Late on Thursday, February 20, 2025, the Michigan legislature passed (ESTA) that was otherwise set to take effect by court order the next day. The amendments were signed into law by Governor Gretchen Whitmer on Friday, February 21, 2025. Had the legislature and governor not acted, some very onerous provisions of the law would have gone into effect. The amendments which are effective immediately update the Michigan sick leave law as follows:

• Accrual basis. The accrual rate under the amended ESTA remains one (1) hour of sick leave for every 30 hours worked. There is no cap on accrual, but employers may cap usage at 72 hours per year. The amendments changed the law鈥檚 carryover provisions to allow employers to limit the amount of carryover to 72 hours for large employers (with over ten employees). For small employers, the accrual basis has also changed. Under the prior version of the law, small employers would have been required to provide up to 40 hours of paid leave and 32 hours of unpaid leave. The amendments no longer require 32 hours of unpaid leave. Small employers still must provide accrual of sick leave at the same rate (one (1) hour for every 30 hours worked) but may cap accrual of sick leave at 40 hours of paid leave.
• Front loading. Under the prior version of the law, frontloading was not contemplated, and the state鈥檚 guidance advised that, even if employer鈥檚 frontloaded paid sick leave, it must still reconcile with the amount the employee would have accrued and must carry over any unused sick leave year to year. Under the amended version now in effect, an employer may choose to frontload 72 hours of sick leave at the start of the benefit year. If frontloading, the employer is not required to carryover, track accrual, or pay out sick leave at the end of the year. Small businesses may front load 40 hours of sick leave.
  • For part-time employees, employers may frontload the amount of sick leave the employees would be expected to accrue under the one (1) hour of sick leave for every 30 hours worked method. In order to take advantage of this, the employer must provide notice to the employee of the expected number of hours, and the employer must provide extra time if the actual time worked is higher than predicted.
• Waiting period. Employers can who provide sick leave on an accrual basis may now require new employees to wait 120 days before they are permitted to use sick leave (rather than 90); regardless, employees must begin accruing sick leave on their first day of employment.
• Combining sick leave with a PTO policy. The amendments make clear that sick leave can be added to a PTO policy so long as the PTO policy provides at least the same amount of leave as the ESTA. The amendments clarify that PTO time can be used for sick leave purposes or any purpose and that employers are not required to provide additional sick leave if an employee uses PTO for another purpose.
• Rate of pay. The amended ESTA states that sick leave should be paid at the 鈥渘ormal hourly wage or base rate鈥� but not less than minimum wage. Overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, tips, and gratuities do not need to be included in the normal hourly wage/base rate.
• Notice requirements. If the need to use sick leave is foreseeable, the employer may require seven days鈥� notice. If the need for leave is not foreseeable, the employer may require the employee to give notice in either of the following ways: (1) as soon as practicable; or (2) in accordance with the company鈥檚 policy regarding use of sick leave as long as (i) on the date of hire, or effective date of the law or when the policy takes effect, the employer provides the written policy to employees; and (ii) the notice requirement allows the employee to provide notice after the employee is aware of the need for use of sick time.
  • An employer cannot deny the use of leave for not following the notice policy if the employer (1) did not provide a written policy; or (2) the employer made changes to the policy and did not provide notice of the policy change within five days of the change.
• Discipline. Employers can discipline employees for abuse of the sick leave policy or failure to follow the notice provisions.
• There is no private right of action for employees. Like Michigan鈥檚 prior sick leave statute, in effect since 2018, all complaints must go through the Michigan Department of Labor and Economic Opportunity. In addition, the rebuttable presumption of violation of the law, which would have otherwise come into effect on February 21, 2025, was also removed by these amendments.
• Collective Bargaining Agreements. If a collective bargaining agreement is in effect and conflicts with the ESTA, the amended 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). In other words, in the event of a conflict, any collective bargaining agreement that is in effect controls 鈥� until the expiration of the contract, at which time the provisions of the amended sick leave law will take effect.
• Increments of usage. The amendments permit the employer to choose either (1) one-hour increments or (2) the smallest increment the employer uses to account for absences of uses of other time. The key difference here from the prior version of the ESTA is the employer choice for increment and that it is what the 鈥渆mployer鈥� uses for absences, whereas the original ESTA mandated that the smaller of one hour or the smallest increment the employer鈥檚 payroll system should be used to account for absences.
• Doctor鈥檚 notes. Like the original ESTA, documentation may still only be requested of any employee after more than three consecutive sick days are used. However, the amendments added the requirement that requested documentation must be supplied by the employee within 15 days. The requirement to pay the out-of-pocket costs for obtaining a doctor鈥檚 note remains. 
• Notice to employees. Employers have 30 days to provide employees with written notice to each employee of the sick leave policy and this new law. Small employers have until October 1, 2025, to implement the changes.
• Exemptions.
  • The following types of employees are not entitled to sick leave: employees of the U.S. government; any employee who (1) sets his or her own schedule and (2) faces no punishment for not meeting a minimum amount of hours; unpaid trainees/interns; and minors.

