Michigan Scales Back Paid Sick Leave Law

OVERVIEW

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:

Provision Ballot Proposal Amended Law
Covered Employers All employers that employ one or more employees in Michigan. No exception for small employers. Only applies to employers that have 50 or more employees. Employers with fewer than 50 employees are exempt.
Eligible Employees Virtually all employees are entitled to accrue and use paid sick leave. The following employees are not entitled to paid sick leave:

·         Employees who are exempt from the Fair Labor Standards Act’s (FLSA) overtime requirements as executive, administrative or professional employees or outside salespersons;

·         Employees covered by collective bargaining agreements;

·         Employees who work in other states; and

·         Variable hour, seasonal and certain part-time employees.

Accrual and Use Employees accrue one hour of paid sick leave for every 30 hours worked. Employees can use up to 72 hours of paid sick year per year. Unused leave must be carried over to the next year, with no limit. Employees accrue one hour of paid sick leave for every 35 hours worked. Employers may limit accruals to one hour per week. Employers can limit carryovers of unused leave to 40 hours per year. Employers may limit employees’ use of paid sick leave to 40 hours per year.
Employee Notification When an employee’s need to use paid sick leave is foreseeable, employers may require advance notice of up to seven days prior to the date paid sick leave is intended to start. Employers may require employees to comply with the employer’s usual and customary notification, procedural and documentation requirements for requesting leave.

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:

1 An employee’s own mental or physical illness, injury or health condition (including the need for medical diagnosis), care or treatment and preventive medical care
2 A family member’s mental or physical illness, injury or health condition (including the family member’s need for medical diagnosis), care or treatment and preventive care
3 Closure of the employee’s primary workplace by order of a public official due to a public health emergency or closure of an employee’s child’s school or place of care by order of a public official due to a public health emergency, or when it has been determined by health authorities that the employee’s or the employee’s family member’s presence in the community would jeopardize the health of others due to a communicable disease
4 If an employee or an employee’s family member is a victim of domestic violence or sexual assault, to obtain medical care, psychological or other counseling for physical or psychological injury or disability, or to:

Obtain services from a victim services organization

Relocate due to domestic violence or sexual assault

Obtain legal services or participate in any civil or criminal proceeding related to or resulting from the domestic violence or sexual assault

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

 

Employees must be permitted to carry over unused, accrued paid sick time from year to year, up to a limit of 40 hours per year. This carryover requirement does not apply when an employer provides eligible employees with at least 40 hours of paid sick leave at the start of each benefit year.
Employers are not required to pay out an employee’s accrued, but unused, paid sick leave upon termination, resignation, retirement or other separation of employment.
An employee who is rehired is not entitled to have his or her paid sick leave reinstated.

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.

For more information and assistance contact Sue Justice at sue@emerybenefitsolutions.com

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