New California Requirements for COVID Paid Sick Leave

California employers with more than 25 employees now need to give all employees a new bank of 2 weeks of California COVID paid sick leave (“CA COVID PSL”), even if employees previously used paid COVID leave in 2020. This is a complicated law that puts a lot of requirements on employers. We’ve broken it down below for you.

Although the law only applies if you have 25 or more employees, even smaller employers should take a few minutes to read this blog as there are pieces related to COVID and paid leave that do apply to everyone

Some key points to know:

• Each employee is eligible for a new bank of 2 weeks of paid COVID leave.
• This new bank of time is in addition to any other paid time off benefits that you offer.
• You are able to apply for the FFCRA tax credit for these paid absences.
• The law is retroactive to January 1st, so you may need to retroactively pay employees who previously took unpaid time off for COVID-related reasons.
• Employees can use paid leave for the time they need to obtain and recover from the COVID vaccine.

Effective March 29, 2021

Technically this benefit is available from March 29 through September 30, 2021. But, California being California, it’s a little more complicated than that.

While the law goes into effect March 29th, it’s actually retroactive to January 1, 2021. So this new CA COVID PSL can cover absences that already occurred. More on that below.

At this time the benefit ends on September 30th. However, if an employee is out of the office using CA COVID PSL on the 30th, they continue to receive CA COVID PSL until the end of their leave even if it’s beyond September 30.

Retroactive to January 1, 2021

As mentioned, employees get a new bank of CA COVID PSL effective 1/1/21.  So, all employees should have two weeks of CA COVID PSL in their banks effective retroactively to 1/1/21.  This is true even if they exhausted the two weeks of COVID leave that was available in 2020.

If you have been providing employees with paid COVID leave in 2021, either under FFCRA or local laws, you can deduct any time that has already been used in 2021 from the employee’s CA COVID PSL bank, as long as the time was used for a qualifying reason under the CA COVID PSL law (see below).

For example, if you provided 80 hours of FFCRA pay to a full-time employee subject to an isolation order in 2021, that employee has exhausted their time and would not be eligible for additional time CA COVID PSL this year.

If you have not been offering FFCRA pay in 2021 and an employee took unpaid time off in 2021 for a qualifying reason under CA COVID PSL (see below), the employee now has a right to receive retroactive CA COVID PSL pay. These retroactive payments would then be deducted from their remaining available CA COVID PSL amounts for 2021.

The good news is that you don’t have to immediately go into your records to find any instances where retroactive CA COVID PSL would apply. You only have to provide retroactive pay if the employee requests it. You are required to post this notice in your workplace informing employees of these rights, so do not be surprised if employees do come to you with questions about receiving retroactive pay.

Who the law applies to

This applies to all employers in California that have more than 25 employees. There are no exceptions to this law, beyond excluding smaller employers. If you are a smaller employer, remember that tax credits for paid COVID leave under FFCRA are still available. There are also several cities and counties in California that have enacted their own laws requiring employers to provide paid leave for COVID-related reasons.

Small employers also may need to provide ‘exclusion pay’ under the Cal/OSHA Emergency Temporary Standard if the employee has had potential exposure to COVID-19 in the workplace and, as a result, is excluded by their employers from the workplace.

Eligibility

Employees are eligible for CA COVID PSL if they are unable to work or telework because they have been:

1. Subject to a quarantine or isolation period related to COVID-19 by an order or guidelines of the State Department of Public Health, the CDC, or a local health officer who has jurisdiction over the workplace. (If two orders/guidelines apply, provide the employee with the most generous benefit).
2. Advised by a health care provider to self-quarantine due to concerns related to COVID-19.
3. Attending an appointment to receive a COVID-19 vaccine.
4. Experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
5. Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
6. Caring for a family member who is subject to an order or guidelines or who has been advised to self-quarantine.
7. Caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

These criteria are similar to the 2020 version of CA COVID PSL except that they have been expanded to address COVID-19 vaccine appointments and symptoms.

Importantly, employers cannot require any documentation from the employee before providing this leave.  Fortunately, these eligibility criteria line up very closely with FFCRA, so you should be able to get a full tax credit for nearly all CA COVID PSL provided.

Please note, employees who have had potential exposure to COVID-19 in the workplace and, as a result, are excluded by their employers from the workplace may be eligible for ‘exclusion pay’ under the Cal/OSHA Emergency Temporary Standard.  The Cal/OSHA requirements apply to all employees. In most cases, employers can get a tax credit for this time through FFCRA.

2 Weeks of Paid Leave

Full-time employees are eligible for 80 hours of CA COVID PSL. This is the case regardless of their actual work schedule. If your business classifies the employee as “full-time,” even if full-time for you is less than 40 hours, they can take 80 paid hours of CA COVID PSL.

For any employee who is NOT full-time, the number of hours gets a little more complicated.

First, there is a 2-week look-back period. If the employee’s work schedule the 2 weeks prior to them needing CA COVID PSL was 40 or more hours per week, then they are able to take 80 hours of CA COVID PSL.

If that is not the case, then their 2 weeks of CA COVID PSL is equal to the number of hours the employee is normally scheduled to work in a 2-week period (with a max of 80 hours).

If the employee does not work a consistent schedule, then you calculate the amount of CA COVID PSL as 14 times the average number of hours the employee worked each day in the past six months (with a max of 80 hours). For example, if an employee works variable hours which average out to 5 hours per day, they would be eligible for 70 CA COVID PSL hours (5 hours x 14 = 70). Even if the calculator goes above 80, remember that 80 CA COVID PSL hours is the max you are required to provide.

If you have a new hire who hasn’t even been there for at least 14 days yet and they need CA COVID PSL, their leave amount is equal to the total number of hours the employee has worked for you.

FFCRA and other Paid Time Off

If the employee would also qualify for FFCRA paid leave, you can run FFCRA concurrently with CA COVID PSL. This allows you to get a tax credit for the paid time off being required by your state.

You cannot, however, have CA COVID PSL run concurrently with or deduct it from your regular paid time off benefits (sick leave, vacation, PTO). CA COVID PSL is in addition to any paid time off benefits the employee receives from you, and you cannot require an employee to use any other accrued paid time off benefits before their CA COVID PSL.

Rate of Pay

The pay rate depends on whether the employee is exempt or non-exempt.

For non-exempt employees, you should pay the rate that is the highest of the following:

1. The regular rate of pay for the workweek in which the employee uses CA COVID PSL, whether or not the employee actually works overtime in that workweek.
2. The rate you get by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment. *This method would most likely come into play for an employee whose compensation includes variable commissions and/or bonuses on a regular basis.
3. State minimum wage.
4. Local minimum wage.

Exempt employees should be paid at the same rate they are normally paid for other forms of paid leave time.

The maximum amount of pay an employee can receive is the same as that under FFCRA.  This is currently $511 per day and $5,110 in the aggregate.  Employees who reach this maximum can use their other paid time of benefits to receive their full wages during the leave period.

Notice

Employers should post this notice in a conspicuous place in their office and distribute it electronically to all of their remote employees.