Businesses fear worst from Michigan’s new sick time law. Will lawmakers act?

• Nearly all workers in Michigan will be covered under a new paid sick leave law that takes effect in February 2025
• The Michigan Supreme Court made the change along with a recent change to minimum wage, reversing a 2018 legislative action 
• Business leaders want changes and say Michigan’s rule would be the most stringent in the U.S.

LANSING — Michigan is readying an expanded paid sick time law that will cover nearly all employees in the state and become one of the most sweeping in the nation when it takes effect early next year.

To worker advocates, the changes resulting from a recent court ruling are long overdue and will help the 1 in 5 workers who now have no sick-leave benefits.

“Everybody is going to catch a cold, everybody is going to get sick at some point or another, and so we have to be able to allow people to take time off and be able to pay their bills,” said Aisha Wells, co-deputy director of Mothering Justice, a group that filed a lawsuit that resulted in the new rules.

But to business interests, the state’s rules add expensive bureaucracy and bookkeeping. They say the policy may actually hurt workers who already have sick leave benefits.

Related:

• Michigan minimum wage to rise, tipped wage to disappear, under blockbuster ruling
• Michigan seeks to delay minimum wage, paid leave hike amid court appeal
• Judge delays Michigan minimum wage increase until at least February
• Michigan plans $14.97 minimum wage by 2028 — but seeks court clarity first

Among other things, the new rules require businesses with 10 or more employees to provide up to 72 hours of paid sick leave per year and allow workers to accumulate unused benefits into new years. Smaller firms have to provide up to 40 hours of paid sick time. 

The rules are overly complicated and “go light years beyond just requiring paid sick leave,” Brian Calley, CEO of the Small Business Association of Michigan, told Bridge Michigan. 

Business groups want an exception for small firms, with Calley arguing the new rules strip firms of “the ability to to just run a punctual operation where there's some level of accountability for tardiness and no-shows at work.”

Caught in the middle is the Democratic-led Michigan Legislature. Business groups want the lawmakers to modify sick-time rules before they take effect Feb. 21, 2025. While there is no indication that will happen, some officials say some debate is likely soon.

“I expect conversations with stakeholders, caucus members, and colleagues in the Senate to continue over the next several weeks, but no specific decisions have been made regarding potential legislative action.” said Amber McCann, spokesperson for House Speaker Joe Tate, D-Detroit. 

“Stability is essential for workers and small-business owners, alike,” she said. 

‘Desperate for relief’

The changes came after the Michigan Supreme Court on July 31 ruled that the Republican lawmakers exceeded their authority in 2018, when they used an “adopt and amend” strategy that is unique to Michigan.

State law allows legislators to adopt legislation initiated by voter-signed petition drives before they go to the ballot for general election vote. 

Six years ago, lawmakers adopted a proposal to raise the minimum wage and require paid time off — then quickly changed it. They lowered the wage increases and made businesses with less than 50 workers exempt from sick time rules. They also capped required sick time to 40 hours per year.

But the Supreme Court ruled that lawmakers erred, ordering the state to implement the minimum wage increase and expand sick leave. 

Besides Michigan, 15 other states and Washington, D.C.  have laws about worker time off.  Among the most recent are Colorado, New Mexico and Minnesota. 

In addition to the 72 hours of paid sick time for employees of larger businesses, firms with fewer than 10 employees now must provide up to 40 hours of paid sick time per year. 

The rules also:

• Allow workers to sue if rights are denied
• Eliminate requirements to provide documentation if absences exceed three days
• Mandate accrued sick time at a rate of 1 hour for every 30 hours worked
• End "front loaded" sick time, such as at the start of a year 

The new law is “so complicated and has such dramatic ramifications that employers are just desperate for some kind of relief,” said Rob Boonin, labor and employment attorney in Ann Arbor.  

Calley agreed, saying some details of the law are onerous, including the strict accounting of time accruals and the lack of notice workers are required to provide to an employer when taking time off.

“That could have been so simple,” he said, adding “it’s as though they said, ‘How can we make offering sick leave as difficult as possible?’” 

James Berg, managing partner at the 180-employee Essence Restaurant Group in Grand Rapids, offers paid sick time, but said managing the new policy will cost another $20,000 per year.

For a small business operating on a 5% profit margin, that represents a significant amount, he said. 

So far, Berg said, he’s considering outsourcing human resources functions and also consulting a labor law attorney to keep his company prepared to comply. 

Meanwhile, flexibility has become a job-attraction tool, and the new rules appear to pull employers who exceed these regulations into the law’s “micromanaging,” Dave Worthams, director of employment policy for the Michigan Manufacturers Association, told Bridge.

Vacation time has to be separated from sick time, and the most lenient programs of “take sick time when you need it” will still have to move into the accrual system, experts said. 

“They may actually decrease the vacation bank to make sure that they have enough hours that they're providing in the sick pay bank,” Worthams said. “And I think as that shakes out, a lot of employees will be like, ‘What the heck just happened?’”

Workers 

Federal data shows that 78% of the private sector workforce has paid sick time, according to a 2024 study by The Center for American Progress, an nonpartisan policy institute based in Washington, D.C. That is up 1 percentage point from a year earlier.

Estimates from 2018 suggest that as many as one-third of Michigan workers are in jobs without a paid sick leave policy. 

Of the workers who do not have paid sick time, they are most likely to be part-time workers, among the lowest paid or working in this hospitality industry, advocates said. 

Jared Make, vice president of A Better Balance advocacy group, said those most impacted by new rules are “low wage workers and workers of color who were most likely to need paid sick time.”

The move can also benefit businesses, Make added, with stable productivity and less illness in the workplace. 

Wells, the co-deputy director of the Mothering Justice group, said she once worked at a retail job where she could not afford to stay home while sick. 

The new rules “finally recognize that people get sick, people have children, people have elderly family members, and so folks should not have to be choosing between those two things,” she said. 

What’s next? 

The Legislature is out of session until September, and this is an election year, so it’s uncertain how big of a priority sick leave changes could be this fall.

Asked for comment, a spokesperson for Gov. Gretchen Whitmer referred Bridge Michigan to remarks the governor made earlier this month where she said her team is “examining the court’s decision.” 

Michigan last week filed a brief with the Supreme Court indicating the state intends to increase minimum wage to $12.48 in 2025 and $14.97 by 2028, there is still no action on paid time off. 

Rosie Jones, spokesperson for Senate Majority Leader Winnie Brinks, D-Grand Rapids, also declined significant comment, saying lawmakers are “still looking at the court decision and evaluating the information we have.” 

Republican lawmakers are proposing modifications that face an uphill fight in Lansing. Sen. Thomas Albert, R-Lowell, introduced legislation to maintain the amended paid-time off law, including exempting businesses with fewer than 50 workers from sick time laws.

He said changes are needed to “avoid a catastrophe,” a sentiment echoed by Rep. Bill Schuette, R-Midland.

“We've been out of session since the end of June and this is a huge issue that is staring down a lot of businesses across our state … We need to get down to work on fixing this,” Schuette said.