The changes mark a significant departure from the Michigan sick leave requirements that have been in place since 2018 and the Earned Sick Time Act that would have otherwise taken effect on Friday, February 21, 2025. It is likely that employees are also tracking these changes and will ask questions regarding how policy change affect their ability to take sick leave and PTO generally. Employers should review their policies and ensure compliance with the provisions of the new law.

* A previous version of this article stated that nonprofit agencies are not subject to the sick leave law and that the 120 day waiting period may be used for both accrual basis and front loading policies. Since then, the state has clarified that it interprets the law to cover nonprofit organizations and that the 120 day waiting period is only permissible for accrual basis policies.

On July 31, 2024, the Michigan Supreme Court issued a decision that significantly changes the state鈥檚 paid sick leave and minimum wage requirements. In , the Court determined that a procedure used by the Michigan legislature with respect to the current versions of Michigan鈥檚 paid sick leave and minimum wage laws is unconstitutional, thereby reverting the laws back to the original ballot initiative versions, which differ significantly from current law.聽

In 2018, the Michigan legislature adopted two ballot initiatives as law, and then extensively amended them in the same legislative session, ultimately implementing laws that are very different from the original initiative. One ballot initiative, the Improved Workforce Opportunity Wage Act (IWOWA) proposed changes to Michigan鈥檚 minimum wage requirements, increasing the minimum wage generally and eliminating a longstanding exception for tipped employees, among other changes. 

The second ballot initiative implemented paid sick leave for Michigan workers, which was not mandated by law at the time. While it is settled that the legislature may adopt ballot initiatives as law and remove them from consideration by the voters as well as has the power to amend current law, the issue before the Court was whether the legislature can adopt a ballot initiative and also amend the same initiative in the same legislative session through a so-call 鈥渁dopt and amend鈥� process. The Supreme Court held that such a process is unconstitutional because it undermines the ballot initiative procedure outlined in the Michigan Constitution. 

While the details of legislative procedure may not seem of practical importance to the day-to-day operations of Michigan employers, the decision has a significant impact on requirements for paid sick leave and minimum wage. 

As a result of the decision, on February 21, 2025, the terms of the 2018 sick leave and minimum wage ballot initiatives are reinstated as law. The key changes are as follows:

More employers must provide paid sick leave. Under the prior law, in effect since 2019, employers with less than 50 employees are exempt from providing paid sick leave. Beginning in February 2025, all Michigan employers must provide it.

More employees are eligible for paid sick leave. While the prior law covered only full-time and non-exempt employees, now all employees are eligible for paid sick leave.

More sick leave must be provided. Reversion to the original ballot initiative means that eligible employees can accrue up to 72 hours of sick leave per year, instead of the prior 40 hours. 

Minimum wage will increase. The Court determined that the increase in minimum wage contemplated by the ballot initiative must be adjusted for inflation. As a result, the State Treasurer will issue a chart with the new minimum wage requirements in the coming weeks.  Minimum wage will increase to these pre-determined amounts through 2028 and will increase with inflation thereafter. It is estimated that the minimum wage effective in February 2025 will be between $12.36 and $12.50. 

