of at least one hour of leave for every 30 hours worked up to 72 hours per benefit year. In other words, if they aren’t working because of vacation or a holiday, they do not need to accrue the time. It is up to the employer.
Does this mean overtime hours must be counted toward the accrual of benefits?
Yes.
Can an employer decrease the amount of vacation time an employee is eligible for and move it to the ESTA paid time off bucket instead or provide more paid time off from the company budget to comply with giving 72 hours of paid ESTA time?
Yes.
Do we need a separate ESTA bank or can we use a combination of PTO, Vacation, and/or Sick time to comply with the law?
ESTA allows any paid time to fulfill the requirements so long as the time can be used for the purposes permitted by the ESTA. Vacation, personal time, and an all-purpose PTO bank can all count towards the 72-hour requirement for larger employers or the 40-hour requirement for smaller employers. But the law is unclear. In addition, the ESTA time must carryover year to year.
While ESTA provides the employer is in compliance “if the employer provides any paid leave, that may be used for the same purposes and under the same conditions provided in this act and that is accrued in total at a rate equal to or greater than the rate described….”, the “under the same conditions” language is problematic. Employers are advised to carefully study what might need to change with their existing paid time off (PTO) policies if wishing to proceed with combining ESTA leave with paid time off (PTO) or other banks of leave time. It would seem the ESTA limits the types of restrictions employers can put on all leave time when choosing this option (e.g., would prohibit employers from requiring advance notice, mandating that vacation/personal time be used in half day/full day requirements, etc.).
In what increment of use can an employee receive paid sick leave?
ESTA has to be used in the smallest increment that the employer’s payroll system uses to account for absences or use of their other time.
When is a new employee eligible for leave under ESTA?
Unless the employer’s policy state otherwise, an employee may take ESTA leave once time is earned. ESTA does allow employers to have a policy requiring new employees wait until the 90th calendar date after commencing employment to begin using their time, but they must begin accruing upon hire.
What is the benefit year for accrual of ESTA paid time off?
A “year” shall mean a regular twelve (12) month period as determined by the employer.
Does an employer have to pay out unused accrued sick time at the end of the year or when an employee terminates?
No.
Accrual Method Versus Front Loading Method
NOTE: ESTA DOES NOT ADDRESS FRONT LOADING OF BENEFITS AS THE MICHIGAN PAID MEDICAL LEAVE ACT DOES.
If a company keeps vacation time and sick time separate, is it true the company cannot front load ESTA paid hours?
Front loading of benefits is not addressed in ESTA. Paid Time Off (PTO) or sick time has to be the same terms as ESTA, otherwise an employer will need establish a separate bank for that.
If we decide not to front load hours and do a regular weekly accrual, can we still allow employees to use up to 72 hours in a 12 month period before they have officially accrued it?
Yes you can. The question of the negative bank is unclear at this time.
Carryover of Unused Sick Leave
Must an employer allow the employee to carryover unused sick leave into the following year?
Carryover is required in all cases. There is no cap on the amount of unused ESTA time off that can be carried over from year to year. However, there is a cap on the amount of paid accrued sick time that can be used from year to year of seventy-two (72) hours for employers over 10 employees and a cap of forty (40) hours for employers under 10 employees in size.
Benefit Upon Termination of Employment
Does an employer have to pay out unused paid sick leave upon termination (voluntary or involuntary) of employment?
No, the law states that the employer is not required to provide financial or other reimbursement to an employee for accrued earned sick time that was not used upon the employee’s termination, resignation, retirement, or other separation form employment.
Documentation
What does ESTA allow the employer to require in the form of notification and documentation?
The Act requires seven days’ notice for use if the reason is foreseeable. If the reason for use is unforeseeable or not possible, notice must be provided “as soon as practicable.”
The ESTA specifies: “If the employee’s need to use earned sick time is foreseeable, an employer may require advance notice, not to exceed 7 days prior to the date the earned sick time is to begin, of the intention to use the earned sick time. If the employee’s need for the earned sick time is not foreseeable, an employer may require the employee to give notice of the intention as soon as practicable.” An employer may not require an employee to search for or secure a replacement worker.
In practice, this language will require employers to dispose of their existing notice, procedural, and documentation requirements for requesting sick time. In fact, many believe this language is ripe for abuse and will provide employees with up to 72 hours of no-notice, intermittent leave time each calendar year. Employers’ hands will be tied (i.e., no discipline allowed; see “rebuttable presumption”) as it relates to situations where an employee is a “no call, no show” for up to three days.
What documentation can be requested from the employee?
Under ESTA, “for earned sick time of more than 3 consecutive days, an employer may require reasonable documentation that the time has been used for a purpose [described in the act.] Upon the employer’s request, the employee must provide the documentation to the employer in a timely manner. The employer shall not delay the commencement of earned sick time on the basis that the employer has not yet received documentation. Documentation signed by a health care professional indicating that earned sick time is necessary is reasonable documentation…”
It also says: “An employer shall not require that the documentation explain the nature of the illness or the details of the [domestic] violence.”
Under ESTA an employer may only ask for documentation after the employee has been sick for 3 consecutive days. The employer may not require information about the nature of illness/ injury on paperwork. This contradicts FMLA laws. Correct? Employers (Human Resources) cannot determine if someone qualifies for FMLA if we don’t know the disability.
