Alert / Employee Benefits
California enacts retroactive supplemental paid sick leave

Time to rewind as California enacts retroactive supplemental paid sick leave for employees impacted by COVID-19

On March 19, 2021, California Governor Gavin Newsom signed into law Senate Bill 95 which requires covered California employers to provide employees with supplemental paid sick leave (SPSL) for certain absences related to the COVID-19 pandemic. While the law is similar to the 2020 food sector and non-food sector supplemental paid sick leave laws, the coverage is broader. This alert provides the highlights of Senate Bill 95.

Which employers are covered by SB 95?

California employers with more than 25 employees, including those covered by a collective bargaining agreement, are required to provide this SPSL. Unlike its 2020 predecessor, this new law defines employer to include the state, political subdivisions of the state and municipalities. Small businesses with 25 and fewer employees are exempt from this California law but may choose to voluntarily offer leave and receive a federal tax credit if they are meeting the requirement of the American Rescue Plan Act (ARPA) of 2021.

Lockton comment: In terms of counting the number of employees, a California employer with more than 25 employees nationwide is covered by the SPSL law. For example, an employer with one employee in California but 25 or more additional employees nationwide is required to provide the SPSL to the California employee.

When does the law begin?

While Gov. Newsom signed the bill into law on March 19, 2021, with a March 29 effective date, it provides for supplemental paid sick leave retroactively to Jan. 1, 2021 and extends through Sept. 30, 2021. [Note: a covered employee taking SPSL on Sept. 30, 2021 is permitted to continue that leave and take the full amount of SPSL following the expiration of the law]. Employees who had an unpaid absence related to COVID-19 as of Jan. 1, 2021 to present may be entitled to up to 80 hours of retro pay for that absence. See below for more information on the impact of retroactivity.

Who is a covered employee?

Unlike the predecessor bill, the new SPSL provides that an employee who is unable to work or telework for a qualifying reason is a covered employee for purposes of the law. There is no length of service requirement to be eligible for SPSL. Independent contractors are not covered.

When can a covered employee take SPSL?

The new law allows covered employees to use SPSL when they are unable to work or telework in the following circumstances:

  • Caring for oneself: When the covered employee is subject to a quarantine or isolation period related to COVID-19, has been advised by a healthcare provider (HCP) to self-quarantine due to concerns related to COVID-19, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis
  • Caring for a family member: The covered employee is caring for a family member who is subject to a quarantine or isolation period related to COVID-19 or has been advised by a HCP to quarantine due to COVID-19, or the covered 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
  • COVID-19 vaccine related: The covered employee is attending an appointment to receive a COVID-19 vaccine or is experiencing symptoms related to a COVID-19 vaccine that prevents the employee from being able to work or telework

Lockton comment: A general stay-at-home order will not qualify a covered employee for SPSL. The quarantine or isolation period related to COVID-19 must be defined by an order or guidelines from the California Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer with jurisdiction over the workplace.

Can an employer require documentation to support the basis for the SPSL request?

No. A covered employee is entitled to SPSL immediately upon the covered employee’s oral or written request. The leave cannot be conditioned on receipt of a medical certification. Similar to the 2020 law, although an employer cannot deny the SPSL solely for lack of a medical certification, the employer may request reasonable supporting verification or documentation before paying the SPSL if there is information indicating that the covered employee is not using SPSL for a valid purpose. The employer’s actions in this regard must be “reasonable” under the particular circumstances.

Lockton comment: To the extent an employee is seeking SPSL for time off related to receiving the COVID-19 vaccine, an employer can ask for proof of the vaccine once the employee is vaccinated. The employer should caution the employee to only provide proof of the vaccine and not any medical information.

How much SPSL is available to covered employees?

Similar to the prior law in 2020, the number of hours of SPSL depends on the employee’s work schedule. The leave amount represents the number of hours of SPSL the employee may use through Sept. 30, 2021, and is determined as follows:

Full-time employees
A covered employee is entitled to up to 80 hours of SPSL if (a) the employer considers the covered employee to work full time or (b) the covered employee worked or was scheduled to work on average at least 40 hours per week for the employer in the two weeks preceding the date the covered employee took SPSL. Special rules apply to firefighters. If a firefighter was scheduled to work more than 80 hours in the two weeks preceding the date the covered firefighter took SLSL, the firefighter is entitled to an amount of SPSL equal to the total number of hours the firefighter was scheduled to work in those two preceding weeks. The firefighter is still limited to receiving the maximum benefit of $511 per day or $5,100 in total.

Other employees who work less than full time (40 hours per week)

  • Employees with a normal weekly schedule are entitled to the total number of hours normally scheduled to work for the employer over two weeks
  • Employees with a variable number of hours are entitled to 14 times the average number of hours worked each day for the employer in the six months preceding the date the covered employee took SPSL (or if employed less than six months but more than 14 days, use the daily average over the entire period the employee has worked for the employer)
  • Employees with a variable schedule and who have worked 14 days or less are entitled to the total number of hours worked for the employer as of the date the covered employee took SPSL

Can the employer decide whether, and to what extent, a covered employee may use SPSL?

No. Only the employee can determine whether to use SPSL and how many hours to use subject to the employee’s maximum allotment (up to 80 hours for full time). SPSL is in addition to any paid sick leave required under the California paid sick leave law.