Tipped employees will transition to standard minimum wage. Previously under the amended version of the IWOWA, tipped employees may earn 38% of the minimum wage, presuming that earned tips must supplement to reach full minimum wage. Beginning in February 2025, this exception will be phased out. The percentage of minimum wage permissible for tipped employees will increase each year, finally aligning with 100% of minimum wage in 2029. 

Efforts are underway, including by the Michigan Chamber of Commerce, to encourage the legislature to soften the blow of these changes for employers. However, the chance of significant rollback of the new employee benefits is doubtful given the current make-up of the legislature and the Governor鈥檚 office. While the above covers the main changes coming for Michigan employers, it is wise for employers to review the new requirements in detail to ensure they are prepared to be complaint with all requirements by February 21, 2025.  

On July 1, 2024, the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance (PLO or the 鈥淥rdinance鈥�) took effect. We previously reported on the Ordinance when it was announced in November 2023 noting that, as written, it lacked some crucial details. Fortunately, the Chicago Department of Business Affairs and Consumer Protection (BACP) published the final rules (the 鈥淩ules鈥�) interpreting the PLO in May 2024. Although they provide some clarity in terms of compliance obligations, the Rules are, overall, a bit of a mixed bag for employers. This article provides a brief recap of the Ordinance itself and breaks down how the BACP鈥檚 new Rules impact compliance obligations.

Chicago鈥檚 PLO: A Quick Refresher

The PLO requires most Chicago employers to provide covered employees with at least 40 hours of Paid Leave (PL) in addition to 40 hours of Paid Sick Leave (PSL). Employees are 鈥渃overed,鈥� and thus eligible to accrue PL and PSL, if they work at least 80 hours for an employer in any 120-day period while physically present within the geographic boundaries of Chicago. If an employee meets this threshold, they must accrue one (1) hour of PL and one (1) hour of PSL for every 35 hours worked. Employers may exceed the Ordinance鈥檚 minimum standards, so long as their policies meet the main requirements regarding accrual, carryover, and usage.

BACP鈥檚 New Rules

Remote Workers

Remote workers are covered by the Ordinance if they meet the above definition of a 鈥渃overed employee.鈥� Thus, no leave accrues for employees who do not physically work within Chicago, even if the employer is located there. However, remote workers who physically work within the city must accrue PL and PSL, even if the employer is located outside of Chicago (or in a different state).

Frontloading Versus Accrual

The Rules confirm that, for employers with accrual-based leave policies, employees must be allowed to carryover up to 80 hours of unused, accrued PSL and 16 hours of accrued, unused PL from one benefit year to the next. The upside for employers who 鈥渇rontload鈥� leave 鈥� providing all PL and PSL hours at the start of employment or when employees begin employment rather than following an accrual-based model 鈥� is that they need not follow the PLO鈥檚 carryover provisions with respect to PL. However, the Rules clarify that frontloading does not alleviate an employer鈥檚 PSL carryover obligations. In other words, up to 80 hours of unused PSL must carryover, regardless of whether it is accrued or frontloaded. If frontloaded, these 80 hours carryover on top of the 40 PSL hours provided to employees at the start of the benefit year or at the start of employment. Therefore, it is possible for some employees to start the year with 120 hours (or 15 days) of PSL if leave is frontloaded.

PTO Policies: Carryover and Waiting Periods

Given that the 80-hour PSL carryover rule applies regardless of whether leave is frontloaded,

frontloading employers who use a single bank of paid time off (PTO) instead of two separate banks of PL and PSL are in a tough spot. Because the Ordinance lacks exemptions for pre-

existing PTO policies, employers with such policies could run into issues in terms of staffing as those policies must comply with the Ordinance in its entirety 鈥� including the 80-hour PSL carryover provision. Thus, if employers frontload 80 hours of PTO (to account for 40 hours of PL and 40 hours of PSL), some employees could start the year with 160 hours (or 20 days) of PTO.

