On March 19, 2021, Governor Newsom signed into law the California Legislature passed Senate Bill (“SB”) 95[1], codifying at Labor Code section 248.2 new obligations on employers to provide COVID-19 Supplemental Paid Sick Leave to employees who are unable to work or telework for certain qualifying reasons. SB 95 entitles a new employee to this leave retroactive to January 1, 2021[2] and effective through September 30, 2021.[3],[4] This requirement takes effect on March 29, 2021.
I. New Employer Obligations to Provide COVID-19 Supplemental Paid Sick Leave
Employers must now provide paid leave to employees for reasons related to COVID-19. SB 95 provides rules for: (1) which employees are eligible; (2) the qualifying reasons for the leave; (3) the amount and level of compensation for the paid sick leave benefit; (4) the obligation to retroactively apply the new obligations; and (5) employer notice requirements.
A. Employee Eligibility for COVID-19 Supplemental Paid Sick Leave
Under Labor Code section 248.2, employers that employ more than 25 employees[5], including schools and non-profits, must provide COVID-19 Supplemental Paid Sick Leave to any employee who is unable to work or telework due to one of the qualifying reason discussed in the next section.[6]
As a result, any employer that employs more than 25 employees should immediately begin to prepare a COVID-19 Supplemental Paid Sick Leave policy that will provide the paid leaves discussed herein to qualified employees.
B. Qualifying Reasons for COVID-19 Supplemental Paid Sick Leave
In order for an employee to qualify for COVID-19 Supplemental Paid Sick Leave, the employee must be unable to work or telework because the employee is:[7]
-
- Subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of the State Department of Public Health (“CDPH”), the federal Centers for Disease Control and Prevention (“CDC”), or a local health officer who has jurisdiction over the workplace.[8]
- Advised by a health care provider to self-quarantine due to concerns related to COVID-19.[9]
- Experiencing symptoms of COVID-19 and seeking a medical diagnosis.[10]
- Caring for a family member[11] who is subject to a quarantine or isolation order or guidelines described above, or who has been advised to self-quarantine by a health care provider.[12]
- Caring for a child[13] whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.[14]
- Attending an appointment to receive a vaccine for protection against contracting COVID-19.[15]
- Experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.[16]
While the new law does not expressly provide a qualifying reason for employees excluded from the workplace as a result of a “close contact” exposure in the workplace, the law allows an employer to require that an employee use COVID-19 Supplemental Paid Sick Leave for such purpose.[17]
C. Benefits under COVID-19 Supplemental Paid Sick Leave
1. Leave Amounts
Employees who qualify to receive COVID-19 Supplemental Paid Sick Leave will be entitled to up to 80 hours of such paid leave if they are full-time employees.[18] Part-time employees will be entitled to a prorated amount of such leave based on their normally scheduled work hours over a two-week period.[19]
COVID-19 Supplemental Paid Sick Leave is intended to supplement, and not run concurrent with, paid sick leave entitlements provided to employees under the state paid sick leave law.[20] Specifically, Labor Code section 248.2 states that “[a]n employer shall not require a[n] employee to use any other paid or unpaid leave, paid time off, or vacation time provided by the employer to the covered employee before the covered employee uses COVID-19 [S]upplemental [P]aid [S]ick [L]eave or in lieu of COVID-19 [S]upplemental [P]aid [S]ick [L]eave.”
2. Compensation for Leave
Employees who qualify to receive COVID-19 Supplemental Paid Sick Leave will be compensated for each hour of such leave at their “regular rate of pay” up to $511 per day and $5,110 in the aggregate.[21],[22]
D. Retroactive Application of Paid Leave Obligations
The paid leave obligations are retroactive to January 1, 2021.[23] Employers must calculate and be prepared to compensate employees who took leave between January 1, 2021, and the date that the employer adopted a COVID-19 Supplemental Paid Sick Leave policy.
While Labor Code section 248.2 requires employers to provide a retroactive payment upon the oral or written request of the employee[24], employers may consider adopting a more proactive approach by calculating employees’ qualified leave usage and providing the required compensation.
