The Basics
- An outdated employee handbook can lead to legal risks, making your organization vulnerable to lawsuits due to non-compliance with updated laws, such as Michigan’s Earned Sick Time Act (ESTA).
- Any Michigan employer with at least one employee must comply with ESTA, under which all employees are entitled to sick leave, regardless of whether they are part-time, temporary, exempt, or non-exempt.
- Your handbook must be updated to reflect not only the changes under ESTA but also any other laws and operations in effect since your last review.
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The Risks of an Outdated Handbook
Imagine trying to navigate a rapidly growing city, like downtown Detroit, using a map from 1988. Technically, it’s still a map. But many roads have changed, new buildings have gone up, and the old routes simply won’t get you where you need to go.
Many organizations are treating their employee handbooks the exact same way. They view them as static documents, sitting on a shelf (or a server), gathering dust.
But here is the hard truth: If your handbook isn’t changing, it’s failing.
In today’s rapidly shifting compliance landscape, an outdated handbook doesn’t just fail to protect your organization; it actively increases your risk of litigation and employee relations issues.
Think of your employee handbook like your smartphone. You wouldn’t ignore a software update for five years, would you? You regularly install updates to patch security holes and ensure the operating system runs smoothly.
Your handbook requires the same attention. When policies are unclear, inconsistent, or outdated, they weaken your defense as an employer. A handbook should be your first line of defense, but it can quickly become a liability if it doesn’t reflect your current operations or the current laws.
If you haven’t reviewed your HR policies or handbook recently, here’s why you need to act now.
Michigan ESTA Compliance: What Employers Need to Know
One of the most critical reasons to update your handbook right now is the shifting legal landscape. Specifically, we are seeing major impacts from ESTA in Michigan.
Who does ESTA apply to?
ESTA applies to all Michigan employers with at least one employee. Ignorance is not a defense; compliance is mandatory, and non-compliance results in civil penalties.
What are the specific requirements?
If your handbook does not explicitly outline the latest ESTA policies, you are opening yourself up to significant risk. Here is the breakdown of what you need to know based on your organization’s size:
- Employers with 10+ employees: You must provide 72 hours of paid sick time. (Effective date: Feb. 21, 2025).
Employers with fewer than 10 employees: You must provide 40 hours of paid leave and 32 hours of unpaid leave. (Effective date: Oct. 1, 2025).
If your handbook does not explicitly outline current ESTA policies, you are opening yourself up to significant risk.
How to Conduct a Proper Employee Handbook Review
Reviewing and updating a handbook isn’t about downloading a template from an AI generator and changing the company name. That is a recipe for disaster. A handbook needs to reflect how your organization actually functions.
At Rehmann, our review process is bespoke and thorough:
- Gap Analysis: We review existing documents to find outdated policies and —crucially — inconsistencies between what is written and what is actually done.
- Operational Alignment: We work with leadership to understand the company values and unique industry challenges.
- Clarity Over Legalese: We ensure the document is written for employees, not just lawyers. It needs to be understood by everyone at every level.
- Communication Rollout: We assist with the introduction plan, supervisor guidance, and acknowledgement forms to ensure the rollout is confident and clear.
Is your handbook protecting your organization, or is it a liability waiting to happen?
If you aren’t sure, it’s time for a check-up. Contact our HR Solutions team to learn more or start your HR compliance review today. We can help you ensure your roadmap is up to date.
Frequently Asked Questions
Q: Why is using a handbook template risky?
A: Using a generic template often fails to capture the specific operational realities and cultural values of your unique organization. A template may also miss state-specific regulations, like Michigan’s ESTA, leaving you vulnerable to compliance gaps.
Q: How does the Michigan ESTA affect small businesses?
A: Michigan ESTA affects all employers with at least one employee. Small businesses with fewer than ten employees must provide 40 hours of paid leave and 32 hours of unpaid leave, a requirement that took effect on Oct. 1, 2025.
Q: What is the first step in updating an employee handbook?
A: The first step is a gap analysis to identify outdated policies and inconsistencies between written rules and actual practices.