On March 19, 2021, Governor Newsom signed SB 95, which requires California employers with 25 or more employees to provide additional supplemental paid sick leave for COVID-19 related reasons to their California workers. The obligation to provide the new paid leave begins on March 29, 2021, but requires retroactive pay back to January 1, 2021 to employees who took leave for COVID-19 qualifying reasons. Additionally, SB 95 provides paid leave to employees who must take time to attend an appointment to receive the COVID-19 vaccine or who experience symptoms related to a COVID-19 vaccine. Employers may access the model notice here and the 2021 COVID-19 Supplemental Paid Sick Leave FAQs here.
Since March 2020, various local, state, and federal governments have passed laws requiring employers to provide paid sick leave for absences related to COVID-19, but such paid leave requirements expired on December 31, 2020, the day that the federal Families First Coronavirus Act (“FFCRA”) expired. The FFCRA required employers with fewer than 500 employees to provide their employees with up to 80 hours of paid sick leave or up to 10 weeks of expanded family and medical leave for specified reasons related to COVID-19. Governor Newsom, through executive action, adopted a similar COVID-19 supplemental paid sick leave requirement for food sector employers with 500 or more employees, and subsequently, this executive action became codified into law under Labor Code sections 248 and 248.1. Likewise, several California local governments adopted similar COVID-19 supplemental paid sick leave ordinances for companies operating within their city or county geographical limits. For more details read our past blogs here, here, here, here, here, here and here. This blog refers to the requirements under SB 95 as “2021 SPSL” to differentiate between prior state mandated COVID-19 supplemental paid sick leave requirements.
Two federal laws permitted employers to continue receiving the tax credits for providing paid sick leave under the FFCRA on a voluntary basis even after the FFCRA expired on December 31, 2020. The Consolidated Appropriations Act extended the tax credits through March 31, 2021 and recently, the American Rescue Plan of 2021 extended such credits through September 30, 2021 and imposed additional conditions (see below for a summary) for those employers who continued to provide paid FFCRA leave on a voluntary basis following the FFCRA’s expiration.
Until California’s SB 95, there was no legal obligation for California employers to continue providing 80 hours of supplemental paid sick leave for COVID-19 reasons under either federal or state law as of January 1, 2021. Rather, most California employees had to rely on using their 24 hours or three days of paid sick leave provided by California’s paid sick leave law (“PSL”) for absences related to COVID-19. Local governments in California, though, enacted ordinances requiring COVID-19 supplemental paid sick leave to fill in the gaps left behind by federal and state law. These local governments include City of Long Beach, City of Los Angeles, County of Los Angeles, City of Oakland, City of Sacramento, the City and County of San Francisco, City of San Jose, County of San Mateo, and City of Santa Rosa. For more information on such local ordinances, you may review the UC Berkeley Labor Center’s resource page here. Read FAQ 19 (here) for information on compliance with a local law and 2021 SPSL.
Which Employers are Covered by SB 95?
SB 95 adds sections 248.2 and 248.3 to the Labor Code chapter discussing California’s paid sick leave requirements.
- Labor Code 248.2 applies to all employers with 25 or more employees.
- Labor Code 248.3 applies to providers of in-home supportive services.
Which Employees are Eligible for SB 95 Leave?
SB 95 defines a “covered employee” as an employee “unable to work or telework” because of a qualifying reason (see below). This new definition of “covered employee” means that employees who work remotely will benefit from this law, so long as they are unable to telework due to one of the qualifying reasons. There is no “telework” requirement for providers of in-home supportive services.
What are the Qualifying Reasons for SB 95 Leave?
Employers must pay COVID-19 supplemental paid sick leave to employees absent as of January 1, 2021 through September 30, 2021 for the following reasons:
- The worker is subject to a Federal, State, or local quarantine or isolation order related to COVID-19. Employees may use COVID-19 supplemental paid sick leave for the minimum quarantine or isolation period under applicable guidelines that provides for the longest such minimum period. There are now different quarantine guidelines based on whether the employee is fully vaccinated or not. Read the Centers for Disease Control and Prevention March 5, 2021 guidance here and the California Department of Health COVID-19 Quarantine Guidelines here. Employers should also refer to local health department guidelines. Keep in mind that employees may be able to telework if taking leave for this reason.
- The worker is advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19. Again, an employee may be able to telework if taking leave for this reason.
- The employee is attending an appointment to receive a vaccine for protection against contracting COVID-19. This is a new qualifying leave that a remote worker may use to attend vaccine appointment(s).
- The employee is experiencing symptoms related to a COVID-19 vaccine that prevents the employee from being able to work or telework. This is a new qualifying leave.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for a family member who is subject to an order or guidelines to quarantine or who has been advised to self-quarantine by a health care provider.
