March 26, 2021
On the heels of President Biden signing the American Rescue Plan Act into law, California Governor Gavin Newsom signed Senate Bill 95 (“SB 95”) into effect on Friday, March 19, 2021 (codifying Labor Code section 248.2), which provides eligible employees up to an additional 80 hours of COVID-19 Supplemental Paid Sick Leave (“SPSL”) in 2021, regardless of whether they exhausted SPSL in 2020. SB 95 imposes three significant elements that differentiate it from prior COVID-19 SPSL policies. First, SB 95 applies to a greater number of employees than prior legislation. Second, SB 95 allows employees to take COVID-19 SPSL for new reasons, including vaccination related purposes. Third, the law applies retroactively to January 1, 2021, and expires on September 30, 2021. As a result, employers who were not previously subject to extending SPSL to their employees may be subject to this iteration. Employers will need to comply with this urgency legislation beginning March 29, 2021.
Recall, through Assembly Bill 1867 (“AB 1867”), SPSL was required for employees absent from work due to COVID-19 in certain industries, and/or employers with more than 500 employees. Like the Families First Coronavirus Response Act (“FFCRA”), AB 1867 expired on December 31, 2020. As such, as of January 1, 2021, the only employees in California able to take SPSL were those who worked in jurisdictions that had extended deadlines through local ordinances.
By comparison, SB 95 applies to employers with more than 25 employees. SB 95 defines a “covered employee” as an employee “unable to work or telework” because of a reason listed in the legislation (addressed below). Notably, small businesses employing 25 or fewer employees ae exempt from SB 95, though may offer SPSL, if eligible, to receive a federal tax credit for offering FFCRA like paid sick leave.
Grounds for Taking COVID-19 SPSL
SB 95 expands the qualifying reasons (bolded below), from those previously provided under AB 1867 and the FFCRA for which covered employees unable to work (or telework) can choose to use their COVID-19 SPSL to include the following:
- The employee is subject to a quarantine or isolation order related to COVID-19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
- The employee is attending an appointment to receive a COVID-19 vaccine.
- The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
- The employee is experiencing symptoms of COVID-19 and seeking medical diagnosis.
- The employee is caring for themselves or a family member who must or has been advised to self-quarantine or isolate.
- The employee is caring for a child, whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.
While SB 95 does not expressly provide a qualifying reason for employees excluded from the workplace as a result of a “close contact” exposure in the workplace, SB 95 does provide that an employer may require that an employee use COVID-19 SPSL for such purpose.
Amount of Leave Employees Receive
Generally, a covered employee is entitled to up to 80 hours of SPSL if the employee has worked, on average, at least 40 hours per week (i.e., full-time employees) in the two weeks preceding the date the employee took SPSL.
Part-time employees are generally entitled to the total number of hours the covered employee is normally scheduled to work over two weeks. Employees who work a variable number of hours are entitled to the approximate two-week wage the employee would receive. The covered employee may determine how many hours of SPSL to use, up to the total number of hours to which the covered employee is eligible.
Rate of Pay When Employees Use SPSL
The rate for nonexempt employees is calculated based on the highest of the following:
- Same calculation as used in determining the “regular rate of pay” for that employee;
- Dividing the employee’s total wages, not including overtime, by the total hours worked in full period in the prior 90 days of employment;
- State minimum wage; or
- Local minimum wage.
For exempt employees, employers calculate SPSL in the same manner they calculate wages for other forms of paid leave. Whether exempt or otherwise, employers need not pay more than $511 for each day an employee uses SPSL, or more than $5,110 in the aggregate to a covered employee unless federal law changes.
As with prior legislation, an employer cannot require a covered employee to use any other paid or unpaid leave, including vacation time before invoking, or in lieu of COVID-19 SPSL. Further, if an employee is excluded from the workplace under Cal-OSHA’s Emergency Temporary Standards, the employer can require a covered employee to first exhaust their SPSL to satisfy “continued earnings” under Cal-OSHA’s Emergency Temporary Standards.
Notice and Paystub Requirements
By March 26, 2021, employers must give notice of employees’ right to SPSL by making a model poster publicly available, conspicuously displayed in the workplace. If employees do not frequent a workplace, employers can provide electronic notice, e.g., email. The poster can be found here.
COVID-19 SPSL must also be available on paystubs, separately from regular paid-sick days. This requirement is not enforceable until the next full pay period following the date SB 95 takes effect (i.e., March 29, 2021).
SB 95 instructs employers to compensate any employee who took unpaid time off or time off at a lower rate of pay than prescribed by SB 95 prior to the law’s enactment (i.e., between January 1, 2021 and March 28, 2021), so long as the employee took this time off for one of the specified purposes noted above, such as, attending an appointment to receive a COVID-19 vaccine.
Request by Employee Required
Of notable significance, if leave was taken after December 31, 2020 but before March 28, 2021 (i.e., the period between the sunset of AB 1867 and the advent of SB 95), but the covered employee was not compensated for COVID-19 related sick leave (or the compensation was less than paid under SB 95), the covered employee may request, either orally or in writing, retroactive payment consistent with SB 95. Upon request, the employer must provide retroactive payment that provides such compensation. The retroactive payment must be paid on or before the payday for the next full pay period and the payment must be reflected on the written notice for the corresponding pay period.
Interaction Between COVID-19 SPSL and the American Rescue Plan Act (“ARPA”)
SB 95 intersects with the recently enacted ARPA particularly in relation to the extension of payroll tax credits to employers that provide Emergency Paid Sick Leave (“EPSL”) between April 1, 2021 and September 30, 2021 for each of the qualifying reasons provided for under the ARPA.
The ARPA expanded the qualifying reasons for which an employee may receive EPSL and employers (with 500 or less employees) may receive dollar-for-dollar payroll tax credits up to the $511 cap per day per employee, supplementing the initial qualifying reasons provided under the FFCRA. SB 95’s qualifying reasons essentially mirror those provided under the ARPA. Taken in combination, CA employers (with 500 or less employees) should be eligible for a dollar-for-dollar federal payroll tax credit for all SPSL benefits paid out to employees in 2021. Further, employers who choose to continue to offer up to ten additional weeks of Paid Expanded Family and Medical Leave at the pay rate of 2/3 the employee’s regular rate of pay, capped at $200 a day, should similarly be eligible for federal payroll tax credits for the amount paid out.
The policy behind this emergency legislation is to combat the ongoing financial impact of the COVID-19 pandemic. However, SB 95 admittedly poses yet another obligation on employers to continue to extend supplemental paid sick leave to their workforce, irrespective of productivity concerns and financial considerations of the business. Ultimately, compliance is critical. For that reason, we encourage you to contact Pearlman, Brown & Wax, LLP Employment Law Department for further guidance to discuss what must be done to comply with SB 95 and other COVID-19 related laws.
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