Employers that elect not to take a more proactive approach should note that the retroactive payment must be paid on or before the next full pay period after the employee’s request.[25]
Regardless of the approach taken by employers to comply with the retroactive application of the paid leave obligations, the employer may count the retroactive COVID-19 Supplemental Paid Sick Leave provided against the total amount of COVID-19 Supplemental Paid Sick Leave to which the employee is entitled.
E. Employer Notice Obligations
This new law also requires employers to post or electronically submit a model notice related to COVID-19 Supplemental Paid Sick Leave. The Labor Commissioner has prepared a model notice that employers may use to satisfy the notice requirements concerning employee entitlement to COVID-19 Supplemental Paid Sick Leave, which is available here: https://www.dir.ca.gov/dlse/2021-COVID-19-Supplemental-Paid-Sick-Leave.pdf.[26]
As some schools and non-profits may have employees who work remotely, the model notice should be posted in a prominent location at all school and non-profit worksites and facilities and the model notice should also be sent by email to ensure that teleworking employees receive such notice in a timely manner.
II. Interaction between COVID-19 Supplemental Paid Sick Leave and the American Rescue Plan Act (“ARPA”)
The recently-enacted ARPA provided for an extension of payroll tax credits to employers that voluntarily provide Emergency Paid Sick Leave (“EPSL”) to employees between April 1 and September 30, 2021.
In the section below, we explain how the obligations set forth under Labor Code section 248.2 interact with the ARPA so that employers may use federal relief to offset some, if not all of the costs, incurred as a result of the new obligations related to the provision of COVID-19 Supplemental Paid Sick Leave.
A. Qualifying for the Receipt of Such Tax Credits
While employers are eligible to receive payroll tax credits, in order to qualify for receipt of such credits under the ARPA, the employer must provide its employees EPSL leave between April 1 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 may receive payroll tax credit, supplementing the five (5) qualifying reasons initially provided for under the FFCRA[27] with three (3) new qualifying reasons.
As a result of the expansion, if an employer wants to receive a payroll tax credit, it must provide its employees paid leave if they are unable to work or telework because the employee is:
-
- Subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
- Advised by a health care provider to self-quarantine related to COVID-19;
- Experiencing COVID-19 symptoms and is seeking a medical diagnosis;
- Caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
- Caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19;
- Obtaining immunization related to COVID–19; or
- Recovering from any injury, disability, illness, or condition related to such a COVID-19 immunization’ after medical diagnosis; or
- 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
As provided above, the first seven (7) qualifying reasons for expanded EPSL closely align with the qualifying reasons for COVID-19 Supplemental Paid Sick Leave provided for under Labor Code section 248.2, but the eighth (8th) qualifying reason provided for under ARPA is absent from the Labor Code.[28] Below is a chart comparing the specific statutory language used to describe the qualifying reasons for COVID-19 Supplemental Paid Leave required under Labor Code section 248.2 and the paid leaves for which an employer may qualify for payroll tax credit under the ARPA:
| Reasons obligating an employer to provide employee COVID-19 Supplemental Paid Sick under SB 95 |
Reasons for which an employer would be entitled to receive a payroll tax credit if it elects to provide employees EPSL under the American Rescue Plan Act |
| The employee is subject to a quarantine or isolation period related to COVID-19[29],[30] |
The employee is subject to a Federal, State, or local 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 has been advised by a health care provider to self-quarantine related to COVID-19 |
| The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis. |
The employee is experiencing COVID-19 symptoms and is seeking a medical diagnosis. |
| The employee is caring for a family member who is either: (1) subject to a quarantine or isolation period related to COVID-19; or (2) who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19 |
The employee is caring for an individual that is either: (1) subject to Federal, State, or local quarantine or isolation order related to COVID-19; or (2) has been advised by a health care provider to self-quarantine related to COVID-19. |
| 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. |
The employee is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; |
| The employee is attending an appointment to receive a vaccine for protection against contracting COVID-19. |
The employee is obtaining immunization [i.e., vaccination] related to 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 recovering from any injury, disability, illness, or condition related to such a COVID-19 immunization’ after ‘medical diagnosis’ |
|
The employee is 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 |
Given that Labor Code section 248.2 now requires that employers provide COVID-19 Supplemental Paid Sick Leave for the first seven (7) qualifying reasons, employers may consider providing their employees paid leave for the eighth (8th) qualifying reason for expanded EPSL in order receive payroll tax credits for the provision of such leave between April 1 and September 30, 2021.