PTO policies are also more limited in terms of establishing waiting periods for using PTO. The Ordinance requires that employees be allowed to use PL beginning on the 90th calendar day of employment. PSL, however, may be used after the 30th calendar day. For employers with PTO policies, the more generous 30-day waiting period must apply.

Restricting Usage

In terms of usage, the Ordinance was silent as to how or when employers may restrict employees鈥� use of PL aside from requiring 鈥渞easonable pre-approval,鈥� but the Rules lay out a balancing test for determining when employers may deny requests for using PL based on 鈥渙perational needs.鈥�

Factors employers should consider if denying PL requests on this basis include whether:

1. Granting Pl during a particular time period would significantly impact business operations;
2. The employer provides a need or service critical to the health, safety, or welfare of the people of Chicago;
3. Similarly situated employees are treated the same for the purposes of reviewing, approving, and denying PL; and
4. The employee has 鈥渕eaningful access鈥� to use all PL to which the employee is entitled over the established benefit year. 鈥淢eaningful access鈥� in this context means that the employee has a reasonable ability to use accrued PL and PSL.

Providing some additional guidance, the Rules include a few helpful examples of whether PL usage restrictions are reasonable. A reasonable policy is one that allows employees to take PL on a Friday seven days from the request. However, the Rules indicate that a leave policy can have a 鈥渂lackout鈥� period. For instance, an employer may prohibit taking PL on a specific Friday if it is the busiest day of the employer鈥檚 year. An example of an overly restrictive policy is one that prohibits using PL on Mondays and Fridays.

Defining 12 Month Period 鈥� Benefit Year

From an administrative standpoint, the Rules allow more flexibility for employers to determine the 12-month period or 鈥渂enefit year.鈥� The benefit year can be based on, for example, the

calendar year, the fiscal year, or the employee鈥檚 work anniversary. In other words, employers can set different dates for each covered employee or choose to grant benefits to all covered employees at the same time.

Notice Requirements

In addition to guidance on frontloading, carryover, and usage, the new Rules specify how employers must comply with the PLO鈥檚 different notice requirements. The main two notices employers must provide include (1) a notice of their rights under the PLO (鈥淩ights Notice鈥�); and (2) a notice of the updated amounts of PL and PSL available for their use (鈥淎mounts Notice鈥�). There are several different requirements for providing the Rights Notice, but the main two include posting it in a conspicuous location and including it with the employee鈥檚 first paycheck and annually with a paycheck issued within 30 days of July 1. There are also multiple ways through which employers can provide the Amounts Notice, including 鈥� but not limited to 鈥� on pay stubs, through an online system, or by hand-written record.

Takeaways

Now that the Ordinance is in effect, employers should review their paid leave, paid sick leave, or PTO policies to ensure compliance with the both the PLO and the BACP鈥檚 new Rules. The Ordinance does permit employers to alter their policies, but they must provide employees with written notice within five days before any change (note that this notice period increases if the change affects compensation).

Employers who are unsure as to whether their policies are PLO-compliant 鈥� whether in terms of accrual, usage, carryover, or the notice requirements 鈥� should consult with counsel to determine the best way to implement any necessary updates.

Special thanks to Meredith McDuffie, a summer associate in 麻豆直播’s Chicago office, for their contributions to this article.

On December 14, 2023, the Cook County Board of Commissioners (鈥渢he Board鈥�) overhauled the 2017 Cook County Earned Sick Leave Ordinance, replacing it with the Cook County Paid Leave Ordinance (CCPLO or 鈥渢he Ordinance鈥�). The changes are a major shift from the previous ordinance which allowed employees working for an employer in Cook County to earn and use up to 40 hours of paid sick leave per year and outlined conditions under which that leave could be used (e.g., when the employee or their family member was ill, receiving medical care, etc.).

Now, effective December 31, 2023, employees working for an employer in Cook County will be entitled earn and use up to 40 hours of paid leave per year. The CCPLO brings Cook County in line with the Illinois Paid Leave for All Workers Act (鈥渢he PLAW Act鈥�), as it has substantially identical provisions.