- 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. With many schools reopening, employees may likely use this leave in situations where their students are able to physically attend school but must subsequently stay away due to concerns of COVID-19 exposure in the classroom.
How Much SB 95 Leave Must an Employer Provide?
The amount of leave an employee is able to take depends on their work schedule. The hours provided under 2021 SPSL is in addition to the 24 hours or three days of paid sick leave required under the California Healthy Workplace Health Family Act of 2014 (otherwise known as California Paid Sick Leave or PSL). For more on PSL read here, here, here, and here. The employee decides how many hours of 2021 SPSL to use up to the number of hours the employee is entitled upon oral or written request. Employees who used 80 hours in 2020 are entitled to take up to an additional 80 hours of COVID-19 related sick leave. The 2021 SPSL FAQs 12-15 (here) describe how many hours of 2021 SPSL covered employees can take, and how much an employer must pay them for taking this leave.
- Up to 80 hours for employees considered “full time” by the employer and those that worked, on average, at least 40 hours per week for two weeks preceding the date the employee takes leave.
- Firefighters scheduled to work more than 80 hours per week are entitled to leave equal to the total number of hours that the firefighter was scheduled to work for the employer in those two preceding weeks.
- Part time employees receive the total number of hours normally scheduled to work over two weeks.
- Employees with varying schedules will receive 14 times the average number of hours worked each day in the six months preceding the date the employee takes leave.
- Employees employed fewer than six months but more than 14 days are entitled to the average number of hours worked each day prior to the date the employee takes leave.
- Employees working less than 14 days and who have a variable schedule are entitled to the total number of hours worked for that employer.
SB 95 addresses the Cal/OSHA’s COVID-19 Emergency Temporary Standards (“ETS”) by stating that in order for employers to comply with ETS’ requirement to maintain the earnings of employees exposed to COVID-19 and excluded from the workplace (also referred to as exclusion pay), employers may require an employee to first exhaust their 2021 SPSL.
The Cal/OSHA Board approved the ETS on November 30, 2020 (read our blog here or listen to our podcast here) and requires California employers to develop a COVID-19 prevention program, including the requirement to identify and address hazards, use of face coverings, and physical distancing. The ETS requires employers who exclude an employee from the workplace due to COVID-19 exposure in the workplace to provide the excluded employee with pay and benefits. Under the ETS, the employer may require an employee to exhaust PSL benefits before providing exclusion pay. Now, with 2021 SPSL, the employer may require the employee to use up to 80 hours of 2021 SPSL plus their 24 hours/three days of PSL. The California Labor Commissioner maintains a COVID-19 Emergency Temporary Standards Frequently Asked Questions that it updates on a regular basis (click here). The last update was on March 10, 2021 regarding exclusion pay.
Providers of in-home supportive services must inform the recipient of the need to take sick leave and submit a sick leave claim to the county consistent with established procedures in that county.
What is the Rate of Pay for SB 95 Leave?
The employer must pay the highest of the following rates:
- Rate calculated in the same manner as the regular rate of pay for the workweek in which the employee uses COVID-19 supplemental paid sick leave, whether or not the employee actually works overtime in that workweek. The regular rate of pay includes a number of different kinds of remuneration, such as hourly earnings, salary, piecework earnings, and commissions. In no case may the regular rate of pay be less than the applicable minimum wage. Read our blog here on the regular rate of pay. Our recent podcast also discusses the regular rate of pay here.
- Rate calculated by dividing the 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.
- The California minimum wage.
- The local minimum wage.
The rate of pay for providers of in-home supportive services is the regular rate of pay to which the provider would be entitled if the provider had been scheduled to work those hours pursuant to existing law or an applicable collective bargaining agreement.
For exempt employees, the rate of pay must be calculated in the same manner that the employer calculates wages for other forms of paid leave.
The amount of pay is capped at $511 per day and $5,110 total per employee.
What are the SB 95 Notice Requirements?
Employers must also provide notice to employees either by posting the notice in the workplace or by distributing it electronically, such as through email. The Labor Commissioner already created a model notice to comply with this posting requirement available here.
What are the SB 95 Wage Statement Requirements?
SB 95 also imposes a wage statement requirement similar to that required by the California PSL law as follows:
- Show the COVID-19 supplemental paid sick leave separately from the 24 hours or three days of paid sick leave.
- For part-time or variable schedules, the employer may do an initial calculation of leave time and add the notation “variable” next to it. However, the employer must update the calculations when employees request use of their COVID-19 supplemental paid sick leave.
Employers must retain records documenting the hours worked and leave provided for at least three years.
