Paid Leave and Coronavirus—Part 24: California Revives, Expands COVID-19 Supplemental Paid Sick Leave

Seyfarth Synopsis: On March 18, 2021, the California Senate voted to revive and expand the COVID-19 related supplemental paid sick leave law that expired on December 31, 2020, and Governor Newsom signed it into law the following evening. The law became effective immediately once signed, with a 10-day grace period for compliance, and it applies retroactively to January 1, 2021 (thereby requiring back payments). The new law expands the scope of covered employers, as well as the covered reasons for taking the leave. The new law is set to expire September 30, 2021.

Refresher On The Recent History of CA-SPSL

On September 9, 2020, California enacted a state-wide COVID-19 supplemental paid sick leave law to fill gaps left by the federal Families First Coronavirus Response Act (“FFCRA”) related to large employers. This law, a budget trailer bill, went into effect immediately as California’s Supplemental Paid Sick Leave (“CA-SPSL”).

The old CA-SPSL law required most employers with over 500 employees to provide up to 80 hours of paid leave for three COVID-related reasons, if the employee had to leave their home to perform work: (1) when an employee was subject to an isolation or quarantine order, (2) when a healthcare provider recommended the employee isolate or quarantine, or (3) when the company prevented an employee from working due to COVID-19 transmission related concerns. The leave was automatically set to expire December 31, 2020, unless the FFCRA was extended. At the eleventh hour, the Labor Commissioner determined that the FFCRA’s tax credit expansion would not trigger an expansion of the old CA-SPSL law, which then expired at the end of the year.

For the next few months, employers had to wonder whether or how California would extend paid sick leave for COVID-related reasons. Local governments throughout California—Los Angeles City and County, Oakland, Sacramento City and County, San Francisco, San Jose, and others—enacted their own COVID-related paid sick leave laws to fill in the gaps. Meanwhile,  as we reported, the California Legislature considered bills that would expand COVID-related SPSL obligations.

The Legislature has now approved SB 95, and Governor Newsom signed it into law on March 19, 2021, effective immediately as new Labor Code section 248.2. The DLSE promptly published FAQs on the new 2021 COVID-19 Supplemental Paid Sick Leave Law, and the DIR published the required poster to be included in the workplace (or distributed to remote employees).

What Are The Big Differences With The New CA-SPSL?

The New CA-SPSL Law Covers Additional Employers

Unlike the old CA-SPSL the law, which covered only employers with 500 or more employees, the new law applies to employers with more than 25 employees.

Additional Covered Reasons For Leave

As noted above, the old law required employer-paid SPSL leave only under fairly narrow circumstances. The new CA-SPSL greatly expands covered uses. It also permits employees to take paid leave whenever they are unable to work or telework, meaning that the new law applies even to individuals who do not leave home for work.

The new covered reasons for leave include situations when the employee cannot work or telework because the employee:

• is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of the State Department of Public Health, the CDC, or a local health officer with jurisdiction over the workplace,
• has been advised by a health care provider to self-quarantine due to concerns related to COVID-19,
• is attending an appointment to receive a vaccine for protection against contracting COVID-19,
• is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework,
• is experiencing symptoms of COVID-19 and seeking a medical diagnosis,
• is caring for a family member who is subject to a quarantine or isolation order or guidelines, or who has been advised to self-quarantine by a health care provider, or
• is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19.

Retroactive Effect

The obligation to provide leave begins 10 days after the law is enacted (March 29, 2021), at which point the requirements apply retroactively, to January 1, 2021.

Employers are required to issue retroactive payments to employees who took leave for a covered reason, upon written or verbal request by an employee. For example, if an employee got vaccinated in February 2021, and put in a request for pay for that leave, the employee is eligible for a retro-payment of CA-SPSL under the new law. The retroactive payment has to be paid “on or before the payday for the next full pay period after the oral or written request of the covered employee.” As noted by the DLSE in its FAQs on the new law, an employee’s request for retroactive payment must be made on or after March 29, 2021, to be valid. So, an employer does not have an affirmative obligation to go back and audit prior absences or PTO for potential coverage under the new CA-SPSL law.

Retroactive payments have to be reflected on written notices, and this obligation is in addition to the pre-existing obligation to provide paid sick leave to employees who were already on paid leave when the previous law expired on December 31, 2020.

