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California Likely to Soon Implement COVID-19 Supplemental Paid Sick Leave, Retroactive to January 1, 2022

By Brian Fong & David Chidlaw on January 31, 2022
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On January 25, 2022, Governor Gavin Newson announced a “framework” for an agreement to reactivate California’s COVID-19 Supplemental Paid Sick Leave (“COVID PSL”) law for the period from January 1, 2022 to September 30, 2022.  California employers should assume this agreement will become law in some form and prepare accordingly to re-institute supplemental paid sick leave for their California employees in the near term.

California’s COVID-19 Crisis and Response

In the early days of the COVID-19 pandemic, California enacted a variety of measures, from mask mandates to quarantine requirements, as well as supplemental paid sick leave programs.  Starting on April 16, 2020, California law required employers to provide up to 80 hours of COVID PSL for food sector workers who could not work or telework due to their own or their family members’ COVID-19 illness.  California extended COVID PSL to non-food sector workers of employers with 500 or more employees starting on September 19, 2020.  Both COVID PSL laws expired on December 31, 2020.  Yet still, COVID-19 rapidly spread throughout the state.  Amid the state’s unrelenting case count, California enacted a law in March 2021 providing up to 80 additional hours of COVID PSL to employees, retroactive to January 1, 2021.  Employers who opted to offer extended paid leave under the federal American Rescue Plan Act could receive offsetting tax credits for providing 2021 COVID PSL to their employees.  However, the 2021 COVID PSL law expired on September 30, 2021.

Thereafter, California enjoyed a brief reprieve in case counts.  Yet with the recent proliferation of the highly-transmissible Omicron variant, the virus has begun spreading at a breakneck pace.  In the last month alone, the number of Californians not working due to their or their family members’ COVID-19 illness has increased by as much as 320 percent.  In response, labor unions urged the California Legislature to reinstate the supplemental paid sick leave law for employees, arguing that workers must be able to stay home when sick “without the fear of losing two weeks of pay[.]”  Employer organizations, including the Cal Chamber, urged that a new sick leave law must have “reasonable parameters” that do not overly burden already-struggling businesses.

California’s New Supplemental Paid Sick Leave Proposal

On January 25, Governor Newsom, along with Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon, announced that they “reached an agreement on a framework” to ensure California employees have continued access to supplemental COVID-19 paid sick leave through September 30, 2022.  Employers should be aware of the following key features of the new COVID PSL agreement:

  1. The law will apply to employers with 26 or more employees. This is similar to the 2021 COVID PSL law.
  2. Full-time employees will be entitled to 40 hours of paid leave due to COVID-19, and an additional 40 hours of paid leave upon showing proof that they (or their family member) has tested positive for the COVID-19 virus. Under the 2021 COVID PSL, full time-employees were entitled to up to 80 hours of supplemental paid sick leave.  The framework agreement provides that employers will have to pay for the test(s), but it is unclear whether this covers tests for the employee only, or includes testing for their family members.
  3. The leave will be retroactive to any time off beginning January 1, 2022. This retroactivity is similar to the 2021 COVID PSL law.
  4. The leave program will expire on September 30, 2022.  This is similar to the 2021 COVID PSL law.

While details are still being worked out, the Department of Finance has stated that the law will likely mirror the 2021 leave program.  Accordingly, employees will likely receive a maximum of $511 per day, or $5,110 total.

The framework deal reached does not currently include any offsetting tax credits for employers to provide COVID PSL.

Key Takeaways

California employers should be aware that the state will likely reinstate COVID-19 paid sick leave similar in many ways to the 2021 COVID PSL law.  However, employers should be aware that legislation to implement the framework deal is not yet in place, and should keep current on the law that is (likely to be) implemented.  Employers should consider adding addenda to their current policy documents, and should notify human resources professionals to stay abreast of this ongoing development.

The legal landscape continues to evolve quickly and there is a lack of clear-cut authority or bright line rules on implementation.  This article is not intended to be an unequivocal, one-size fits all guidance, but instead represents our interpretation of where applicable law currently and generally stands.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, including, without limitation, potential liability should an employee become ill, requirements regarding family leave, sick pay, and other issues.

Photo of Brian Fong Brian Fong

Brian S. Fong is a partner in the Labor and Employment Practice Group in the firm’s San Francisco office.

Read more about Brian FongEmail
Photo of David Chidlaw David Chidlaw

David B. Chidlaw is a partner in the firm’s San Diego office where he specializes in labor and employment matters on behalf of management, employers and high net worth individuals.

Read more about David ChidlawEmail
  • Posted in:
    Employment & Labor
  • Blog:
    Labor & Employment Law Blog
  • Organization:
    Sheppard, Mullin, Richter & Hampton LLP
  • Article: View Original Source

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