California COVID-19 Supplemental Paid Sick Leave is Back in 2022 with Different Provisions

By XobeeAdmin on February 11, 2022 in Legal Update
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On February 9, 2022, Governor Newsom signed SB 114 into law, which requires California employers with 26 or more employees to provide up to 80 hours of supplemental paid sick leave for qualifying COVID-19-related reasons (“2022 SPSL”). The obligation to provide the new paid sick leave begins on February 19, 2022. As before, employers must also provide retroactive pay from January 1, 2022 to employees who took leave for COVID-19 qualifying reasons. The law expires on September 30, 2022. There are significant differences in the 2022 law compared to prior requirements as will be discussed in this blog. This blog focuses primarily on the provisions that apply to employers in general which are found under new California Labor Code section 248.6.

Background

The last California COVID-19 supplemental paid sick leave requirement expired on September 30, 2021 (read here) and was not extended. For background on prior paid sick leave requirements related to COVID-19, read our past blogs:

Which Employers are Covered by SB 114?

SB 114 adds sections 248.6 and 248.7 to the California Labor Code.

  • Labor Code section 248.6 applies to employers who employ more than 25 employees.
  • Labor Code section 248.7 applies to providers of in-home supportive services.

Which Employees are Eligible for SB 114 Leave?

Labor Code 248.6 defines a “covered employee” as an employee “unable to work or telework” because of a qualifying reason (see below).

What are the Qualifying Reasons under SB 114?

The 2022 SPSL requirements are broader than prior law. First, 2022 SPSL allows employees to use leave to care for “family members” which includes the employee’s parent, child, spouse, registered domestic partner, grandparent, grandchild, and sibling. Second, there are more reasons for leave than before.

Under Labor Code 248.6(b)(1), employers must pay COVID-19 supplemental paid sick leave to employees absent as of January 1, 2022 through September 30, 2022 for the following reasons with new language identified in bold:

  1. Employee is subject to a quarantine or isolation period related to COVID-19 as defined by federal, state, or local orders or guidance.
  2. Employee is advised by a health care provider to self-quarantine or isolate (new requirement) due to concerns related to COVID-19.
  3. Employee or family member (new requirement) is attending an appointment to receive a COVID-19 vaccine or booster (new requirement) with certain limitations discussed below.
  4. Employee or family member (new requirement) is experiencing symptoms related to a COVID-19 vaccine or booster (new requirement) that prevent the employee from being able to work or telework with certain limitations discussed below.
  5. Employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.
  6. Employee is caring for a family member who is subject to a quarantine or isolation order or guidance or who has been advised to self-quarantine or isolate (new requirement) by a health care provider due to concerns related to COVID-19.
  7. 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.
  8. Employee tests positive, or is caring for a family member who tests positive, for COVID-19.

Employers may impose certain limitations related to vaccine or booster appointments and related side effects. For each vaccination or vaccine booster, an employer may limit the total 2022 SPSL to 3 days or 24 hours unless the employee provides verification from a health care provider that the covered employee or their family member is continuing to experience symptoms related to a COVID-19 vaccine or vaccine booster. The 3-day or 24-hour limitation applied to each vaccine or vaccine booster includes the time used to get the vaccine or vaccine booster.

How Much SB 114 Leave Must an Employer Provide?

The main difference from prior law is that the 80 hours falls into two leave banks of 40 hours each, and employees are entitled to leave under each 40-hour bank. The total amount of 2022 SPSL is 80 hours depending on the employee’s work schedule. For example, full-time employees are eligible for 80 hours, and other employees are eligible for a proportionate share based on their work schedule.

  • First 40-hour bank. Up to 40 hours is available to employees only if the employee tests positive for, or is caring for a family member who tests positive for, COVID-19. An employer may require the employee to submit to a “diagnostic test” on or after the fifth day after the employee initially tests positive for COVID-19. The employer must make the test available at no cost to the employee. If the family member tests positive, the employer may require the employee to provide documentation of the family member’s test results before paying the additional leave. The employer is not required to provide 2022 SPSL from this 40-hour bank if the employee refuses to provide the documentation of the test results upon the employer’s request. An employee does not need to exhaust leave from their second 40-hour bank before using hours under the first leave bank.
  • Second 40-hour bank. This second set of 40-hours is available for other qualifying reasons.

The hours provided under 2022 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. This leave is also in addition to any other paid leave time provided by employers such as vacation time or paid time off.

How does SB 114 interact with Cal/OSHA’s COVID-19 Emergency Temporary Standards?

