California’s New COVID-19 Supplemental Paid Sick Leave Retroactive to January 1, 2021
Labor & Employment 03/22/21 James Y. Wu
On Friday, March 19, 2021, California Governor Gavin Newsom signed into law SB 95 which enacts supplemental COVID-19 Paid Sick Leave. The law goes into effect immediately, however, covered employers have a 10-day grace period through March 29, 2021 to start providing the leave. Additionally, the law is retroactive to January 1, 2021. Here are some of the particulars:
Which employers are covered? Public and private California employers with more than 25 employees nationally.
Which employees are covered? Any California employee may be entitled to the supplemental paid sick leave. There is no length of service or other similar eligibility requirements.
For what reasons can employees receive this new paid sick leave? Employees who are not able to work or telework for any of the following seven reasons are eligible for supplemental paid sick leave:
1. The employee is subject to a quarantine or isolation period related to COVID-19.
2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
3. The employee is attending an appointment to receive a vaccine for protection against contracting COVID-19.
4. The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
5. The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
6. The employee is caring for a family member, as defined, who is subject to a quarantine or isolation period, or who has been advised to self-quarantine related to COVID-19.
7. The employee is caring for a child, as defined, whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
"Family member" is defined as child, parent, stepparent, legal guardian, spouse, registered domestic partner, grandparent, grandchild, and sibling. A "child" is a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis. This definition of a child is applicable regardless of age or dependency status.
How much paid leave can the employee receive? The amount of leave depends upon if the employee is full-time or part-time.
- Full-time employees are entitled to 80 hours of supplemental COVID-19 paid sick leave. For purposes of this new law, "full-time" employees are those who are classified as full-time by the employer or those who were scheduled to work, on average, at least 40 hours per week for the employer in the two weeks preceding the date the covered employee took COVID-19 supplemental paid sick leave.
- Part-time employees are entitled to supplemental COVID-19 paid sick leave depending upon the number of hours they work, specifically:
1. If the employee has a normal weekly schedule, the total number of hours the covered employee is normally scheduled to work for the employer over two weeks.
2. If the employee works a variable number of hours, 14 times the average number of hours the covered employee worked each day for the employer in the six months preceding the date the covered employee took COVID-19 supplemental paid sick leave. If the employee has worked for the employer over a period of fewer than six months but more than 14 days, this calculation shall instead be made over the entire period the covered employee has worked for the employer.
3. If the employee works a variable number of hours and has worked for the employer over a period of 14 days or fewer, eligible paid leave equals the total number of hours the covered employee has worked for that employer.
What is the rate of pay for the paid leave? The amount of pay employees are entitled to depends upon whether the employee is exempt or non-exempt.
- Exempt employees: Employers should use the same rate of pay for this supplemental paid sick leave that it uses to calculate wages for other forms of paid leave time.
- Non-exempt employees are entitled to the highest of the following:
1. Calculated in the same manner as the regular rate of pay for the work week in which the covered employee uses COVID-19 supplemental paid sick leave, whether or not the employee actually works overtime in that work week.
2. Calculated by dividing the covered employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
3. The state minimum wage.
4. The local minimum wage to which the covered employee is entitled.
Notably, this new supplemental paid sick leave is capped at $511 per day, and $5,110 in the aggregate.
Employer Notice Requirements:Employers must inform their employees about this new law. The Labor Commissioner's office has published a model notice which is found here.
Additionally, employers will need to itemize this leave balance and payment on employees' itemized wage statements. For employees who work variable schedules, an employer may meet the wage statement requirement for covered employees by doing an initial calculation of COVID-19 supplemental paid sick leave available and indicating “(variable)” next to that calculation. Employers must later update the calculation when a covered employee requests to use COVID-19 supplemental paid sick leave or requests relevant records.
Retroactive to January 1, 2021: The new law provides that it “shall apply retroactively to January 1, 2021”. The process for retroactive payments is as follows:
- If an employee previously took leave on or after January 1, 2021 that otherwise would have qualified under COVID-19 supplemental paid sick leave and the employer did not provide paid leave (or did not compensate at the required level), then upon the oral or written request of the employee, the employer shall provide the covered employee with a retroactive payment that provides for such compensation.
- For such retroactive payments, the number of hours of leave corresponding to the amount of the retroactive payment shall count towards the total number of hours of COVID-19 supplemental paid sick leave that the employer is required to provide to the covered employee under the new mandate.
- This retroactive payment shall be paid on or before the payday for the next full pay period after receipt of the oral or written request of the covered employee and must be reflected on the corresponding wage statement.
Other Items of Note: This supplemental COVID-19 paid sick leave entitlement is in addition to any other California paid time off requirements. Furthermore, employers shall not require an employee to use any other paid or unpaid leave, paid time off, or vacation time provided by the employer to the employee before the employee uses COVID-19 supplemental paid sick leave or in lieu of COVID-19 supplemental paid sick leave.
Employers who provided COVID-19 supplemental paid sick leave for leave taken after January 1, 2021 for the same reasons and at (or above) the same rate as under this new law may count those hours toward the new supplemental paid sick leave obligation.
While not specifically addressed in the new law, these payments under the new California law may qualify for federal tax credit under the American Rescue Plan Act of 2021 just signed into law by President Biden. This recent Quarles & Brady alert covers this new federal law.
The new California law is reflected in new Labor Code sections 248.2 and 248.3 and is set to expire after September 30, 2021.
Act Now to Comply: Covered employers should take steps now to comply with this new entitlement, including:
- Post the model notice from the Labor Commissioner's Office, and provide it in electronic form to remote workers.
- Employer should also work with their payroll department/provider to ensure that the new entitlement will be properly reflected on paystubs.
- Importantly, if the employer provided equivalent (or more beneficial) paid leave for the same COVID-19-related reasons, then the employer should consider whether it will designate such prior payment as paid leave under the new law.
- Review the new FAQs published by the Labor Commissioner's Office, linked here.
If you have any questions about the new California supplemental COVID-19 paid sick leave or related employee leave issues, please contact your local Quarles & Brady attorney or:
- James Y. Wu: 925-658-0300 / [email protected]