Employers need to begin complying with the written notice requirements the next full pay period following the March 19, 2021, effective date of the legislation.

Amount of Leave

Like the old law, the new law requires employers to provide full-time employees with a new allotment of up to 80 hours of CA-SPSL for 2021 (with some exceptions for firefighters). Note that a prior version of the new law was set to implement an allotment of up to 80 hours per year, if federal law extended the Emergency Paid Sick Leave Act beyond 2021, but that annual renewal of the grant has been deleted from the operative version of the law.

Part-time employees who work normal schedules are entitled to the total number of hours they are typically scheduled to work in a two-week period. Part-time employees with variable schedules are entitled to the average number of hours in the preceding six months, or during the period the employee has worked for the employer. Employees who have worked 14 days or fewer are entitled to receive the total number of hours they have worked for the employer.

Like the previous law, CA-SPSL has to be made available upon written or oral request.

Rate of Pay Amended, Cap Tied To Federal Law

The new law more closely aligns with the method of payment for regular non-COVID-related sick leave, but there is one notable difference. It specifies that nonexempt employees must be paid at the highest of (i) their regular rate during the workweek in which they take the leave, (ii) the total wages (not including overtime) divided by the total hours worked in the past 90 days of employment, or (iii) the state or local minimum wage. Exempt employees should be paid through the same method they are normally paid leave. This may be good news for employers that were trying to figure out multiple calculations in payroll tied to different types of paid sick leave—recall the last version of CA-SPSL required pay at the regular rate of pay from the pay period prior to the leave, which was not the case under any other law. However, for employers that normally pay regular CA Paid Sick Leave under either the 90 day average regular rate or the current rate across the board, they will now need to determine which of those two is higher for each instance of CA-SPSL taken.

The new law would also track FFCRA’s daily cap of $511, and aggregate cap of $5,110 (unless federal legislation increases these caps, in which case, the new federal cap will apply).

Notification Requirements

As with the previous (non-food sector) version of the leave, employers have to provide the available leave balance on wage statements or in a separate writing, and it must be listed separately from regular paid sick days available (see new Labor Code section 248.2(d)(2)). Thankfully, now, when employees have variable schedules, employers can comply with their obligation by performing an initial calculation of paid leave available, and then indicate “variable” next to that calculation. But updated calculations would need to be provided upon request, or when the employee requests to use the leave.

Also, food sector employers are now subject to the wage statement requirement of including CA-SPSL for the first time. For all covered employers, the requirement to include available balances of CA-SPSL on the wage statement or in a separate writing kicks in the next full pay period after the law’s March 29, 2021 effective date.

The Labor Commissioner has published a model notice of the new law to post or provide to employees. Pursuant to Labor Code section 247, this poster must be placed in a conspicuous location in the workplace (such as a breakroom or by time clocks), or it may be distributed by electronic means to employees that do not regularly come into the workplace.

Interplay With Other Paid Leave

The new CA-SPSL leave is in addition to other paid sick leave that employees have available, and employers cannot require employees use other paid or unpaid time off before using new CA-SPSL. But the law clarifies that “an employer may require a covered employee to first exhaust their COVID-19 supplemental paid leave” before an employer will be required to pay out earnings continuation under the Cal/OSHA Emergency Temporary Standard for absences related to COVID-19 exposure or illnesses in the workplace.

In addition, COVID-related paid leave provided at the same (or greater) rate for the same covered reasons since the beginning of the year may be counted towards the hours the employer is required to provide. This offset may include leave provided under any federal or local law that was effective on or after January 1, 2021 (but not regular non-COVID-related California paid sick leave). For example, if an employer provided leave under a county ordinance while an employee was quarantining in January 2021, or if an employer provided paid leave while an employee took time off of work to be vaccinated in February 2021, this leave could be offset against the new CA-SPSL allotment.

In-Home Providers

A separate section under what will become Labor Code section 248.3 outlines similar requirements for providers of in-home supportive services.

Workplace Solutions

As the landscape of federal, state, and local COVID-related leave laws continue to quake, employers must continue to modify policies and practices to ensure compliance. For more information on COVID-19 issues, please contact your favorite Seyfarth attorney.