On Wednesday, February 9, 2022, Governor Newsom signed into effect two new pieces of legislation (SB 113 and SB 114) that were intended to address matters that employers and employees continue to face as a result of the COVID-19 pandemic.

CA Paid Sick Leave Extension (SB 114)

SB 114 brings back the COVID-19 supplemental paid sick leave requirement for employers with 26 or more employees, but with a few slight changes. The supplemental paid sick leave must only be provided to employees who are unable to work or telework for COVID-related reasons. This COVID-19 supplemental paid sick leave requirement is retroactive to January 1, 2022, and will remain in effect until September 30, 2022.

The previous COVID-19 supplemental paid sick leave (SB 95) applied from January 1, 2021 to September 30, 2021. Employers currently have no obligation to provide retroactive COVID-19 supplemental paid sick leave to employees who may have taken time off between October 1, 2021 and December 31, 2021 for a COVID-19-related reason. However, employers may have been required to provide paid time off to eligible employees during that time period under the Cal/OSHA requirements that are currently still in effect for employees who have been exposed to COVID-19 in the workplace.

Qualifying Reasons for COVID-19 Supplemental Paid Sick Leave

The definition of a “covered employee” has slightly changed in SB 114 compared to previous COVID-19 supplemental paid sick leave legislation, due to the inclusion of vaccine boosters, but the qualifying reasons are otherwise still the same. Covered employees are entitled to COVID-19 supplemental paid sick leave if the covered employee is unable to work or telework due to any of the following reasons:

(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 isolate or quarantine due to COVID-19;

(3) the employee is attending an appointment for themselves or a family member to receive a COVID-19 vaccine or booster;

(4) the employee is experiencing symptoms, or caring for a family member experiencing symptoms, related to a COVID-19 vaccine or booster that prevents them from working or teleworking;

(5) the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;

(6) the covered employee is caring for a family member who has been advised to isolate or quarantine; and

(7) the employee is caring for a child whose school or place of care is closed or unavailable due to COVID-19.

When covered employees request COVID-19 supplemental paid sick leave due to symptoms that they or their family member are experiencing after receiving a COVID-19 vaccine or booster, an employer may limit the total COVID-19 supplemental paid sick leave to three (3) days (or 24 hours), unless the employee provides verification from a health care provider that the employee or their family member is experiencing ongoing COVID-19 symptoms beyond those three (3) days. This three (3)-day (or 24-hour) limitation includes the time used by the employee in attending the appointment to receive the vaccine or booster.

What Amount of Supplemental Paid Sick Leave Are Covered Employees Entitled To?

The amount of leave that a covered employee is entitled to depends on the work schedule of the employee. Employees are entitled to no more than eighty (80) hours of COVID-19 supplemental paid sick leave under this new law if they are classified as a “full-time” employee. All other employees may be entitled to an amount of supplemental paid sick leave that depends on how many hours they work. There are special requirements for covered employees who are firefighters.

The total number of hours of COVID-19 supplemental paid sick leave available to eligible employees under SB 114 is in addition to any prior COVID-19 supplemental paid sick leave an employee may have previously received as a result of prior laws that were in effect. For example, if a covered employee received a full eighty (80) hours of COVID-19 supplemental paid sick leave between January 1, 2021 and September 30, 2021, that same employee is now entitled to an additional eight (80) hours of COVID-19 supplemental paid sick leave between January 1, 2022 and September 30, 2022, assuming they are eligible for the paid leave under SB 114.

What Rate of Pay Should be Used for Supplemental Paid Sick Leave?

The hourly rate at which COVID-19 supplemental paid sick leave should be paid depends on whether the employee is classified as exempt or non-exempt.

Non-exempt covered employees should be compensated at a rate equal to one of the following hourly rates: (1) the same manner of calculation of the regular rate of pay for the workweek in which the covered employee uses COVID-19 supplemental paid sick leave, whether or not the employee actually works overtime in that workweek, or (2) the division of the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the ninety (90) days of employment prior to the employee’s use of the COVID-19 supplemental paid sick leave. Employers are not required to pay the highest of these two rates of compensation under SB 114, although the hourly rate selected from one of the two methods above should at least be equal to the minimum wage.

Exempt covered employees shall be paid at a rate calculated in the same manner that the employer uses to calculate wages for other forms of paid leave time that the employee would otherwise be entitled to.

Employers are not required to pay more than $511 per day and a total of $5,110 in the aggregate to a covered employee for qualifying COVID-19 supplemental paid sick leave, unless there is future federal legislation enacted that increases these amounts. Once these maximum amounts have been reached, employees could choose to utilize other paid leave that is available to them.

Employees cannot be required to use any other paid or unpaid leave, paid time off, or vacation time provided by the employer to the covered employee before the employees uses, or to replace the employee’s use of, COVID-19 supplemental paid sick leave.

Employers should consult with an attorney to ensure COVID-19 paid sick leave is being paid properly to covered employees.

Notice Requirements

Employers are required to provide employees with written notices that shows the amount of COVID-19 supplemental paid sick leave that the employee has used through the pay period in which it was due to be paid. This notice can be provided either on the employee’s itemized wage statement (or paystub), or in a separate writing provided on the day the employee receives their wages. If the employee has not used any such COVID-19 paid sick leave, the written notice should note that zero hours have been used.

Small Business Grant Program (SB 113)

Governor Newsom also signed into effect SB 113, which provides tax credits, grants, and other forms of relief for small businesses in California. This includes tax cuts for restaurants and venues who have received certain grants. Additionally, this bill restores certain business tax credits, including for research and development and the net operating loss deduction for businesses one year early. Lastly, SB 113 adds an additional $150 million in California’s Small Business COVID-19 Relief Grant Program to fund applicants who are on the waitlist to receive a grant.

Takeaways

Employers with 25 or fewer workers are exempt from SB 114, and do not need to provide COVID-19 supplemental paid sick leave from January 1, 2022 through September 30, 2022.
Employer with 26 or more workers must comply with these continued COVID-19 supplemental paid sick leave requirements, which apply retroactively from January 1, 2022 until September 30, 2022. Employers should be prepared to provide leave to covered employees during this time period.
While the new COVID-19 supplemental paid sick leave law is currently in effect, employers have until February 19, 2022 (10 days), before they have to begin providing the supplemental paid sick leave.
Additional resources may be available to assist small businesses impacted by the pandemic.
Employers should consult with an attorney for assistance in determining how to properly pay COVID-19 supplemental paid sick leave to covered employees, and to ensure compliance with notice requirements.