B. Misalignment of Effective Dates for Paid Leaves under the American Rescue Plan Act and SB 95
Employers that are considering providing EPSL to employees voluntarily in order to qualify for the payroll tax credits should note that the timing of the paid leaves under the ARPA and Labor Code section 248.1 do not align, and that the misalignment may cause issues with the administration of such leaves. Under the ARPA, in order for an employer to qualify for payroll tax credits, it must provide qualified full-time employees up to 80 hours of leave to be used between April 1 and September 30, 2021.[31] However, under Labor Code section 248.2, employers must provide qualified employees COVID-19 Supplemental Paid Sick Leave up to 80 hours of leave effective January 1, 2021.[32] Because of the misalignment of effective dates for two leaves, employers that wish to receive payroll tax credits under the APRA will need to provide additional leave to employees who have used COVID-19 Supplement Paid Sick Leave between January 1 and March 31, 2021, as under ARPA all full-time employees must have 80 hours of expanded EPSL available to use on April 1, 2021.
Employers should contact a certified public accountant (“CPA”) or tax counsel in order to evaluate whether the receipt of the payroll tax credits is worth the time and expense of administering a leave program that will require that the employer provide employees additional paid leave rights on April 1, 2021.
As a result of these new leave rights, a school or non-profit that employs more than 25 employees should immediately begin to develop a policy to provide COVID-19 Supplemental Paid Sick Leave as required by SB 95. Employers should also begin calculating leaves provided to employees after January 1, 2021 in order to determine which prior employee leaves may qualify for payment under Labor Code section 248.2.
Liebert Cassidy Whitmore attorneys are familiar with obligations set forth in Labor Code section 248.2 and the operation of that law in conjunction with provisions of the ARPA. Should your school or non-profit have any questions about Labor Code section 248.2 and its potential effect on your school or non-profit’s leave policies and practices, please do not hesitate to contact the firm.
[1] SB 95 amended a companion bill in the Assembly, Assembly Bill (“AB”) 84, extending and expanding COVID-19 Supplemental Paid Sick Leave.
[2] Labor Code § 248.2(e)(1).
[3] Labor Code §§ 248.2(f), 248.3(e).
[4] Labor Code §§ 248.2(e)(1), 248.3(d)(1). Employers should also note that covered employees who take COVID-19 Supplemental Paid Sick Leave at the time of the expiration of such leave are entitled to take the full amount of leave to which they would have otherwise been entitled even if extends beyond on September 30, 2021. (See Labor Code § 248.2(f).)
[5] Labor Code § 248.2(a)(2).
[6] Labor Code § 248.2(a)(2).
[7] While the qualifying reasons for COVID-19 Supplemental Paid Sick Leave under Labor Code section 248.2 closely align with the qualifying reasons for expanded Emergency Paid Sick Leave (“EPSL”) under the FFCRA, they are not identical. For example, the expanded EPSL also includes a qualifying reason for employees who are seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID–19 after such employee has been exposed to COVID–19 or the employee’s employer has requested such test or diagnosis. As discussed later in this bulletin, employers that provide expanded Emergency Paid Sick Leave (“EPSL”) as provided for under the ARPA will be entitled to receive payroll tax credits for the provision of such paid leave.
[8] Labor Code §§ 248.2(b)(1)(A), 248.3 (b)(1)(A). Additionally, if an employee is subject to multiple applicable quarantine or self-isolation orders from the CDC, CDPH, or local health officers, “the covered employee shall be permitted to use COVID-19 supplemental paid sick leave for the minimum quarantine or isolation period under the order or guidelines that provides for the longest such minimum period.” (See Labor Code § 248.2 (b)(1)(A).) This new requirement provides a clear answer when an employee may be subject to multiple concurrent public health orders or guidance.
[9] Labor Code §§ 248.2(b)(1)(B), 248.3(b)(1)(B).
[10] Labor Code §§ 248.2(b)(1)(E), 248.3(b)(1)(E).