Yes, if it qualifies, it can run concurrently. Therefore the FMLA paperwork is still required (and same with ADA requirements). State law cannot trump federal law. The ESTA does not specify how often an employer may request documentation if sick leave extends for more than three consecutive days, but use caution: only request as much information as you need to substantiate the absences.
Documentation that sick time is necessary will be limited to a generic statement by a health care professional – nothing more.
What documentation can an employer ask for if the reason for the absence is domestic violence or sexual assault?
Documentation may be a police report indicating the employee or the employee’s family member was a victim of domestic violence or sexual assault. A signed statement from a victim and witness advocate affirming that the employee or employee’s family member is receiving services from a victim services organization. Or a court document indicating that the employee or the employee’s family member is involved in legal action related to domestic violence or sexual assault.
Documentation may not require disclosure of details relating to domestic violence or sexual assault.
If the employer does require medical documentation, is it true that the employer must pay any out of pocket costs incurred by employee in securing medical documentation. Is this correct and what does this mean exactly?
Under the law, if an employer chooses to require documentation, ESTA states that “the employer is responsible for paying all out-of-pocket expenses the employee incurs in obtaining the documentation. If the employee does not have health insurance, the employer is responsible for paying any costs charged to the employee by the health care provider for providing the specific documentation required by the employer.”
Recordkeeping
How should an employer maintain records of time taken under ESTA?
Employers should maintain hours worked and time off for non-exempt employees under their normal hours worked and attendance recording method. Tracking and recording exempt employee use of paid leave should ensure the employer accurately tracks the use of paid time off under the law.
How long should an employer maintain records of time taken under ESTA?
Employer shall retain records of hours worked and earned sick time take by employees for three (3) years.
Unlawful Retaliation/Interference
What rights does the law create for the employee?
ESTA says: “An employer or any other person shall not interfere with, restrain, or deny the exercise of, or the attempt to exercise, any right protected under the act.” It also says: “An employer shall not take retaliatory personnel action or discriminate against an employee because the employee has exercised a right protected under this act. Right protected by this act include, but are not limited to, the right to use earned sick time pursuant to this act, the right to file a complaint or inform any person about any employer’s alleged violation of this act, the right to cooperate with the department in its investigations of alleged violations of this act, and the right to inform any person of his or her rights under this act.”
What if an employer disciplines or discharges an employee due to attendance?
If the discipline or discharge can be shown to have resulted from an employee’s use of ESTA benefits the law prohibits retaliation or interference. ESTA specifies: “An employer’s absence control policy shall not treat earned sick time taken under this act as an absence that may lead to or result in retaliatory personnel action.”
We have an attendance policy that tracks all absences and assigns points to every absence or tardiness. If the employee takes too many absences, they are disciplined up to discharge. Would this be considered retaliation under ESTA?
Yes, an employer’s absence control policy shall not treat earned sick time taken under this act as an absence that may lead to or result in a retaliatory personnel action.
What if an employee is disciplined or discharged after an ESTA covered absence. Could a complaint be made against the employer?
ESTA states there is a rebuttable presumption of a violation of ESTA if an employer takes an adverse employment action against a person within ninety (90) days after that person does any of the following;
-
- Files a complaint with the department of licensing and regulatory affairs or court alleging a violation of the act.
- Informs any person about an employer’s alleged violation of the act.
- Cooperates with the department of licensing and regulatory affairs or another person in the investigation or prosecution of any alleged violation of the act.
- Opposes any policy, practice or act that is prohibited under this act.
- Informs any person of his or her rights under this act.
Can an employee file a private cause of action under ESTA?
Yes. The ESTA also creates a private right of action (PRA), in addition to its administrative process through the state. Remedies available to employees include reinstatement, attorney fees, and all back pay and benefits (doubled as liquidated damages). The PRA language creates massive liability exposure and the opportunity for abusive lawsuits class action litigation.
Penalties for Non-Compliance
What penalties does the law prescribe for non-compliance?
The law assumes the employee’s side for unfavorable personnel actions, putting employers in a position of having to defend their decisions in court. The law creates a private right of civil action for workers and two rebuttable presumptions against employers. Remedies available to employees include reinstatement, attorney fees and all back pay, and benefits (doubled as liquidated damages).
How long does an employee have to bring a civil action against an employer for violation of ESTA?
Any time within three (3) years after the violation or the date the employee knew of the violation.
Miscellaneous
Do I need new labor law posters?
Yes, like the minimum wage law, employers must display conspicuously at their places of business a poster that contains compliance information. Some employers may need to post in Spanish, in addition to English.
What information do I need to communicate with employees?
You must provide written notice to each employee at the time of hiring or a specific date (TBD) by the State including:
(1) the amount of earned sick time required to be provided under the act;
(2) the employer’s choice on how to calculate a “year”;
(3) the terms under which earned sick time may be used;
(4) that retaliatory personnel action by the employer against an employee for requesting or using earned sick time is prohibited; and
(5) the right of employees to bring a civil action or file a complaint with the State for any violation of the act.
What if an employee is rehired or is transferred; must his/her time accrued be reinstated?
Yes, the ESTA specifies “[i]f an employee is transferred to a separate division, entity, or location, but remains employed by the same employer, the employer shall retain all earned sick time that was accrued at the prior division, entity, or location and may use all accrued earned sick time as provided… If an employee separates from employment and is rehired by the same employer within 6 months of the separation, the employer shall reinstate previously accrued, unused earned sick time and shall permit the reinstated employee to use that earned sick time and accrue additional earned sick time upon reinstatement.”