As the federal government passed extended tax credits for Emergency Paid Sick Leave (“EPSL”) and Expanded Family Medical Leave (“EFMLA”) in March 2021 under the American Rescue Plan Act (“ARP”), California was busy crafting its own paid sick leave expansion. Shortly after passage of ARP, Governor Newsom signed Senate Bill 95 into law, which codifies additional paid sick leave for most California workers in line with the requirements of the FFCRA and, thus, allows employers to take advantage of federal tax credits for providing EPSL under the same conditions as would have been mandated under the FFCRA were it still in effect. While the ARP extension is voluntary, employers with more than 25 employees will have to comply with California’s new sick leave entitlement. Employers providing in-home supportive services should contact us directly to discuss how their industry is treated differently in terms of providing COVID-19 paid sick leave in California.
Employees Entitled to Up to 80 Hours of EPSL
Under SB 95, employees in California, regardless of length of service, are entitled to up to 80 hours of sick leave for COVID-19 related reasons. The length of available leave is similar to past programs and part-time employees will be afforded the number of hours they usually work in a two-week period. Contact us if you need assistance calculating the number of hours owed to an employee as there are several formulas at play depending on the particular employee’s circumstances.
California Expands Reasons for Taking EPSL, Adds Vaccine-related Absences
California revised the reasons an employee is eligible to take leave, adding in vaccine-related absences. An employee may now take California COVID-19 paid sick leave for the following reasons:
- The employee is under a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of CDPH, local public health department, or the CDC.
- The employee has been advised by a healthcare provider to quarantine because of COVID-19.
- The employee is going to an appointment to receive the vaccine.
- The employee is experiencing symptoms related to receipt of the vaccine that prevent the employee from being able to work or telework.
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
- The employee is caring for a family member who is subject to a government quarantine or isolation order or guidelines, or has been told to quarantine by a healthcare provider.
- 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 above largely tracks the eligible reasons for taking EPSL under the FFCRA, except that Item 1 now includes “guidelines,” whereas the FFCRA only refers to “orders.” In nearly all situations, an employee eligible for California’s COVID-19 sick leave should also satisfy the ARP’s criteria for EPSL (tied to the old FFCRA requirements) and entitle the employer to tax credits. Notably, tax credits are not available to employers with more than 500 employees as the FFCRA did not apply to them.
New Requirements for Employers
There are some key requirements for employers under the new California law:
- Employers must include the number of hours of COVID-19 paid sick leave on employee’s wage statements, and do so in a separate line item from the hours of normal sick leave available. Failure to do so may result in applicable Labor Code penalties for failure to accurately account for available sick leave on a paycheck stub.
- Employers must post a notice to employees informing them of the new COVID-19 paid sick leave. The Labor Commissioner will be providing a model poster.
- California COVID-19 sick leave is paid at an employee’s “regular rate.” Unlike federal EPSL, California’s new law pays out leave at a maximum of $511 per day regardless of the reason the employee is taking leave. This may impact the amount of the federal tax credit available to employers for providing COVID-19 paid sick leave as employee eligibility reasons 4-6 under the FFCRA (different from numbers 4-6 above) are capped at a maximum daily payment of $200. So while employers will have to pay up to $511 per day to employees, depending on the reason the employee took leave, the employer may only be able to claim $200 in tax credits. As a reminder, “regular rate” is a legally defined term and includes most forms of remuneration. Contact us if you have questions about how to calculate an employee’s regular rate of pay.
- The new paid sick leave entitlement is retroactive. Upon an employee’s written or oral request, the employer must pay the employee the difference between the amount, if any, paid to an employee from January 1, 2021, to the present before the new law becomes effective and what the employee would have been paid if the new law were in effect at the time. Employers eligible for the FFCRA tax credit should make certain to document the prior use of the leave in order to claim the tax credits. Speak with your accountant about how and when to claim the tax credit.
- The employer may reduce an employee’s COVID-19 sick leave allotment by paid sick leave taken by the employee in 2021 before the law becomes effective if that paid sick leave complied with the law’s requirements, or if the employer brings the prior sick leave into compliance by paying any extra amount that would have been owed to the employee had the law been in effect.
Employers Required to Provide New EPSL Starting March 29, 2021
The law took effect immediately and expires on September 30, 2021, which is the same date that federal tax credits end under ARP for paid sick leave provided in accordance with the expired FFCRA provisions. However, while the law took effect immediately for general purposes, employers are not required to start providing paid sick leave benefits under the new statute until March 29, 2021.
Raines Feldman clients who are Employee Handbook program participants should reach out to our Handbook Coordinator Sheila Blake at email@example.com to receive an updated COVID-19 Supplemental Paid Sick Leave policy. For all other client questions or concerns, please contact a member of the Employment Law Group or contact Lauren Katunich at firstname.lastname@example.org.