Blog: CATCH-ing UP with the New Michigan Paid Medical Leave Act

Beginning on March 29, Michigan became the 11th state with a mandatory paid sick leave time law. The path to the current law started in September 2018, when a citizen-initiated ballot petition with the name of Earned Sick Time Act was adopted as-is by the Legislature. After the November 2018 election, the Legislature significantly revised the Earned Sick Time Act and renamed it the Paid Medical Leave Act (PMLA).
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Nhan Ho
Nhan Ho // Courtesy photo

Beginning on March 29, Michigan became the 11th state with a mandatory paid sick leave time law. The path to the current law started in September 2018, when a citizen-initiated ballot petition with the name of Earned Sick Time Act was adopted as-is by the Legislature. After the November 2018 election, the Legislature significantly revised the Earned Sick Time Act and renamed it the Paid Medical Leave Act (PMLA).

Michigan employers may now be left wondering about their obligations under the law. This note intends to provide a quick read to help employers CATCH UP with the PMLA.

Coverage

Not all employers are covered by the PMLA, as it only applies to private or public sector employers who employ 50 or more individuals. The PMLA also only provides paid medical leave benefits to certain “eligible employees.” As defined, “eligible employees” do not include volunteers, unpaid interns, and independent contractors from whom the employer is not required to withhold for federal income tax purposes. In addition, the PMLA provides for 12 specific employee exemptions, most notably overtime-exempt employees, employees who work primarily outside of Michigan, and employees who worked less than 25 hours per week on average in the preceding calendar year.

Amount

Once an employer has determined that it is covered by the PMLA and has employees who are eligible to receive benefits under the PMLA, the next step is to determine the amount of paid leave that must be provided.

Under the PMLA, eligible employees accrue one hour of paid medical leave for every 35 hours worked. However, covered employers can cap the accrual amount at one hour in a calendar week and 40 hours per benefit year. For the then-existing eligible employees, the accrual clock would start on March 29, 2019, and for the employees hired afterward, on the dates of employment. According to the Department of Licensing and Regulatory Affairs (LARA), eligible employees can carry over unused accrued paid medical leave from one benefit year to the next, but employers can cap the carry-over amount at 40 hours.

As an alternative, covered employers may provide at least 40 hours of paid medical leave to eligible employees at the beginning of the benefit year. For eligible employees who start employment mid-benefit year, the amount of leave time provided in this manner may be prorated. Employers electing this front-loading method are not required to allow eligible employees to carry over any unused paid medical leave to the next benefit year. Consequently, this option may be appealing to employers who do not want to bother with tracking carry over.

Paid medical leave must be paid at the rate that the eligible employees normally earn or the Michigan minimum wage, whichever is greater. Employers are not required to include overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, or gratuities when determining an eligible employee’s normal hourly wage or base wage.

The Permissible Use Purposes

Not only must covered employers provide eligible employees the required amount of paid medical leave, they must also allow eligible employees to use such leave for the permissible purposes specifically provided by the PMLA. These reasons include, on top of an employee or family member’s “medical” reasons, domestic violence or sexual assault, closure of workplace or child’s school/place of care due to a public health emergency, and exposure to communicable disease that would jeopardize the health of others.

Conditions to Take Leave

Covered employers can require eligible employees to follow usual and customary notice, procedural, and documentation requirements for requesting leave. However, the employees must be allowed at least three days to provide documentation.

How Employees Can Remedy an Employer’s Violation

An aggrieved employee may file a claim with the Wage and Hour Division of LARA within six months of the alleged violation date. LARA will investigate and attempt to mediate a resolution. If informal resolution is unsuccessful and LARA determines that there has been a violation, the employer may be ordered to pay for the paid medical leave improperly withheld. LARA can also impose other penalties, including administrative fines not more than $1,000. The PMLA does not permit employees to file a lawsuit in court alleging a violation of the statute.

Using Other Paid Time Off (PTO) as a Substitute

The PMLA only establishes a minimum standard that employers must provide to eligible employees. Under the PMLA, a rebuttable presumption of compliance exists if the employers’ PTO policies give the employees at least 40 hours of paid leave.

Not every covered employer needs to revise their policies or supplement a specific paid medical leave policy to comply with the PMLA. An existing PTO policy can be used to satisfy the requirements of PMLA if all of the following requirements are met:

  1. PTO time is paid at the same rate of pay as the eligible employees normally earn;
  2. the amount of PTO time provided to employees during a benefit year is equal or greater than the amount required by PMLA;
  3. PTO time can be used for the same purposes as provided in the PMLA; and
  4. PTO time can be used in the same manner provided by the PMLA.

Poster/ Record Keeping Requirements

Covered employers are required to conspicuously display in the workplace posters that contain the information about the PMLA, which are provided free-of-charge by LARA. Every willful violation of the posting requirement can cost the employer up to a $100 administrative fine. In addition, employers must retain not less than one years’ worth of records that document the hours worked and paid medical leave taken by employees. These records shall be open for inspection by LARA at any reasonable time.

Conclusion

The PMLA, one of the newest additions to the Michigan employment law regime, is full of uncertainty. This note provides a summary of some of the more critical parts of the PMLA but does not detail the act in its entirety. If covered employers have not done so, they should review their current policies and procedures and, preferably with the help of counsel, consider how they can best implement all of the PMLA’s requirements.

Nhan Ho is an attorney in Miller Canfield’s employment and labor group and a graduate of Wayne State University.

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