California COVID-19 Supplemental Paid Sick Leave Starts September 19, 2020

By Swerdlow Florence Sanchez Swerdlow & Wimmer

September 17, 2020

In a significant piece of legislation, California Governor Gavin Newsom signed Assembly Bill 1867 into law on September 9, 2020, which requires private employers with 500 or more employees nationwide to provide their California employees with paid sick leave for specific COVID-19-related reasons. AB 1867 goes into effect on September 19, 2020, and creates the new California Labor Code Section 248.1. The Act is meant to fill in the gap left by the federal Families First Coronavirus Response Act (“FFCRA”), which only requires COVID-19 paid sick leave for employers with fewer than 500 employees.

The Act also closes a loophole in the FFCRA by requiring employers of any size employing health care providers and emergency responders to provide such employees with COVID-19 supplemental paid sick leave. Additionally, the Act creates Labor Code Section 248, which requires COVID-19 supplemental paid sick leave for food sector workers of private employers with 500 or more employees. This codifies Executive Order N-51-20, which Governor Newsom signed on April 16, 2020.

This alert will focus on steps covered employers should take to immediately comply with these new requirements.

Covered Employers

AB 1867 applies to private employers with 500 or more employees in the United States, even if only a handful of the employees are California employees. For counting purposes, “employees” is defined to include: (1) employees currently working; (2) employees on leave of any kind; (3) employees of temporary placement agencies who are jointly employed under the Fair Labor Standards Act; and (4) day laborers supplied by a temporary placement agency.

The Act also applies to all employers that employ health care providers and emergency responders that had elected to exclude such employees from emergency paid sick leave under the FFCRA. This includes public entities and applies to employers regardless of the number of employees.

Qualifying Reasons For COVID-19 Supplemental Paid Sick Leave

Employees in California who work for a covered employer and who must leave their home or other place or residence to perform work are entitled to COVID-19 supplemental paid sick leave if 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; or
3.    The employee is prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19.

Employees who work from their homes or residences are not entitled to COVID-19 supplemental paid sick leave.

Amount And Compensation Of COVID-19 Supplemental Paid Sick Leave

“Full-time” employees are entitled to 80 hours of COVID-19 supplemental paid sick leave, as are 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 COVID-19 supplemental paid sick leave.

For all other employees, the amount of COVID-19 supplemental paid sick leave an employee is entitled to take is determined as follows:
•    If the employee has a normal weekly schedule, the total number of hours the employee is normally scheduled to work for the employer over two weeks;
•    If the employee works a variable number of hours, 14 times the average number of hours the employee worked each day for the employer in the six months preceding the date the employee took COVID-19 supplemental paid sick leave. If, however, the employee worked fewer than six months but more than 14 days, the calculation shall be made over the entire period the employee has worked for the employer; or
•    If the employee works a variable number of hours and has worked for the employer over a period of 14 days or fewer, the total number of hours the employee has worked.

Employees must be paid COVID-19 supplemental paid sick leave at a rate equal to the highest of the following: (1) the employee’s regular rate of pay (including pursuant to any applicable collective bargaining agreement); (2) California’s minimum wage; or (3) any applicable local minimum wage. Like the FFCRA, however, an employee’s pay for COVID-19 supplemental paid sick leave is capped at $511 per day and $5,110 in the aggregate. But, unlike the FFCRA, there is no payroll tax credit to fund these payments. Thus, employers of healthcare providers and emergency responders that have fewer than 500 employees may want to reconsider whether to avail themselves of the exemption from the FFCRA for such employees that work outside of the home, as the FFCRA provides a tax credit where AB 1867 does not.

The Act requires employers to make this COVID-19 supplemental paid sick leave available for immediate use by employees upon either oral or written request. Employees have the discretion to determine how many hours of COVID-19 supplemental paid sick leave to use, up to the total maximum they are entitled to take.

This COVID-19 supplemental paid sick leave is in addition to the three days (or 24 hours) of paid sick leave already required by California Labor Code Section 246. Additionally, employers cannot require employees to use any other paid or unpaid leave before using this COVID-19 supplemental paid sick leave.

The requirement to provide COVID-19 supplemental paid sick leave expires on December 31, 2020, or upon the expiration of any federal extension to the Emergency Paid Sick Leave Act of the FFCRA, whichever is later.

Employer Notice Requirements

By the first full pay period following September 9, 2020, covered employers (outside of the food sector) must include on an employee’s wage statement (or in a separate writing) the amount of COVID-19 supplemental paid sick leave available to that employee. This is in addition to the existing requirement that employers must include paid sick leave on the wage statement or in a separate writing. Employers immediately should contact their payroll processors to ensure that this separate line item is added on employee wage statements.

Additionally, covered employers must post a notice regarding COVID-19 supplemental paid sick leave in their workplaces. The notice for covered employers of food sector workers can be found here. The notice for covered employers of non-food sector sectors can be found here. If, however, employees do not frequent the workplace, the employer may disseminate the notice by e-mail. Covered employers should ensure that this notice gets posted and/or disseminated to employees.

Employers That Previously Provided COVID-19 Paid Sick Leave

The Act provides setoffs for employers who have already provided, or partially provided, COVID-19 paid sick leave that comports with AB 1867. For example, employers that already provided employees with supplemental paid leave for the reasons set forth in the Act, and the pay was equal to or greater than required by the Act, may count such hours already paid toward the total number of hours required by AB 1867 for COVID-19 supplemental paid sick leave.

Non-food-sector employers that already provided employees with supplemental paid leave for the reasons set forth in the Act, but the pay was not equal to or greater than required by the Act, may retroactively to March 4, 2020, provide supplemental pay to the employee to satisfy the compensation requirements of the Act and count those hours toward the total number of COVID-19 supplemental paid sick leave hours required by the Act.

Enforcement by Labor Commissioner

The Act also amends Labor Code Section 248.5 to authorize the California Labor Commissioner to investigate violations and seek relief for any violations of the Act. If the Labor Commissioner finds that COVID-19 supplemental paid sick leave was unlawfully withheld from an employee, the Commissioner may levy an administrative penalty against the employer in an amount of either $250 or the paid sick leave withheld multiplied by three, whichever is greater. This administrative penalty shall not exceed $4,000 in the aggregate. In addition, the Labor Commissioner or the California Attorney General may bring a civil action to pursue reinstatement, backpay, the payment of sick days unlawfully withheld, liquidated damages, and other legal or equitable relief.

Next Steps

Employers subject to AB 1867 should review and immediately update their paid sick leave policies to account for this COVID-19 supplemental paid sick leave. These employers also should immediately ensure that they comply with the notice requirements established by the Act.

Contact your SFSSW attorney if you have questions regarding COVID-19 supplemental paid sick leave or if you need assistance in implementing the requirements of AB 1867.