California Revives COVID-19 Supplemental Paid Sick Leave

New Retroactive California Covid-19 Supplemental Paid Sick Leave Is Imminent

For more than four months, California workers have been without additional paid time off due to COVID-19 related sick leave. However, statewide relief is on the horizon. On January 25, 2022, Governor Gavin Newsom agreed to restore California paid sick leave.

California’s previous paid sick leave program, which provided qualified employees with up to 80 hours of paid sick leave due to COVID-19, ended on September 30, 2021. Since that time, there has been a surge in COVID-19 cases amid an ongoing labor shortage. Yet, some employees impacted by the virus had no option for paid leave other than alternate methods of sick leave, which, for many employees, is limited to only three days under California law.

On February 3, 2022, legislative leaders voted 13-3 to endorse Governor Newsom’s proposal. The full Assembly approved the proposal on February 7, 2022. Under the deal, the new leave program will be retroactive on January 1, 2022, and extend through September 30, 2022.

Eligibility for Leave

Any full-time employee of an employer with 26 or more workers is entitled to up to 80 hours of paid leave due to COVID-19 covered reasons. Notably, only 40 hours of leave must be provided if an employee or family member tests positive. The employee has up to 40 hours of paid leave for all other covered reasons that essentially track those of the 2021 CA Supplemental Paid Sick Leave.

Part-time workers would be eligible for sick leave equal to the number of hours they typically work in a week or twice that amount with a positive test. This leave is independent of (i.e., in addition to) existing leave associated with getting and/or recovering from the vaccine.

To qualify for leave for having or caring for someone with COVID-19, employers may require the employee show proof that they or a family member has tested positive for the virus. Notably, employers must pay for and provide the test. If a worker refuses to provide the documentation, no additional sick leave needs to be granted.

Impact on Employers

Under the original bill, employers were reimbursed for the supplemental paid sick leave with a federal tax credit. An equivalent tax credit is no longer available. Rather, employers will be provided with tax credits for research and development and net operating losses, through tax relief for recipients of federal relief grants for restaurants and shuttered venues. There will also be additional funding available for small business grants. As such, most employers will have to bear the cost of the additional leave if they do not qualify for credit under the revised parameters.

With full Assembly approval, employers should anticipate that Governor Newsom will sign the bill soon. Once signed, it will take effect in 10 days. Given that the leave is retroactive, employers are encouraged to promptly identify any employee that has taken COVID-19 related sick leave since the beginning of the year and prepare to pay for the time off accordingly. Employers should also prepare to grant sick leave based on the above through September 30, 2022.

We will continue to monitor future developments, including any updates and/or anticipated changes in the law. If you have any questions related to compliance, please contact Pearlman, Brown & Wax’s Employment Law department for assistance at (818) 501-4343 or here.