Under the Ordinance, Cook County employers will be subject to the same requirements as employers falling under the PLAW Act.

• Accrual
  • Employees must be allowed to accrue paid leave at a rate of one hour for every 40 hours worked;
  • Employees must be allowed to use paid leave for any reason of the employee鈥檚 choosing;
  • Salaried, overtime-exempt employees are deemed to work 40 hours a week for accrual purposes, unless their regular workweek is under 40 hours, in which case paid leave accrues based on that regular workweek;
  • Hourly, non-exempt employees accrued paid leave based on hours; and
  • Employers may, but are not required to, allow more than 40 hours of paid leave to accrue per year.
• Use
  • Employees must be allowed to use accrued paid leave 90 days after the CCPLO takes effect, or after 90 days following commencement of employment, whichever comes later;
  • Employers may not require employees to provide a reason for the leave or provide documentation or certification as proof in support of the leave;
  • Employers may set a reasonable minimum increment for the use of paid leave not to exceed two hours per day, and if the employee鈥檚 scheduled workday is less than two hours per day, the employee鈥檚 scheduled workday is used to determine the amount of paid leave; and
  • Employers may not require employees to search for or find a replacement worker to cover the hours during which the employee takes paid leave.

• Carryover versus Frontloading
  • Unless employers frontload all 40 hours at the start of the benefit year or on the employee鈥檚 first day at work, up to 40 hours of unused, accrued paid leave must be permitted to carry over to the following benefit year.
  • If employers frontload, they are exempt from the carryover requirements and may require employees to use all paid leave before the end of the benefit year or forfeit the unused paid leave. However, frontloading employers must reload employees鈥� paid leave bank with the full 40 hours required under CCPLO at the start of the next benefit year.

• Notification
  • Employers must post a notice in a conspicuous place advising employees of their rights to paid leave under the Ordinance (the Cook County Commission on Human Rights (the 鈥淐ommission鈥�) will provide a form notice that satisfies this requirement);
  • Employers may establish reasonable paid leave policy notification requirements which may include:
    • Requiring employees to provide seven days鈥� notice before the date the leave is to begin, if the need to use paid leave is foreseeable; and
    • Requiring employees to give notice 鈥渁s soon as is practicable鈥� after becoming aware of the need to use paid leave, if the need to use paid leave is not foreseeable.
  • If employers change their paid leave policy notification requirements above, they must provide employees with written notice of those requirements within five calendar days of the change, along with the notice advising employees of their rights to paid leave under the CCPLO.

• Recordkeeping Requirements
  • Employers must make and preserve records documenting the following:
    • Hours worked by employees;
    • Paid leave accrued and taken; and
    • The remaining paid leave balance for each employee for a period of not less than three years.
  • Employers providing paid leave on an accrual basis must provide notice of the amount of paid leave accrued or used by employees upon an employee鈥檚 request.

Finally, an employer with an existing paid leave policy may comply with the CCPLO if it meets or exceeds the Ordinance鈥檚 requirements and provides that paid leave may be used for any reason. 

Notable distinctions between the PLAW Act and the CCPLO include the following:

• Unlike the PLAW Act, the CCPLO allows employees to file civil suits against employers who violate the Ordinance in addition to letting employees file complaints with Commission. The PLAW Act does not create a private right of action for employees but does allow them to file complaints with the Illinois Department of Labor.
• While both the PLAW Act and CCPLO permit employees covered under a bona fide collective bargaining agreement (鈥淐BA鈥�) to waive their respective requirements and exempt employees in the construction industry covered by a CBA, the CCPLO does not carve out employees covered by CBAs working in the parcel delivery industry, while the PLAW Act specifically exempts those employees.

The CCPLO will be enforced starting on February 1, 2024. Updated notices, FAQs, and the complaint form can be accessed through the as more information becomes available, so be sure to check back before January 1, 2024. As a reminder, the PLAW Act specifically exempts employers covered under a municipal ordinance that requires employers to provide employees with paid leave or paid sick leave. Thus, employers in Cook County will be subject to the CCPLO, not the PLAW Act.