An employer cannot require a covered employee to use any other paid or unpaid leave, paid time off, or vacation time provided by the employer before the covered employee uses SPSL or in lieu of the SPSL. The only exception is that when an employer is satisfying the Cal OSHA COVID-19 Emergency Temporary Standards or the Cal-SOHA Aerosol Transmissible Diseases Standard, an employer may require a covered employee to first exhaust their SPSL under this section.

Employers must make SPSL available to covered employees for immediate use upon the oral or written request of the covered employee to the employer.

At what rate of pay are covered employees compensated for SPSL?

Non-exempt covered employees must be paid at an hourly rate equal to the highest of the following:

  • The covered employee’s regular rate of pay for the last pay period including amounts pursuant to any applicable collective bargaining agreement
  • The state minimum wage or
  • The local minimum wage to which the covered employee is entitled

For exempt covered employees, SPSL is calculated in the same manner as the employer calculates wages for other forms of paid leave time.

For all covered employees, pay is capped at $511 per day and $5,110 in the aggregate for SPSL absent federal legislation increasing these amounts.

Starting on or after March 29, 2021, payment of SPSL must be made no later than the payday for the next regular payroll period after the leave was taken.

What if an employer provided paid leave to a covered employee with a COVID-19 related absence after Jan. 1, 2021, and before March 19, 2021?

If the covered employee was compensated in an amount equal to or greater than the amount of compensation for SPSL, then the employer may count the hours of the other paid benefit or leave towards the total number of hours of SPSL that the employer is required to provide under the new SPSL. This includes paid leave provided by the employer pursuant to any federal or local law in effect or that became effective on or after Jan. 1, 2021, if the paid leave is provided to the covered employee under that law for any of the reasons SPSL can be taken. Note that this must be a supplemental benefit, so paid leave used under the California Healthy Workplaces, Healthy Families Act, the Paid Sick and Safe Time law, or 2020 SPSL would not qualify to offset the 2021 SPSL obligation.

What if a covered employee now requests pay for a COVID-19 related absence that occurred after Jan. 1, 2021, and before March 19, 2021?

If the employer did not compensate the covered employee in an amount equal to or greater than the amount of SPSL to which the covered employee is entitled to, then upon the oral or written request of the employee, the employer shall retroactively pay the employee. The requirement to provide retroactive pay does not begin until March 29, 2021. For any such retroactive payment, the number of hours of leave corresponding to the amount of the retroactive payment shall count towards the total number of hours of COVID-19 SPSL that the employer is required to provide to the covered employee under the new law. The retroactive payment shall be paid on or before the payday for the next full pay period after the oral or written request of the covered employee. The retroactive payment shall be reflected on the wage statement or a separate writing.

Lockton comment: Guidance from the Labor Commissioner makes it clear that any request by an employee for compensation for a reason that would qualify for SPSL made before March 29, 2021, does not trigger a duty to pay retroactively. Any request for reimbursement must be made on or after March 29, 2021. For instance, if an employee made a request in February for reimbursement for time taken off work to receive the COVID-19 vaccine at that time, there is no duty to reimburse. If the employee makes a renewed request for payment for this same February time on or after March 29, 2021, the employer has until the payday for the next full pay period to pay the retroactive SPSL.

Are there any notice requirements related to the SPSL?

Yes. Covered employers must post this poster issued by the California Labor Commissioner in a conspicuous place in the workplace. If employees are not physically present in the workplace, the poster may be disseminated electronically, such as via email.

Additionally, employers must provide notice of the amount of SPSL available each pay period either on the employee’s wage statement or a separate writing provided each payday. The SPSL must be separately tracked from other paid sick leave. For employees with a variable schedule, the pay statement can indicate the SPSL calculation is variable (e.g., 64 hours (variable)). This notice requirement goes into effect the first full pay period following March 29, 2021.

Is the SPSL different from the 2020 COVID-19 related paid sick leave provided under the federal Families First Coronavirus Response Act (FFCRA) or the California COVID-19 Supplemental Paid Sick Leave laws?

Yes. These laws expired Dec. 31, 2020. The FFCRA provisions are now voluntary for employers with fewer than 500 employees. The SPSL is mandatory and provides covered employees with a new bank of leave for up to 80 hours for qualified reasons.

What remedies are available to covered employees if the employer violates the SPSL law?

Employees exercising their rights to receive SPSL are protected from retaliation. The Labor Commissioner is authorized to enforce the requirements of this SPSL. In the event SPSL is unlawfully withheld, the employer faces administrative penalties of up to $4,000. Civil actions seeking legal and equitable relief for violation of the SPSL provisions may be filed by the Labor Commissioner or Attorney General.

Conclusion

Additional FAQs from the California Labor Commissioner can be found here.

While this alert focuses on the provisions of the 2021 SPSL that apply to employers generally, note that California Labor Code section 248.3 contains provisions that pertain specifically to providers of in-home supportive and/or waiver personal care services.

Lockton will continue to monitor developments and keep employers informed. Please contact your Lockton account team with your specific questions.

Not legal advice: Nothing in this communication should be construed as legal advice. Lockton may not be considered your legal counsel, and communications with Lockton's HR Compliance Consulting group are not privileged under the attorney-client privilege.

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