Many employers have made the shift from traditional paid time off (PTO) policies allocating a specific number of days for vacation, sick and personal purposes to PTO banks, allowing employees to use their time off however they see fit. More expansively, some employers even offer flexible PTO policies providing for unlimited PTO. 

Though many employers are taking a broader approach to PTO, many states are mandating that employers provide a specific amount of paid sick leave to their employees. To date, almost 20 states have mandatory sick leave laws requiring that employers frontload or allow employees to accrue a specific number of sick leave hours on an annual basis. 

In Michigan, a recent Michigan Supreme Court ruling reinstated the Earned Sick Time Act, which requires employers with more than 10 or more employees to allow all of its employees in Michigan to accrue and use up to 72 hours of paid sick leave a year – significantly higher than most states, which only require 40 hours. This law is set to go into effect on Feb. 21, 2025.

Many Michigan employers who offer PTO banks or flexible PTO policies may question if their policy suffices or if they have to provide a separate sick time bank. An employer is compliant with this law if its paid leave policy allows employees to 1) accrue at least one hour of sick leave for every 30 hours worked and 2) take at least 72 hours of PTO for sick leave purposes, as provided by the law, including to care for themselves or their family members, during certain public health emergencies, and for certain purposes related to domestic violence, sexual assault or stalking. 

Employers whose policies may not be compliant should be sure to make updates in advance of the effective date.