Under SB 114, an employer may not require an employee to first exhaust their 2022 SPSL if Cal/OSHA’s COVID-19 Emergency Temporary Standards (“ETS”) requires an employer to maintain an employee’s earnings when an employee is excluded from the workplace.

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. Cal/OSHA has revised the ETS periodically and the latest revisions to the ETS went into effect on January 14, 2022. See here for the most recent ETS FAQs.

What is the Rate of Pay for SB 114 Leave?

The rate of pay is different from 2021. For 2022, the employer must pay the rate equal to the following for non-exempt employees:

  • 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. Read our blog here on the regular rate of pay. Our 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 non-overtime hours worked in the full pay periods of the prior 90 days of employment, provided that, for nonexempt employees paid by piece rate, commission or other method that uses all hours to determine the regular rate of pay, total wages, not including overtime premium pay, shall be divided by all hours

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, unless subsequent federal legislation increases these amounts.

What are the SB 114 Notice Requirements?

As before, 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 will create a new model notice to comply with this posting requirement.

What are the SB 114 Wage Statement Requirements?

SB 114 also imposes a wage statement requirement similar to that required by the California PSL law and prior law. SB 114 is unlike the 2021 law where employers had to display the “available” amount of SPSL. However, for 2022, employers only need to show “0” hours used if the employee has not used any 2022 SPSL and adjust the “use” balance each time the employee uses 2022 SPSL. This requirement goes into effect in the next full pay period following February 19, 2022. Given the two-bank setup, employers will wonder whether they must include two separate lines (one for each bank) or a single line (representing aggregate leave used from both banks); however, the law does not address this issue, so employers need to obtain guidance from the California Labor Commissioner.

What is the Retroactive Payment Requirement?

The legislature intended for SB 114 to apply retroactively to leave for qualifying reasons in order to protect the “economic well-being” of eligible employees. If an employee requests compensation under 2022 SPSL, the employer must provide such payment on or before the payday for the next full pay period after the oral or written request, and payment of those hours must appear on the wage statement. Payment of those hours should be made consistent with the requirements of SB 114. Any voluntary pay previously provided must also meet the requirements of SB 114 for an employer to receive an offset in complying with current law, which may mean issuing the employee a check for the difference if the rate for a prior absence was lower than required by SB 114.

Former employees may contact employers requesting retroactive pay. The conservative route for employers is to pay the former employee and avoid a claim. Employers should keep in mind that former employees may not be entitled to the full 80 hours because there are two separate leave banks, and the employer may want to exercise their right to request documentation. However, for guidance addressing specific employee scenarios, employers should contact qualified legal counsel.

What Tax Credits are Potentially Available to Employers Who Provide SB 114?

Currently, there is no tax credit.

What if an employer has paid for COVID-19 qualifying reasons in 2022 prior to SB 114?

Any other paid leave provided pursuant to any federal or local law that became effective January 1, 2022 will count towards meeting the requirements under SB 114 if the employer compensated the employee at the rate required under SB 114 or greater and for the law’s covered reasons. Note, this must be a supplemental benefit, so employers cannot count the 24 hours or three days of paid sick leave required under California law..

What about qualifying supplemental benefits paid in 2022, but before the law took effect that were compensated at a pay rate lower than what the California law requires?

An employer must true-up (i.e., increase retroactively) the pay to what California’s law would have required (had it been in effect when the employee took leave in 2022), such that the leave qualifies for the offset. If a payment is made due to an employee’s oral or written true-up request, payment must be made on or before the payday for the next full pay period after the request.

Additionally, a new provision addresses situations when the employer paid an amount equal to or greater than what 2022 SPSL requires. In this situation, if an employee requests that 2022 SPSL be applied to the prior absence, the employer must apply (or “credit”) 2022 SPSL to that absence, rather than using the other benefit that was applied to the absence.  Employers might expect to see such a request if, for example, in the period before the SPSL obligation begins, the employee had to use paid sick leave to cover an absence.

How Will Compliance with SB 114 Be Enforced?

The Labor Commissioner will enforce SB 114’s COVID-19 supplemental paid sick leave in the same manner if enforces the California’s paid sick leave requirements.

Takeaways for Affected Employers

  • Check the Labor Commissioner’s COVID-19 Guidance and Resources page (here) for upcoming FAQs, including workplace posting.
  • Download the applicable notice (once available here), 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 2022 SPSL hours, including the amount available and used.
  • Review the revised ETS requirements here.
  • We will be discussing this and other leave issues in our upcoming California Mid-Year Employment Law Update. For more information and to sign up for this and other events, visit our Events Page.