What is the Retroactive Payment Requirement?
The legislature intended for SB 95 to apply retroactively to leave for qualifying reasons in order to protect the “economic well-being” of eligible employees. Employers must provide retroactive payment to an eligible employee who requests such compensation. The retroactive payment will count towards meeting the total number of hours an employer is required to provide under SB 95. The retroactive payment must be made in the next full pay period after the oral or written request of the eligible employee. The wage statement must identify the corresponding pay period covered by the retroactive payment.
The 2021 SPSL FAQ contains additional guidance on retroactive payments and provides an example in FAQ 10:
For example, if a covered employee had to take two hours off for a vaccine appointment on February 15, 2021, the employee can make an oral or written request to the employer to be paid for that time off in February, since it is a qualifying reason for taking 2021 COVID-19 Supplemental Paid Sick Leave. The oral or written request must be made on or after March 29, 2021. A request made before March 29 does not count. If an employee is unable to make the request themselves or has difficulty locating an employer to provide proper notice, they may contact the Labor Commissioner’s Office, which may be able to provide assistance.
After the employee makes the request, the employer will have until the payday for the next full pay period to pay the “retroactive” 2021 COVID-19 Supplemental Paid Sick Leave. On that payday, the employer must also provide accurate notice on the itemized wage statement of how many 2021 COVID-19 Supplemental Paid Sick leave hours remain available to the covered employee.
For more information relating to retroactive pay, see the following FAQs:
- FAQ 10. How does a covered employee request “retroactive” 2021 COVID-19 Supplemental Paid Sick Leave for leave taken between January 1, 2021 and March 28, 2021?
- FAQ 16. If an employer makes a “retroactive” payment on or after March 29, 2021 to a covered employee for leave taken before the date the 2021 COVID-19 Supplemental Paid Sick Leave law becomes effective, then does the employer receive any credit towards the requirement to provide 2021 COVID-19 Supplemental Paid Sick Leave?
- FAQ 17. If an employer voluntarily pays another supplemental benefit for COVID-19 related sick leave, including for leave that was taken before the 2021 COVID-19 Supplemental Paid Sick Leave law became effective, then may the employer receive a credit toward the requirements in the new 2021 COVID-19 Supplemental Paid Sick Leave law?
What Tax Credits are Potentially Available to Employers Who Provide SB 95?
On March 11, 2021, President Biden signed the H.R. 1319, the American Rescue Plan Act of 2021, into law (“American Rescue Plan”). This new COVID-19 relief package contains paid sick leave implications for employers with fewer than 500 employees who continue to provide paid sick leave due to employees for COVID-19 reasons. The following is a summary.
- The tax credit for employers who voluntarily provide FFCRA leave was set to expire on March 31, 2021. The American Rescue Plan extends the deadline to September 30, 2021.
- The American Rescue Plan provides tax credits for the original six reasons for FFCRA leave (read here) and adds two new qualifying reasons for employees who need leave: (1) 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 or the employee’s employer has requested such test or diagnosis; and (2) obtaining immunization (vaccine) related to COVID–19 or recovering from any injury, disability, illness, or condition related to such immunization. These two new reasons are similar to the leave provided under 2021 SPSL.
- The aggregate amount of Emergency FMLA was raised from $10,000 to $12,000.
- Adds a non-discrimination provision to allow all employees to receive the FFCRA leave which will affect employers who selected to provide FFCRA leave to a select group of employees instead of all employees. Specifically, the American Recovery Plan prohibits discrimination against highly compensated employees, full-time employees or employees on the basis of tenure. Under 2021 SPSL, all employees who are unable to work to telework are entitled to 2021 SPSL.
- Employees who previously took FFCRA will be eligible for another 80 hours on April 1, 2021. This impacts employer’s ability to claim a tax credit for employees in 2021.
How Will Compliance with SB 95 Be Enforced?
The Labor Commissioner will enforce SB 95’s COVID-19 supplemental paid sick leave in the same manner if enforces the California’s paid sick leave requirements.
Takeaways for Affected Employers
- Review the FAQs provided by the Labor Commissioner.
- Download the applicable notice (see link), post it, and distribute it to employees if you are a covered employer.
- Immediately review and update paid sick leave policies and handbooks.
- Create a new line item on the wage statements that differentiates between the 24 hours or three days of California paid sick leave (“PSL”) and 2021 SPSL hours, including the amount available and used.
- Consult with a qualified CPA or Tax Attorney about obtaining tax credits for SB 95 leave.
- We will be discussing this and other leave issues in our upcoming California Workplace Leave Issues webinar on May 5, 2021. For more information and to sign up for this and other events, visit our Events Page.