Expert Advice on the Earned Sick Time Act (ESTA)
What You Need to Know
Struggling on how to help employers implement new policies under ESTA? Or even figure out how to make sure your own firm is compliant? You’re not alone. Maria Fracassa Dwyer of Clark Hill PLC recently sat down with us to share her insights on this tricky topic.
These excerpts have been edited for length and clarity.
ICLE: What do you think Michigan practitioners need to know right off the bat regarding ESTA?
Maria: I think Michigan practitioners should immediately begin working with their clients to review policies and to ensure that employers are at least providing 72 hours, whether that's through the accrual method or the front-loading method, while we sort out how employers are going to implement these policies, just making sure that if someone comes forward and they need sick time, that they're not being denied that time and they're given the increased allotment. Reviewing policies right now, working with employers to give them the options that are available, considering limitation periods, reviewing part-time workforces, and explaining to employers what these changes mean and how they impact their policies and workforces are top of mind issues to address.
ICLE: What is the trickiest portion of this legislation that you think practitioners have to face, and what is your advice on handling it?
Maria: I think there are a lot of nuances in this statute. It's important to review it, review the Q&As that LEO (Labor and Economic Opportunity) has provided on the State of Michigan website. They're very helpful and they're regularly updated to understand the nuances in this new law. From a management perspective, working with clients and employers and helping them understand the nuances in long term leaves and attendance performance issues are critical considerations to limit risk. Most employers have attendance protocols in place and understanding that if an employee utilizes ESTA time, there are limitations on the questions that can be asked and documentation that may be requested.
ICLE: Can you share an example of that?
Maria: Employers cannot ask employees for documentation unless they take a certain amount of leave time. Understanding how employers can continue to manage attendance expectations with this new law in effect, I think, can be tricky. I also think with the accrual method, we have to make sure that our payroll teams are ready and that the proper back-of-the-house documentation and tracking is in place.
ICLE: Given your experience, what is the biggest change that is going to affect your practice and how you advise clients—or maybe change your approach?
Maria: I think that the biggest change is understanding the national shift and looking at the landscape overall. Many states are implementing sick leave policies, and they differ from state to state. Where practitioners have multistate locations that they're dealing with, understanding that it's no longer a one-size-fits-all. We typically, historically, would have a single policy that applies to numerous locations. That may not work moving forward.
Many employers like to have a single handbook that contains all of the general policies. It is likely going to be more and more commonplace for employers to have state law policies as it relates to leave laws. If you are a multistate employer, you should ensure that you are staying up to date on state sick leave policies and pending legislation so that you can understand the distinctions in these laws, the different amounts of leaves that are required from state to state, and then considering how to manage all of that.
Do you want to, as a practitioner, advise employers or work with employers on maintaining different policies in each of the jurisdictions? Would an employer prefer to have a policy that provides the greatest amount of benefit for all employees to maintain a uniform approach? If so, consider the financial impact of this approach. For all employees, no matter where they're located, looking at the bottom line and understanding what the financial impact on a universal policy might mean.
ICLE: Have you had to handle ESTA already in some way, and how did that work out?
Maria: One of the issues I've run into recently is helping an employer understand the nuance between the accrual method and the front-loading method, and that under the accrual method, an employer is permitted to have a 90-day wait period, but that wait period does not apply where employers front-load the 72 hours of ESTA time. And so if employers have a high turnover rate or a policy that probationary employees are not allowed to use time off during their 90-day probationary period, then that is something that they'll need to change if they opt for the front-load policy.
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