[11] “Family member” is defined as any of the following: (1) A child, which for purposes of this article means a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis. This definition of a child is applicable regardless of age or dependency status; (2) A biological, adoptive, or foster parent, stepparent, or legal guardian of an employee or the employee’s spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child; (3) A spouse; (4) A registered domestic partner; (5) A grandparent; (6) A grandchild; and (7) A sibling. (Labor Code §§ 245.5(c); 248.2(b)(1)(F).)
[12] Labor Code §§ 248.2(b)(1)(F), 248.3(b)(1)(F).
[13] “Child” is also defined by Labor Code § 245.5 (c). (See fn. 15, supra.)
[14] Labor Code §§ 248.2(b)(1)(G), 248.3(b)(1)(G).
[15] Labor Code §§ 248.2(b)(1)(C), 248.3(b)(1)(C).
[16] Labor Code §§ 248.2(b)(1)(D), 248.3(b)(1)(D).
[17] Labor Code § 248.2(b)(5).
[18] Labor Code §§ 248.2(b)(2)(A)(i). An employee is also entitled to 80 hours if the employee worked, or was scheduled to work at least 40 hours per week in the two weeks preceding the date that the covered employee took COVID-19 supplemental paid sick leave. (Labor Code §§ 248.2(b)(2)(A), 248.3(b)(2)(A).)
[19] However, if the part-time employee does not have a normal work schedule, the COVID-19 Supplemental Paid Sick Leave entitlement will be based on the number of hours that is 14 times their average daily schedule as determined by hours worked over the preceding six-month period. (Labor Code §§ 248.2(b)(2)(C), 248.3(b)(2)(B)(ii).)
[20] Labor Code § 248.2(b)(2)(D) [referring to paid sick leave provided under Labor Code section 246.]
[21] Labor Code § 248.2(b)(3)(C).
[22] Under Labor Code section 248.3, there is no statutory cap on the COVID-19 Supplemental Paid Sick Leave compensation. Instead, employers are required to compensate employees at the regular rate of pay that they would have been entitled to under applicable wage and hour laws or an applicable collective bargaining agreement if the employee had been scheduled to work those hours. (See Labor Code § 248.3(b)(3).)
[23] Labor Code § 248.2(e).
[24] Labor Code § 248.2(e)(2)(A).
[25] Labor Code § 248.2(e)(2)(C).
[26] Labor Code § 248.2(d)(4) [referring to notice requirements under Labor Code section 247.]
[27] The Secretary of Health and Human Services never specified the sixth (6th) qualifying reason provided for under the FFCRA (i.e., the employee “is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury”). As a result, it is omitted here.
[28] Employers should note that while Labor Code sections 248.2 and 248.3 do not require that employers provide COVID-19 Supplemental Paid Sick Leave, Cal/OSHA Emergency Temporary Standards (“COVID-19 Regulations”) require that employers compensate employees who are excluded from work as a result of a “close contact” exposure and offer such employees free COVID-19 testing. Therefore, while the eighth (8th) qualifying reason provided above is not expressly required under Labor Code sections 248.2 or 248.3, employers are already obligated to provide paid leave to employees who had a “close contact” exposure and offer such employees testing. As a result, most employers are already providing such paid leave to many employees who would qualify for expanded EPSL for that reason.
[29] SB 95 provides that a quarantine or isolation period is defined by an order or guidelines of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace. (Labor Code §§ 248.2(b)(1)(A), 248.3(b)(1)(A).)
[30] SB 95 further provides: “If the covered employee is subject to more than one of the foregoing, the covered employee shall be permitted to use COVID-19 supplemental paid sick leave for the minimum quarantine or isolation period under the order or guidelines that provides for the longest such minimum period.” (Labor Code §§ 248.2(b)(1)(A), 248.3(b)(1)(A).)
[31] Employers should note that the American Rescue Plan Act provides covered employees 80 hours of EPSL to be used between April 1, 2021 and September 30, 2021. (See American Rescue Plan Act, Sec. 9641 “Payroll Credits” [“This section shall apply only to wages paid with respect to the period beginning on April 1, 2021, and ending on September 30, 2021.”].)
[32] Labor Code §§ 248.2(e), 248.3(d).
