LANSING – The Small Business Association of Michigan (SBAM) is putting small business owners across the state of Michigan on alert that a state law taking effect on October 1 has new reporting and compliance requirements – even for businesses who already offer paid time off for employees. While the law originally took effect in February, the Oct. 1 effective date is for businesses with 1-10 employees – commonly known as ‘microbusinesses’.
“Many small business owners already offer generous leave policies to their employees, but they still have to formalize their policies and maintain specific records,” said Brian Calley, President and CEO of SBAM. “Even businesses with as few as one or two employees must follow the new law, and many of them are still unaware they are impacted. We’re working to ensure all small business owners know and understand the main tenets of the new law, and we here at SBAM are offering resources to help them comply.”
To cut through the confusion, SBAM is providing the following tips:
- The new law applies to businesses of all sizes and all employees.
Even if a business only has a few employees, and/or all employees are family members, every business owner must follow the new requirements. This includes full-time, part-time, and temporary employees, including those provided through a temporary service or staffing agency or similar entity.
- Even if businesses already offer paid sick and leave time, new compliance practices are required.
Employers must provide written notice of an employee’s rights under ESTA at the time of hiring, post the requirements, and keep detailed records on hours worked and earned sick time taken for each employee for three years.
- Businesses do not have to create a separate “bank” for sick time – employees can use the same pool of hours for general PTO, vacation and sick leave.
Employers can keep their current paid time off policy, if it provides for a rate of leave accrual greater to or equal than what’s required by ESTA. This change in the law was advocated for by SBAM, as most employees and employers prefer one bank of time.
- Employers may require documentation for leave of more than three consecutive days.
An employer may require reasonable documentation that earned sick leave has been used for a permissible purpose. Upon request, the employee must provide this documentation not more than 15 days after the employer’s request.
- SBAM is offering compliance resources to all small businesses.
Members can join live webinars on September 18, September 29 and October 7 to have questions answered, and have access to a compliance hub with a customizable toolkit, including templates for leave policies and forms. Small business owners who are not currently SBAM members can also participate in the webinars for a nominal cost.
