California Supplemental Paid Sick Leave
On March 19, 2021, Governor Newsom signed Senate Bill 95. This bill revives California’s Supplemental Paid Sick Leave (“SPSL”) requirements, but it expands the applicability of the sick leave obligation to employers who employ more than 25 people, adds additional reasons for sick leave, and applies retroactively to January 1, 2021. There are additional, separate, and unique leave eligibility scenarios for firefighters and in-home supportive services providers. With respect to defined in-home support services providers, there are no employee threshold requirements.
On March 29, 2021, employers to whom the bill applies are required to provide all employees, unable to work or telework for reasons defined, with COVID-19 Supplemental Paid Sick Leave. This is additional to an employer’s regular sick leave requirements under California law. The requirement lasts until September 30, 2021. However, employers should be aware that the leave may be extended in the future.
Purposes for Leave
Justifications for leave under California’s SPSL may be categorized in three ways:
- Employees Caring for Themselves. Employees who are subject to quarantine or isolation orders or guidelines are entitled to leave for the period of the isolation or quarantine. Employees also qualify if a health care provider has told employees to quarantine or the employee is experiencing symptoms and seeking a medical diagnosis.
- Employees Caring for Family Members. If an employee’s family member (child, spouse, registered domestic partner, grandparent, grandchild, or sibling) is subject to an isolation or quarantine order or guidelines or has been advised to self-quarantine, the employee is eligible for leave to care for them. Also, an employee’s care for a child whose school or place of care is closed or unavailable for reasons related to COVID-19 on the premises.
- Vaccine-Related Purposes. In the event that an employee is attending a vaccination appointment or cannot work or telework due to vaccine-related symptoms, the employee is entitled to leave.
Amount of Leave to Which Employees are Entitled
The amounts of leave to which employees are entitled varies depending on four factors: (1) the employee’s full-time status; (2) if the employee is not designated as full time, the number of hours worked; (3) whether an employee has a regular schedule; and (4) if the employee has a variable schedule, the period of time for which the employee has worked for the employer.
The Bill requires that employers pay SPSL to non-exempt employees, at the higher of:
(1) the employee’s regular rate of pay (whether or not the employee actually works overtime);
(2) dividing total wages (not including overtime premium pay) by the employee’s total hours worked in the full day periods of the prior 90 days;
(3) the state minimum wage; or
(4) the local minimum wage to which the covered employee is entitled.
For exempt employees, the bill simply states that the pay is to be calculated in the same manner as the employer calculates wages for other forms of paid leave time.
The bill presently caps the leave amounts at $511 per day or $5,110 in the aggregate for 2021 SPSL, but the DIR notes, “the covered employee may utilize other paid leave that may be available in order to receive what they would normally earn if the cap is reached.”
If the employee is considered full-time or works 40 hours or more in the two weeks preceding the leave, they are entitled to 80 hours of paid leave. As noted above, if the employee is not considered full-time by the employer and falls below the hourly threshold, then the leave eligibility is calculated based on the average number of hours worked in specified periods.
Duty to Pay Employees Under SPSL
Employees may request retroactive SPSL for leave previously taken during the period between January 1, 2021 to March 28, 2021. The employee is entitled to retroactive payment if the leave previously provided did not compensate the covered employee in an amount equal to or greater than the amount of compensation for SPSL. Once an employee requests leave, the employer is required to pay the employee on or before the next full pay period. Furthermore, an employee may designate the number of hours of eligibility they would like applied.
Employers must provide notice relating to the benefit on or before March 29, 2021 when the leave becomes effective. When an employee wants to use the leave under SPSL, they can do so by either oral or written request and can designate the amount of the sick leave eligibility that they would like to use.
Supplemental Benefits Credited Against SPSL
Certain supplemental benefits that employers provided between January 1, 2021 and March 28, 2021 may be credited against an employee’s eligibility under SPSL. In order for these supplemental benefits to qualify they must:
- Be for the reasons described in the law (vaccination, self or familial care, etc.);
- The benefit must compensate the employee in an amount equal to or greater than the SPSL entitlement; and
- The supplemental benefits cannot be basic mandatory paid sick leave and cannot be previous California SPSL or food sector SPSL. However, the bill states that these benefits, “may include paid leave provided by the employer pursuant to any federal or local law in effect or that became effective on or after January 1, 2021, if the paid leave is provided to the covered employee under that law for any of the same reasons set forth…” in the new SPSL bill.
The DIR also states for this supplemental benefit it must be the case that, “the employer did not require the covered employee to use any other paid leave or paid time off available to the employee under a policy that is not specific to COVID-19, or vacation time.”
Additional Employer Requirements
There are several recordkeeping and documentation requirements related to California SPSL. Beginning on March 29, 2021, the California SPSL requires employers to inform the employees of how much SPSL eligibility they have available on their paystubs as a distinct line item. If the employee has a variable schedule, the employee also must note after doing an initial calculation that the amount is “variable.” On March 29, 2021, employers are required to post notice of SPSL leave availability by posting a notice in a conspicuous common area at the worksite, or if the employees do not frequent a workplace, by sending the notice to employees via electronic means (email).
The California Department of Industrial Relations has published a FAQ on the topic which includes a link to a model notice in Item No. 22.
Federal Emergency Paid Sick Leave and Expanded Family Medical Leave
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021. The bill continues the voluntary Emergency Paid Sick Leave (“EPSL”) and Expanded Family and Medical Leave (“EFML”) provisions in the Families First Coronavirus Response Act and extends a tax credit to employers who provide qualified sick leave wages to employees from April 1, 2021 until September 30, 2021.
The qualifying purposes for EPSL under the Families First Coronavirus Response Act are extended and add the following reasons to the existing reasons:
- the employee is seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 and such employee has been exposed to COVID–19;
- the employee’s employer has requested such test or diagnosis; or
- the employee is obtaining immunization related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization.
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This adds to a number of other leave justifications in the context of COVID-19 including: (1) an employee being subject to a quarantine or isolation order; (2) the employee has been advised by a health care provider to self-quarantine; (3) the employee is experiencing symptoms and seeking medical diagnosis; (4) the employee is caring for an individual subject to a quarantine/isolation order or health provider recommendation to self-quarantine; (5) the employee is caring for a son or daughter whose school or place of care is closed or unavailable due to COVID-19 precautions; and (6) any other ‘substantially similar condition’ specified by the Secretary of Health and Human Services. The Act expands the qualifying purposes for EFMLA to include the EPSL purposes.
The 10-day limit for EPSL is reset on April 1, 2021. The 12-week period for EFMLA is arguably reset by ARPA, but the act does not clearly do so. An eligible employer that voluntarily provides EPSL under the FFCRA can apply the 100% payroll tax credit of qualified sick leave wages up to 10 days of pay as qualified EPSL from April 1, 2021 to September 30, 2021. This applies even if the employee previously exhausted their EPSL.
With respect to eligibility for and claiming the tax credits under the EPSL or EFMLA, employers should contact a tax professional.
Should you have any questions about your business’ compliance with the COVID-19 paid sick leave obligations or if you have general questions, please contact the attorneys at Sagaser, Watkins & Wieland, P.C.