Blog/Events

Screen_Shot_2018-12-28_at_12.43_.03_PM_.png

Compliance Bulletin: Michigan Scales Back Paid Sick Leave Law

December 28, 2018
Employee Benefits,

On Dec. 14, 2018, Michigan substantially amended its Paid Medical Leave Act (Act), which requires employers to provide paid sick leave to eligible employees beginning in March 2019. Key changes to the Act include the following:

  • The paid sick leave requirements only apply to employers with 50 or more employees (instead of all employers);
  • Employees accrue one hour of paid sick leave for every 35 hours worked (instead of 30 hours);
  • and Employers may limit employees’ use of paid sick leave to 40 hours per year (instead of 72 hours).

This Compliance Overview summarizes Michigan’s paid sick leave requirements, as amended.

ACTION STEPS

Michigan employers with 50 or more employees should become familiar with new paid sick leave law. Although the changes to the law minimize its impact on employers, employers will still need to update their paid leave and attendance policies for the law’s requirements.

Background

The Act was a ballot initiative enacted by the Michigan legislature on Sept. 5, 2018. The legislature adopted the Act in order to prevent it from being included on the ballot in the November 2018 general election. This approach made the law easier to amend.

As expected, the Act was amended by the Michigan legislature to scale back the law’s compliance requirements for employers. The amendments were signed into law by Governor Rick Synder on Dec. 14, 2018. These changes are controversial, especially because they were passed during the legislature’s lame-duck session. It is possible that there will be a legal challenge to the amended law.

Key Changes

The following chart summarizes key changes made to the ballot proposal by Michigan legislature:

Covered Employers

Employers that have 50 or more employees must comply with the Act’s paid sick leave requirements.

Covered Employees

All employees are entitled to accrue and use paid sick leave, except for the following categories of exempt employees:

  • Employees who are exempt from the FLSA’s overtime requirements as executive, administrative, professional or outside sales employees;
  • Employees who are covered by a collective bargaining agreement;
  • Employees whose primary work location is outside of Michigan;
  • and Variable-hour employees, seasonal employees and part-time employees.

A part-time employee is an employee who worked, on average, fewer than 25 hours per week during the immediately preceding calendar year.

Accrual of Paid Sick Leave

Eligible employees must accrue a minimum of one hour of paid sick leave for every 35 hours worked, up to 40 hours per year. An employer may limit an employee’s paid sick leave accruals to one hour per calendar week. Employees begin to accrue paid sick leave upon the Act’s effective date or upon hire, whichever date is later. Employees do not accrue paid sick leave for hours taken off work for paid leave—including paid vacation days, paid personal days and paid time off—unless otherwise permitted by the employer.

As an alternative to the paid sick leave accrual requirements, an employer may provide at least 40 hours of paid sick leave to an eligible employee at the beginning of a benefit year. An employer may prorate paid sick leave for eligible employees who are hired during the benefit year. If an employer provides at least 40 hours of paid sick leave at the start of each benefit year, it is not required to allow employees to carry over any unused paid sick leave to another benefit year.

Use of Paid Sick Leave

Employers may limit employees’ use of paid sick leave to 40 hours per year. Also, employers may require employees to wait 90 calendar days after beginning employment to start using accrued paid sick leave.

Employers must permit employees to use accrued sick leave due to any of the following reasons:

Paid sick leave must be used in one-hour increments, unless the employer has a different increment policy and the policy is in writing in an employee handbook or other employee benefits document.

Family Member

For purposes of paid sick leave use, an employee’s “family member” includes the following individuals:

  • A biological, adopted or foster child, stepchild or legal ward, or a child to whom the employee stands in loco parentis;
  • A biological parent, foster parent, stepparent, adoptive parent or a legal guardian of an eligible employee, an eligible employee’s spouse, or a person who stood in loco parentis when the eligible employee was a minor child;
  • A person to whom the eligible employee is legally married under the laws of any state;
  • A grandparent or grandchild; and A biological, foster or adopted sibling.

Employee Notice and Documentation Requirements

When requesting paid sick leave, an eligible employee must comply with his or her employer’s usual and customary notice, procedural and documentation requirements for requesting leave. An employer must give an employee at least three days to provide the employer with documentation.

Payment of Paid Sick Leave

Employees must be paid at a pay rate equal to the employee’s normal hourly wage or, if greater, the minimum wage when the employee uses paid sick leave. An employer is not required to include overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay or gratuities in the calculation of an employee’s normal hourly wage. For employees who may earn varying hourly wage rates depending on the work performed, the “normal hourly wage” means the average hourly wage of the employee in the pay period immediately prior to the pay period that the employee uses paid sick leave.

Carryover, Termination and Rehire Rules

Employer Poster and Recordkeeping Requirements

Employers must conspicuously display a poster in the workplace that contains all of the following information:

  • The amount of paid sick leave that is required to be provided under the Act;
  • The terms under which paid sick leave may be used;
  • and Employees’ rights to file a complaint with the Department of Licensing and Regulatory Affairs (Department) for any violation of the Act.

The Department will create a model poster for employers to use to comply with this requirement. Employers must retain records of the hours worked and sick leave taken by employees. Employers must retain these records for at least one year.

Employer Paid Leave Policies

The Act includes a rebuttable presumption that employers that provide at least 40 hours of paid leave to eligible employees each benefit year are in compliance with paid sick leave requirements.