Michigan’s Paid Medical Leave Act (“Act”) is set to take effect on March 29, 2019. Under the Act, certain employers must provide eligible employees with paid time off under certain circumstances.
The Act that is set to take effect in an amended version of a paid medical leave law that Michigan voters passed in 2018. Currently, there is debate on whether amending the voter-passed law was constitutional. Employers should be aware that the Act may change in the near future.
Which employers does the Act apply to?
Employers with 50 or more employees (no matter where they are located) must provide accrued paid medical leave to eligible employees under the Act. As the Act stands today, employers located outside of Michigan with Michigan employees may need to provide those employees with paid medical leave. Michigan employers may not need to provide paid medical leave to employees whose primary work is not within the state.
Which employees are eligible under the Act?
Eligible employees are individuals who work for covered employers and whom employers are required to withhold federal income taxes. There are 12 exceptions to eligible employees, including:
- Individuals who are exempt from overtime requirements under section 13(a)(1) of the fair labor standards act
- Individuals who are covered by a collective bargaining agreement
- Individuals employed by the government
- Individuals whose primary work location is not in Michigan
- Variable hour employees
- Individuals employed for less than 25 weeks in a calendar year
- Individuals who worked, on average, less than 25 hours per week in the prior calendar year
This means that overtime exempt employees, seasonal employees, variable hour employees, and employees who worked less than 25 hours in the prior year are excluded from the Act. Employers should refer to the Act for the list of all the exceptions.
What paid medical leave must employers provide to eligible employees under the Act?
Employers must provide eligible employees with accrued paid medical leave, at a rate of at least one hour for every 35 hours worked. Employers can limit the accrued leave to one hour per work week, up to 40 hours in a 12-month period. Employers must pay the accrued leave at the eligible employee’s normal hourly wage or base wage.
Eligible employees must start accruing hours at hire, but employers can require eligible employees to wait until 90 days after hire to use their paid medical leave.
The Act allows employers to offer 40 hours of paid medical leave at the beginning of the year to satisfy this requirement. In addition, the Act creates a rebuttable presumption that employers are compliant if they provide at least 40 hours of paid leave (including paid vacation days, paid personal days, and paid time off) to eligible employees each year.
When can employees use paid medical leave under the Act?
Employers must allow eligible employees to use accrued paid medical leave under the following circumstances:
- For the medical diagnosis, care, treatment, or preventative care of the eligible employee’s mental or physical illness, injury, or health condition;
- For the medical diagnosis, care, treatment, or preventative care of the eligible employee’s family member’s mental or physical illness, injury, or health condition;
- For medical care, counseling, relocation, or legal proceedings due to the eligible employee or eligible employee’s family member being a victim of domestic violence or sexual assault;
- For the closure of the eligible employee’s primary workplace or eligible employee’s child’s school or place of care by the order of a public official due to a public health emergency; or if health authorities determine that the eligible employee or their family member’s presence would jeopardize the community health due to their communicable disease.
Family members include:
- Child (biological, adopted, foster), stepchild, legal ward, or child whom the eligible employee stands in loco parentis
- Parent (biological, adopted, foster), stepparent, legal guardian of eligible employee or eligible employee’s spouse, or individual who stood in loco parentis when eligible employee was a minor child
- An individual who the eligible employee is legally married under laws of any state
- A grandparent
- A grandchild
- Sibling (biological, adopted, foster)
Are there procedural requirements when eligible employees take paid medical leave under the Act?
If an eligible employee requests paid medical leave, they must comply with an employer’s usual notice and documentary requirements when requesting leave. Employers must give eligible employees at least three days to produce any required documentation. Paid medical leave must be used in one-hour increments unless employers have a different policy outlined in their employee handbook or guide.
What other obligations do employers have under the Act?
Employers must conspicuously display a poster that contains the amount of paid medical leave, when the leave can be used, and the right for eligible employees to file a complaint. The Michigan Department of Licensing and Regulatory Affairs (“LARA”) has released a poster that complies with this requirement.
Employers must also retain records documenting hours worked and paid medical leave taken by eligible employees for at least one year under the Act. Note that under Michigan’s Payment of Wages and Fringes Benefit Act, documentation on hours worked and fringe benefits must be maintained for at least 3 years. Thus, we recommend employers maintain these records for at least 3 years.
What are the penalties for non-compliance with the Act?
If employers violate the act, eligible employees may file a claim with LARA within 6 months of the violation. LARA has the power to investigate any complaints and impose penalties, which may include the payment of all paid medical leave improperly withheld.
In addition, employers can face fines of $1,000 for violations of the Act and $100 per violation for willfully violating the posting requirement.
What should employers do to prepare for Michigan’s PML?
Employers should take the following steps to ensure that they comply by March 29, 2019:
- Employers should determine if they already comply with the Act by offering equivalent paid time off;
- Employers should determine which employees are subject to the Act and ensure that eligible employees accrue paid medical leave at the appropriate rate (employers should set up their payroll to account for paid medical leave);
- Employers should ensure that any internal policies regarding leave comply with the provisions of the Act (including the notification and documentation requirements for taking paid medical leave);
- Post the Michigan LARA poster at employer’s place of business; and
- Retain records for at least 3 years.
The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.