Sept. 15, 2020 Governor Newsom Signs Bill Expanding COVID-19 Supplemental Paid Sick Leave

Last week, Governor Newsom signed Assembly Bill 1867 (“AB 1867”), a law intended to fill in perceived “gaps” left by the federal Families First Coronavirus Response Act (“FFCRA”) paid sick leave law. (The FFCRA applies only to employers with fewer than 500 employees and exempts certain essential workers. Our detailed summary of the FFCRA can be found here.)

AB 1867, among other things, codifies Governor Newsom’s April 16, 2020, Executive Order regarding COVID-19 Supplemental Paid Sick Leave for certain food sector workers (EO N-51-20) and extends the paid sick leave requirements to all employers with 500 or more employees (adding to the Labor Code sections 248 [food sector workers] and 248.1 [employers over 500 and certain essential workers]). 

AB 1867 also incorporates many provisions of California’s existing paid sick leave law, including that employers must provide the employee’s available balance on each paystub. Details on AB 1867’s emergency paid sick leave requirements are provided below (“Supplemental Paid Sick Leave”).

Newly covered employers should take prompt steps to comply with AB 1867, including to: (1) provide employees with notice of their rights under the law (the required notice for food sector workers is available here; the required notice for other employees is available here); (2) ensure compliant policies and practices; and (3) work with your payroll provider to ensure paystubs include the necessary information.

1. Which employers are covered by the new law?

AB 1867 applies to the California employees of private employers with 500 employees or more in the United States. The law also applies to any employer that is subject to the federal FFCRA and that excluded health care provider or emergency responder employees from FFCRA leave eligibility.

Unlike the FFCRA, AB 1867 does not provide for tax credits to the employer for providing leave. As a result, employers of health care provider or emergency responder employees who previously invoked the FFCRA exemption may want to classify time off as FFCRA leave moving forward so they can take advantage of the federal tax credit while providing the state-mandated leave. If this applies to your business, we recommend consulting with your tax professional for more details.

2. What must employers provide?

Covered employers must offer up to 80 hours of Supplemental Paid Sick Leave to all eligible “full time” employees or employees who “worked or [were] scheduled to work, on average, at least 40 hours per week . . . in the two weeks preceding the date” the employee took leave. Part-time employees are entitled to pro-rated leave, the calculation of which is dependent on whether they have a normal weekly schedule or work a variable number of hours.

3. Which employees qualify for the new paid sick leave benefits?

AB 1867 applies to individuals who leave their home or place of residence to perform work for the employer. This means that employees who work exclusively remotely are not entitled to Supplemental Paid Sick Leave under AB 1867.

4. Are there any exemptions to coverage?

Yes. Labor Code section 248.1 specifically excludes food sector employees because they are covered under the companion statute, Labor Code section 248.   

In addition, if an employer has already provided an eligible worker with “supplemental benefits” payable for a reason listed in AB 1867, the employer may be able to take credit for the leave already provided if the benefits were payable in an amount equal to or greater than the amount of Supplemental Paid Sick Leave Labor Code section 248.1 requires.

Though “standard” paid sick leave provided under California’s Healthy Workplace Healthy Family Act of 2014 does not qualify as a supplemental benefit, paid leave provided under EO N-51-20 or supplemental paid leave provided pursuant to federal or local ordinance for a reason covered by AB 1867 may qualify.  This means, for example, if you provided your employees with paid leave for COVID-reasons in July that was over-and-above your usual paid leave policies, you may not need to provide additional leave under AB 1867.

Under Labor Code section 248.1, if an employer already provided supplemental paid leave between March 4, 2020, and AB 1867’s effective date for a reason listed in AB 1867, but did not compensate the employee in an amount equal to or greater than the amount of Supplemental Paid Sick Leave Labor Code section 248.1 requires, the employer may retroactively provide supplemental pay to the covered worker to satisfy AB 1867’s compensation requirements and count those hours toward the number of hours it is required to provide.

5. How much paid sick time are employees entitled to receive?

Full-time employees are entitled to 80 hours of Supplemental Paid Sick Leave.

Part-time employees with a normal weekly schedule are entitled to Supplemental Paid Sick Leave equivalent to the total number of hours normally scheduled over two weeks.

