Delfino Madden | Paid sick leave

Federal and State Governments Extend and Expand COVID-19 Supplemental Paid Leave for California Employees

Published March 22, 2021

In March 2020, both California and the federal government passed legislation impacting employers and employees related to COVID-19 supplemental paid leave.  While the federal legislation is voluntary for eligible employers, California’s new legislation mandates employers with more than 25 employees provide additional supplemental paid leave for qualifying COVID-19 reasons between January 1, 2021 and September 30, 2021.  Significantly, both laws provide new leave banks and expand the categories of qualifying leave, including leave necessitated for immunization or by conditions related to immunization as the nation ramps up vaccination efforts.  The California legislation also increases the number of employers and employees covered by the mandatory paid leave provisions and includes additional requirements, such as new calculations to determine an employee’s wage rate and the requirement to document available leave on, or contemporaneously with, wage statements.

Federal Government Further Expands Voluntary Provision of, and Payroll Tax Credits for, FFCRA Leave with Additional Requirements

On March 11, 2021, the federal government passed the American Rescue Plan Act of 2021 (ARPA).  Among other changes impacting employers, the ARPA extends the period of time during which employers may receive payroll tax credits if they voluntarily choose to continue providing leave consistent with the federal Families First Coronavirus Response Act (FFCRA) and expands qualifying reasons for such leave.

The FFCRA expired on December 31, 2020, at which time employers were no longer required to provide leave under that Act.  At the end of 2020, the federal government passed the Coronavirus Response and Relief Supplemental Appropriations Act, which failed to revive the expired mandatory FFCRA leave but did extend the time through which employers could obtain payroll tax credits for FFCRA leave if they voluntarily elected to provide it until March 31, 2021.  The ARPA similarly does not require employers to provide FFCRA leave after December 31, 2020, but does further extend the period of time during which employers may voluntarily provide such leave and receive payroll tax credits until September 30, 2021.

Significantly, in addition to extending the time period through which payroll tax credits may be obtained, the ARPA also does the following:

  • Expands the qualifying reasons for which employees may take leave to include employees who are seeking or awaiting the results of a COVID-19 test or diagnosis either because they have been exposed to COVID-19 or their employer has requested the test or diagnosis, as well as employees who are obtaining a COVID-19 immunization or recovering from an injury, disability, illness, or condition related to receipt of a COVID-19 immunization.  In addition, all qualifying reasons are now covered by the Emergency Family and Medical Leave Act, including those previously only available under the Emergency Paid Sick Leave Act and the new ARPA provisions for leave related to testing and immunization.
  • Resets Emergency Paid Sick Leave Act leave banks to begin April 1, 2021, meaning leave taken under the Act in 2020 or consistent with it during the first three months of 2021 is not counted against an eligible employee’s total leave entitlement.
  • Expands the aggregate cap for leave under the Emergency Family and Medical Leave Act to $12,000 (previously $10,000) consistent with the inclusion of more qualifying reasons for leave under that Act.  In addition, the first two weeks of up to 12 weeks available under the Emergency Family and Medical Leave Act do not have to be unpaid.
  • Prohibits employers from discriminating in the provision of leave in favor of highly compensated employees, full-time employees, or employees on the basis of employment tenure with the employer.

The U.S. Department of Labor (DOL) is expected to provide further guidance prior to the effective date of April 1, 2021.

California Retroactively Re-Ups Supplemental Paid Sick Leave Requirements for COVID-19 and Expands Those Provisions to Employers with 25+ Employees, in Addition to Creating Additional Obligations

On March 18, 2021, the California Legislature passed Senate Bill 95, which Governor Newsom signed the following day.  The new laws resulting from that legislation, which are codified in Labor Code sections 248.2 and 248.3, go into effect on March 29, 2021, and apply retroactively to January 1, 2021.  They will remain in effect until September 30, 2021, though any employee who is on qualifying leave as of that date must be permitted to continue receiving paid time off after that date until the employee returns to work or runs out of available supplemental pay, whichever occurs first.

Labor Code section 248.2 applies to all employers with more than 25 employees. Section 248.2 requires covered employers to provide up to 80 hours of COVID-19 supplemental paid leave to employees who are unable to work or telework for a qualifying reason, except certain providers of in-home supportive services or waiver personal care services (this latter category of employees is covered by newly-added Labor Code section 248.3 with similar requirements).   It also has special provisions for firefighters.  The new leave is a new bank of up to 80 hours in addition to leave provided under California’s 2020 COVID-19 supplemental paid sick leave laws, which were codified at Labor Code sections 248 and 248.1.

