Michigan Issues Important ESTA Updates

hey everybody we're back in the Shanny um I know it's not our normal day I missed a couple of our normal days as you know the shaning was being um renovated here's the renovation in case you're interested yep that's the new Shanny used to be my desk there now it's bookshelves um but we're uh we're back in the shading we're ready to go and we got to do this real quick cuz in about 30 minutes some guys are coming to take one of those trees down not because I want it down but because it's dead and of course we got interrupted by the dog and now you can see we're not in the Shany anymore and we're not in the Shany anymore cuz the tree guy showed up early and I don't want to be in the Shany when a tree falls on my head um plus they're really noisy if you've ever had a tree taken down you know the chainsaws and all that ja so what are we going to talk about today and why are we doing this on a different day we're doing it on a different day because the state of Michigan issued a couple of helpful guidelines guidances if you will um on the earn sick time act and and we were hoping the state would go ahead and do this and they did go ahead and do it and they issued two things the first thing they issued was a u a PowerPoint presentation Sean Egan at Leo uh who's the deputy director of Labor um issued a PowerPoint presentation it's dated August 27 uh and it goes through the statute basically tells us things we already knew from the statute but more importantly what the state issued was a set of frequently asked questions uh I will put a link to that right down here so you guys can go see those frequently asked questions but the frequently asked questions in addition to giving us stuff we already knew like who's an employer basically everybody but the United States um and uh you know um when do people start earning this stuff the February SE 21st 2025 and what's a benefit year it's whatever 12- month year you pick and all kinds of stuff that we've already talked about there's at least three questions in this FAQ that I wanted to cover that do ask some of the questions that you guys and we frankly had about this statute so let me go through that real quick and we'll we'll get you those answers and then if you have any additional questions of course you can give us a call and we could talk about those issues so the first question that I think is helpful from this FAQ is what employees are eligible to receive earned sick time now if you've been doing a lot of reading online about this you'll recall that the definition of employee under the ACT is very very Broad and a number of law firms out there have said it's broad enough to cover independent contractors the definition from the statute is an eligible employee is an individual engaged in service to an employer in the business of the employer all right that's a broad definition and it could theoretically cover an independent contractor an independent contractor is somebody who provides services to an employer in the business of the employer now I've taken the position all along and I've got an email to prove it that it this is not intended to cover independent contractors that it's intended to cover Act ual employees and the FAQ kind of clears that up so the FAQ says what employees are eligible to receive earned sick time and the answer is this an eligible employee is an individual engaged in service to an employer in the business of the employer and again that is right from the statute that's not very helpful but it's this next part that helps us out because the FAQ goes on to say and from whom an employer is required to withhold for federal income tax purposes okay that settles I think the independent contractor question you don't withhold a properly classified independent contractor does not have taxes withheld from his or her pay federal taxes are not required to be withheld so this would suggest that independent contractors are not covered it's just your regular old employees under the fair labor standards act and under the IRS code it's employees only not independent contractors and then we get some questions you know again like I said about um when does an eligible employee begin to acrew what's a benefit year um do do you have to allow carryover and blah blah blah again all questions that we already knew the answer to because it come right out of the statute then again we have another question that I think is helpful because we've had a lot of discussions so far about front loading remember under the pmla you are specifically allowed to frontload under the earn sick time act there is no provision for front loading the statute doesn't mention it all it says is you have to acrew earn SI time at a rate of 1 hour for every 30 hours all right there's an FAQ on that too and here's what the question is May an employer provide the to let's try that again may an employer provide the total amount of earned sick time all at once can you front load the answer to the question is this there is no Prohibition in the law preventing an employer from from providing the total amount of sick time at the beginning of the 12-month period that would seem to suggest again that you can front load um our good friend Rob deau has taken that position all along turns out he's right you can front load I wasn't sure I was wrong on this one um you can frontload but there's a Proviso to that there's a condition okay you are allowed to front load but this the answer goes on they says there's no provision uh provided it it being the employer complies with the acral use carryover and other provisions of the ACT during the benefit period so what that says to me is this you can frontload but you still have to keep track of how many hours the employee acrs and one of the problems with front loading is you don't know how many hours the employee is going to acrw remember if you're a large employer large employer you have over 10 employees the employe gets 72 hours each year to use they might not earn that much but they get that to use if you've done the math you know that if an employee Works 280 hours 40 hours a week 52 weeks a year they're not going to earn 72 hours so the question then becomes how do you front load do you just frontload the 72 hours and hope the employee earns all those and if you frontload them once you've give them to them they've got them you can't really take them back um plus you still have to keep track of how many hours the employee Acres so you've still got to do the math on your um on your payroll system you you also have to let them use up to 72 hours or whatever they earned in this case if you front load 72 hours it's going to be 72 hours you have to allow them to carry over remember under the pmla if you front loaded you didn't have to allow carryover But Here If You front load you will have to allow carryover and other provisions of the ACT meaning they can use it for the same stuff they could use it under the act so you can front load but you've got to do all these other things in addition to that and so I think that gets you back to still do we how we going to do this right the question is how we going to do this and then the last question that I think is helpful in this FAQ is is the question of use what's the smallest increment of time in which the employee can use the lead and the statute says they can use it in the smallest in an hour or the smallest increment that you track time so the question is this does earned a sick time have to be taken in one hour increments I'm not a big fan of that question but that's a question we get and the answer is maybe then the state says the ACT provides that earn SI time may be used in the smaller of hourly increments or the smallest increment of time used by the employer payroll system for absences or use of other time okay that's not super helpful but they give an example the state then says for example if an employer uses 1110th open print 6 minutes closed print of an hour for tracking absence attendance then this would be the incremental use allowed for ear in sick time all right so if an employee is late if they're over 6 minutes late that means an employee can use earn sick time in six minute increments that's what that means to me okay so that's out there you can go see it the link is in here you'll have to pause to get the link but it's in here if you have any questions you should call us and don't forget we've got policies for all this stuff that you can purchase from us so come see us give us a call call your Warner lawyer and we'll get you the answers you need and by the way we do need to give credit where credit is due the state got these things out early at least we've got some guidance now on how they're going to implement this and away we go we'll see you next time