Big changes have come to Michigan in 2025—and if you run a business or manage a team, you can’t afford to miss them.
As of February 21, 2025, new statewide Paid Time Off (PTO) laws are in effect, requiring nearly every Michigan employer to offer paid sick leave.
Whether you manage a small business or oversee a team in a larger organization, this guide will help you understand the law, stay compliant, and reduce admin stress using smart tools like Connecteam.
What Changed in 2025?
Michigan’s Earned Sick Time Act (ESTA) replaced the state’s older Paid Medical Leave Act. The new law expands access to paid sick leave across nearly all sectors and adds new rules on how time off is earned, tracked, and used.
Enacted under House Bill 4002, the law took effect on February 21, 2025.
🔗 Read the full law here (PDF)
Who Must Comply?
In short: just about every private-sector employer in Michigan.
The new law applies to:
- All businesses in Michigan with one or more employees
- Full-time, part-time, seasonal, and temporary workers
A few exceptions apply, including:
- Federal employees
- Unpaid interns or trainees
- Employees under 18 years old
- Workers who set their own hours and are not penalized for not working (e.g., true gig/flex workers)
If you’re a small business with 10 or fewer employees, you still must comply—but you have until October 1, 2025. Larger employers (11+ employees) needed to comply starting February 21, 2025.
Did You Know?
New businesses started in 2025 or later have a grace period of up to three years or until they reach 11 employees—whichever comes first.
How Do Employees Accrue PTO Under the New Law?
Under Michigan’s 2025 PTO law, employees earn 1 hour of paid sick time for every 30 hours worked. This includes overtime, remote work, and seasonal hours.
Here’s a breakdown by employer size:
| Business Size | Max Sick Time Required | Carryover Allowed | Frontload Option |
|---|---|---|---|
| 11+ employees | 72 hours annually | Yes (up to 72 hrs) | Yes |
| ≤10 employees | 40 hours annually | Yes (up to 40 hrs) | Yes |
Employees begin accruing time on day one, but you may require up to a 120-day waiting period before new hires can use their earned sick time.
Did You Know?
If you rehire someone within two months, their previous sick leave balance and waiting period carry over.
Can I Frontload Sick Time Instead of Tracking It?
Yes. Michigan employers can frontload the full 72 or 40 hours at the start of the benefit year. If you choose this route:
- You don’t have to track accrual or carry over unused time.
- You must “true up” part-time employees if they end up working more hours than expected.
This is often the simplest solution for small or seasonal businesses.
Pro Tip
If you frontload PTO and allow full flexibility in usage, you may not need to track accrual at all.
With a workforce management platform like Connecteam, you can automate frontloading and ensure part-time “true-up” adjustments are handled accurately.
Learn more about how to manage PTO with Connecteam.
What Can Employees Use Sick Time For?
Employees can use earned sick time for a wide range of reasons, including:
- Their own illness, injury, or preventive care
- Caring for a sick or injured family member
- Attending school meetings related to a child’s health or disability
- Public health emergencies that close a workplace or school
- Dealing with domestic violence, sexual assault, or stalking—such as getting medical help, legal services, or relocating
💡 The definition of “family member” is broad. It includes not just spouses, children, or parents, but also domestic partners and others with a close relationship “equivalent to a family relationship.”
What Are My Responsibilities as an Employer?
To stay compliant, Michigan employers must:
Provide Written Notice
Give every employee a written document outlining:
- How much sick time they can earn
- When and how it can be used
- Anti-retaliation rights
- The benefit year you use for tracking PTO
You must give this notice:
- To current employees within 30 days of Feb. 21, 2025
- To new hires upon onboarding
Did You Know?
If 10% or more of your staff speak a non-English language, and the state has a translation available, you must provide the notice in that language as well.
Post a Workplace Notice
Display the official Michigan Earned Sick Time Act poster somewhere visible.
🔗 Download the required poster from Michigan.gov
Track Accrual and Usage
You must track:
- Hours worked
- Sick time earned
- Sick time used
- Balances carried over (unless frontloading)
Records must be kept for at least 3 years.
Did You Know?
Connecteam automatically tracks accrual, carryover, and usage, so you’re always audit-ready.
Learn more about Connecteam’s PTO management feature.
Can I Use a General PTO Policy Instead?
Yes—if it meets the law’s requirements.
You can use a combined PTO bank (vacation + sick + personal days) instead of separate sick leave. However:
- Employees must receive at least 40 or 72 hours annually
- That time must be usable for all ESTA-covered reasons
- You cannot deny sick leave because it was already used for vacation
Pro Tip
Connecteam supports general PTO policies too—automating compliance while keeping things simple for both managers and employees.
Learn more about how to manage PTO with Connecteam.
Do I Have to Pay Out Unused Sick Time?
No. Michigan law does not require employers to pay out unused sick time when an employee quits or is terminated—unless your own policy says otherwise.
Vacation and personal time payout remains optional unless part of a written agreement.
Are Vacation and Personal Days Required?
No. The only mandatory paid leave under Michigan law in 2025 is sick time as defined by the Earned Sick Time Act.
Offering additional PTO, vacation days, or personal leave is completely up to you—but combining them into a compliant PTO policy can simplify things.
What Happens If I Don’t Comply?
Violating the law can be costly. The Michigan Department of Labor and Economic Opportunity (LEO) is in charge of enforcement.
- ❌ Denying sick leave: Fine up to 8x the employee’s hourly wage
- ❌ Retaliation (demotion, discipline, firing): Up to $1,000 per violation
- ❌ Failure to post notice: $100 per location
There is no private lawsuit right under this law—employees file complaints with the state.
Did You Know?
- If you rehire an employee within 2 months, their sick leave accrual and balance resume where they left off.
- Employers must “true up” frontloaded sick time for part-time workers if they end up working more than expected.
- Michigan’s minimum wage also increased to $12.48/hour as of February 21, 2025.
What Should I Do Next?
✅ Audit your current PTO policy
✅ Choose between accrual or frontloading
✅ Prepare and distribute your written notice
✅ Post the state-issued workplace flyer
✅ Train managers on proper sick leave handling
✅ Set up reliable time-off tracking and documentation
✅ Use Connecteam to automate PTO tracking, requests, and compliance
How Connecteam Helps You Stay Compliant
Tracking accruals manually or managing compliance across spreadsheets can get messy fast. Connecteam’s all-in-one platform makes it simple.
With Connecteam, you can:
✅ Automate PTO tracking based on Michigan law (e.g., 1 hour per 30 hours worked) and enforce annual usage caps
✅ Customize policies for small (≤10) and large (11+) businesses, including frontloading and carryover rules
✅ Simplify absence management with mobile app requests and manager approvals that help avoid scheduling conflicts
✅ Stay compliant in every state, with up-to-date PTO tools built for evolving rules in Michigan, Alaska, Missouri, Nebraska, and more
Try Connecteam for free and take the stress out of PTO compliance.
FAQs
Is vacation time required in Michigan?
No. The only required paid leave is for sick time under the Earned Sick Time Act.
Can I combine vacation and sick days into one PTO policy?
Yes, as long as it provides at least the required hours and can be used for all covered purposes.
Do I have to pay out unused sick leave when an employee leaves?
No, unless your internal policy says otherwise.
Do I need to post the law somewhere?
Yes. You must display the official poster in a visible workplace location. Get it here.
What if I just started my business?
New businesses have a 3-year grace period or until they reach 11 employees—whichever comes first.