Following are significant elements of Labor Code section 248.2:

  • It applies to more employers than were covered by California’s 2020 COVID-19 supplemental paid leave laws.  In 2020, in part because small employers were covered by the FFCRA, California’s COVID-19 supplemental paid leave law only applied to large employers with more than 500 employees.  Conversely, 2021’s COVID-19 supplemental paid leave law applies to employers with as few as 26 employees.  It also applies equally without distinguishing between food sector and non-food sector employees.  Significantly, because ARPA’s voluntary extension of FFCRA leave benefits also applies to employers with fewer than 500 employees, this means that some employers who must provide supplemental paid sick leave under California law may be able to obtain a federal payroll tax credit if they also voluntarily extend FFCRA leave entitlements to employees where the qualifying reason is covered by both California and federal laws and the employer has between 26 and 499 employees.
  • It potentially applies to more employees than were covered by California’s 2020 COVID-19 supplemental paid leave laws.  The 2020 laws only applied to employees who left their homes or other places of residence to perform work and were unable to do so for qualifying reasons.  The new law applies to employees who are unable to work or telework because of a qualifying reason.  With this distinction, this law could apply to some remote workers who may not have been covered by the prior laws because they did not leave their homes or other places of residence to work.
  • It includes different qualifying reasons than were covered by California’s 2020 COVID-19 supplemental paid leave laws.  The new qualifying reasons include the following: (1) the employee is 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, the federal Centers for Disease Control (“CDC”), or a local health officer who has jurisdiction over the workplace; (2) the employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19; (3) the employee is attending an appointment to receive a vaccine for protection against contracting COVID-19; (4) the employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework; (5) the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis; (6) the employee is caring for a family member who is subject to an order or guidelines related to COVID-19 or who has been advised to self-quarantine related to COVID-19; and/or (7) 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.  In addition to the new categories of qualifying leave, the new law expands the scope of category (1) by including the inability to work related to “guidelines” of the CDC or state/local health departments, while the prior law only applied where an employee was subject to federal, state, or local COVID-19 “orders.”  Notably, the new law also eliminates the requirement to provide leave where an employee is prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19.  However, that leave is arguably covered by one of the other categories or, alternatively, may be covered by the exclusion pay requirements of Cal/OSHA’s Emergency Temporary Standards related to COVID-19.
  • It sets forth a new basis for determining the rate of pay that must be used for nonexempt employees.  Now, qualifying leave must be paid at the highest of the state or local minimum wage, the regular rate of pay for the workweek in which the employee takes leave (the old law was based on the regular rate of pay for the last pay period), or the employee’s total wages (not including overtime premium pay) divided by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.  Pay for exempt employees is calculated in the same manner as the employer calculates wages for other forms of paid leave.

Significantly, all employers covered by Labor Code section 248.2 must also include the amount of COVID-19 supplemental paid sick leave available for use each pay period either on an employee’s wage statement or in a separate writing provided on the designated pay date with the employee’s payment of wages.  This amount must be set forth separately from paid sick days.  The legislation sets forth how to address this requirement for employees with variable schedules.  Employers should consult with their payroll processors to ensure their wage statements are modified to be in compliance with this requirement or to set up a system to provide a separate writing with employees’ payment of wages.

Labor Code section 248.2 uses similar calculations as California’s 2020 COVID-19 leave laws to determine the amount of paid leave available to employees up to 80 hours between January 1, 2021 and September 30, 2021.  Employers are not required to pay more than $511 per day and $5,110 in the aggregate unless federal legislation increases these amounts.

Employers cannot offset paid sick leave under Labor Code section 246 or hours provided pursuant to California’s 2020 COVID-19 supplemental paid sick leave laws, including any time that started in 2020 but carried into the beginning of 2021, nor may they require employees to use any other paid or unpaid leave, paid time off, or vacation time before using COVID-19 supplemental paid sick leave or in lieu of such leave.  However, employers may offset paid time off provided pursuant to federal laws (e.g., FFCRA) or local laws in effect or that became effective on or after January 1, 2021 if the paid leave is provided for the same reasons set forth under Labor Code section 248.2.  In addition, if an employer paid a covered employee another supplemental benefit for leave taken on or after January 1, 2021, that was payable for the reasons covered by Labor Code section 248.2 and that compensated the employee in an amount equal to or greater than the amount of compensation under the legislation, the employer may apply the hours of the other paid benefit toward the total amount required.  In addition, employers may require employees to first exhaust their COVID-19 supplemental paid leave before they are required to pay Cal/OSHA Emergency Temporary Standards exclusion pay.

Because Labor Code section 248.2 is retroactive, if an employer did not compensate an eligible employee in an amount equal to or greater than the amount of compensation provided for in the legislation between January 1, 2021 and March 29, 2021, the employer must make a retroactive payment upon the oral or written request of the employee, and it must do so on or before the payday for the next full pay period after the employee’s request. The retroactive payment must be reflected on the wage statement for the corresponding pay period.

The Labor Commissioner has until March 26, 2021, to issue a model notice which employers must then post and make available to employees.

For more information about these laws, special provisions for firefighters, or the new California leave law applying to employers of certain providers of in-home supportive services or waiver personal care services, please consult with counsel.

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