March 23, 2021

Supplemental Paid Sick Leave Returns: Retroactive Application, Immediate Consequences for California Employers

On March 19, 2021, Governor Newsom injected new life into previously expired statewide COVID-19 Supplemental Paid Sick Leave (SPSL) benefits. By signing Senate Bill (“SB”) 95, eligible California employers must once again provide covered employees with SPSL for COVID-19 related absences in addition to existing paid time off and vacation benefits. Though employers have a built-in 10-day grace period before they must begin providing SPSL, the bill takes effect immediately, is retroactive to January 1, 2021, and will remain in effect through September 30, 2021.

Which Employers Are Covered? The bill has broad application throughout the state, applying to employers with 25 or more employees and specifically covers providers of in-home supportive services and personal waiver care services. It applies to all employers, public or private, and includes those with collective bargaining agreements. SB 95 dramatically expands application of SPSL throughout the state as the prior 2020 Supplemental Paid Sick Leave law, codified in Labor Code section 248, applied only to employers with 500 or more employees in the United States.

Which Employees Are Covered? Unlike the bill’s eligibility requirement for employers, there are no similar eligibility or length of service requirements for employees. Under SB 95, covered employees are entitled to paid sick leave that is in addition to leave that was provided under the previous SPSL which expired on December 31, 2020. But, unlike the 2020 COVID-19 SPSL law that applied to food sector workers, the new law does not include independent contractors.

Under What Circumstances Can Employees Take SPSL? The bill defines a “covered employee” as any employee who is unable to work or telework for an eligible employer because of any the following reasons, any one of which is sufficient for SPSL:

  • The employee is subject to a quarantine or isolation period 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 vaccine for protection against contracting COVID-19;
  • 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 a medical diagnosis;
  • The employee is caring for a family member who is subject to a quarantine or isolation order; or
  • 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.

Employers should be aware that the circumstances under which a covered employee may take SPSL under the 20201 law significantly expanded the circumstances previously available under the state’s 2020 SPSL law.

How Much SPSL Are Employees Entitled to and What is the Rate of Pay? The amount of SPSL available to covered employees, as well as the individual rate of pay for SPSL, are dependent on a number of factors:

  • Full Time vs. Part Time: Full-time employees (those who are scheduled to work, on average, 40 hours or more per week) are entitled to 80 hours of SPSL under the bill. Employees who work less than 40 hours per week receive SPSL under the bill in one of three different ways based primarily on the employee’s work schedule and length of employment:
    • Employees with a regular schedule are entitled to the total number of hours the employee is normally scheduled to work for the employer over two weeks;
    • Employees with a variable schedule are entitled to 14 times the average number of hours the employee worked each day for the employer in the six months preceding the leave; or
    • Employee with a variable schedule who have worked for the employer for 14 days or less are entitled to the total number of hours the employee has worked for the employer.
  • Rate of SPSL Compensation: the rate of pay for covered employees depends on the employee’s exempt or non-exempt status. Under the bill, exempt employees are entitled to SPSL compensation at the rate that the employer calculates wages for other forms of paid leave time. The bill specifically limits SPSL at $511 per day and $5,110 in the aggregate for all covered employees, regardless of exempt or non-exempt status. The bill sets the compensation rate for non-exempt employees by requiring employers to pay the highest of the following:
    • The employee’s regular rate of pay for the workweek in which the employee uses the leave;
    • Dividing the covered employee’s total wages (not including overtime) by the employee’s total hours worked in the full pay period of the prior 90 days of employment;
    • The state minimum wage; or
    • The local minimum wage to which the employee is entitled

What Restrictions Are Placed on Employees’ Use of SPSL? The short answer is, not many. The bill prohibits employers from requiring that covered employees use other paid or unpaid leave (such as PTO, other sick leave, or vacation) before the employee uses SPSL authorized under the new law except in limited circumstances. Employees are additionally free to independently determine when and how much SPSL they need to use. Finally, the bill does not contain language that would otherwise authorize or permit employers from requiring a covered employee to demonstrate proof or verification of the reasons underlying a request for SPSL.

Can Employers “Off-Set” SPSL Leave Against COVID-19 Sick Leave Previously Provided? Yes, under certain circumstances. If an employer has already provided another supplemental benefit for COVID-19 related sick leave that was taken before SB 95 became effective (for example, an employer already voluntarily provided a covered employee with other COVID-19 related paid sick leave between January 1, 2021, and March 28, 2021), the employer may receive credit toward the requirements under SB 95 as long as the prior benefits meet the requirements in the law.

Are There Any Other Immediate Consequences for Employers? Eligible employers have little time to adapt existing policies, procedures, and protocols to comply with the many significant changes encompassed in SB 95. Among these are:

  • Immediate Notice Requirements: SB 95 directs the Labor Commissioner’s office to release a model notice within 7 days of the passing of the bill. Beginning on March 26, 2021, employers must display the required notice in their workplace. If an employer has employee who do not regularly frequent the workplace due to COVID-19 reasons or otherwise, the employer may satisfy the notice requirement by disseminating the required notice through electronic means, such as email.  A copy of the required posting is now available, and accessible by clicking here.

 

  • Immediate Changes to Paystubs: in what will likely be the most difficult change for employers not previously covered by the state’s 2020 SPSL laws, information concerning SPSL must be listed on employee paystubs or other written notices that employees receive on payday. SB 95 specifically requires that SPSL be separately listed from paid sick leave on employee paystubs. The bill imposes additional paystub requirements for part-time and variable hour employees.

 

  • Immediate Retroactivity: because the bill applies retroactively to January 1, 2021, employers must consider the need to make retroactive payments for COVID-19 leave. If retroactive payments are required, such payments should be paid on or before the payday for the next full pay period after an oral or written request is made by a covered employee for retroactive SPSL leave.

While this summary covers many of SB 95’s immediate changes and consequences to supplemental paid sick leave in California, there are others. And, although California’s new SPSL law may appear to resemble aspects of the state’s 2020 SPSL law, there are significant differences. If you have any questions, please reach out to us for assistance.

Questions about COVID-19 and the workplace? Contact the Hirschfeld Kraemer lawyer who normally provides your legal advice, or you can reach out to Adam Maldonado in Hirschfeld Kraemer’s San Francisco office, amaldonado@hkemploymentlaw.com, (415) 835-9075.