Part-time employees with variable work hours are entitled to Supplemental Paid Sick Leave equal to 14 times the average number of hours the employee worked each day in the six months preceding the date the employee’s leave is taken. If the employee has worked for the employer for less than six months, the calculation is made over the entire period of employment. The Labor Commissioner’s FAQ provides greater detail on how this works.

The amount of Supplemental Paid Sick Leave per employee is capped at $511 per day, and $5,110 in total.

6. When can an employee use Supplemental Paid Sick Leave?

Employees will qualify for Supplemental Paid Sick Leave when they are unable to work for any of the following reasons:

  1. The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  2. The employee is advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19.
  3. The employee is prohibited from working by their employer due to health concerns related to potential transmission of COVID-19.

Critically, caring for or assisting another person (a child or other family member, for example) are not covered reasons under AB 1867, unlike the FFCRA and many related local ordinances.

Employers must make Supplemental Paid Sick Leave available for immediate use upon an employee’s oral or written request. Employers cannot require documentation for Supplemental Paid Sick Leave.

Additionally, employers cannot require employees “to use any other paid or unpaid leave, paid time off, or vacation time” prior to or instead of using Supplemental Paid Sick Leave. That is, if the employee has a qualifying reason, the employee may use Supplemental Paid Sick Leave even if he/she has other forms of paid time off available.

7. When does the law go into effect?

Labor Code section 248, which applies to food sector workers, went into effect immediately and will be applied retroactively to when the Governor’s Executive Order went into effect. Labor Code section 248.1, which applies to employees not in the food sector, becomes operative “not later than 10 days after the date of enactment.”  This means employers have until September 19, 2020, to begin providing the Supplemental Paid Sick Leave.

8. Are employers required to give notice to employees about the Supplemental Paid Sick Leave Benefit?

Yes. Labor Code sections 248 and 248.1 incorporate California’s existing paid sick leave law requiring employers to display a model notice.   The required notice for food sector workers is available here; the required notice for other employees is available here. If employees do not frequent a workplace, an employer can disseminate notice electronically such as via email. 

Unlike EO N-51-20, there is no requirement that the Labor Commissioner create a notice and for employers to distribute the notice to food sector employees. Thus, it is not clear whether employers must update the California Labor Commissioner’s existing mandatory notice and resend it to these employees.

9. Are employers required to include the amount of leave available on employees’ paystubs?

Yes. Labor Code section 248.1 includes a paystub requirement by incorporating by reference the Healthy Workplace Healthy Family Act of 2014’s paystub standard.  This means that employers must provide employees with information each pay period on the amount of Supplemental Paid Sick Leave that they have available for use.

In addition, Labor Code section 248.1 incorporates by reference the Healthy Workplace Healthy Family Act of 2014’s three-year recordkeeping requirement.

10. Are there penalties for non-compliance?

Yes. Employees whose rights under the law have been violated may be entitled to reinstatement, back pay, payment of leave unlawfully withheld, statutory penalties, injunctive relief, and attorney’s fees and costs, among other remedies.

For example, if paid sick days are unlawfully withheld, an administrative penalty equal to the dollar amount of leave withheld multiplied by three or $250 (whichever is greater), but not to exceed $4,000, may be applied.  There are also penalties for failure to post the required posting.  In addition, because AB 1867 is part of Labor Code, violations of the law could subject employers to dreaded Private Attorneys General Act (PAGA) claims.

11. Does AB 1867 impact San Diego’s new paid sick leave ordinance that passed City Council last week?

Yes. The day before Governor Newsom signed AB 1867, the San Diego City Council passed its own supplemental paid sick leave ordinance—O-2021-22.  However, because the Governor signed AB 1867, the San Diego City Council directed staff not to finalize the local ordinance. As a result, it did not become law. For Supplemental Paid Sick Leave, San Diego employers will follow the new state law.

For further information, questions, or assistance regarding paid sick leave benefits, please contact us. PPSC has a dedicated COVID-19 response team and is committed to assisting our valued clients through these challenging and fast-changing times.

AUTHORS
camille Gustafson   aaron schu