COVID Paid Sick Leave: Old vs. New

In this episode of The Workplace podcast, CalChamber employment law experts Matthew Roberts and Bianca Saad, and CalChamber policy advocate Ashley Hoffman discuss California’s new supplemental COVID-19 paid sick leave law, including insight on policy negotiations and what differentiates this new law from last year’s version.

Given the unpredictability of the COVID-19 pandemic, government guidance and mandates may be altered at any time. Information presented in this podcast is accurate as of February 9, 2022.

Advocacy on Behalf of Business

In January, Governor Gavin Newsom and top state legislators made a joint announcement that a new 2022 supplemental COVID-19 paid sick leave law was coming, Roberts explains. The new proposal, coming via AB 84 and SB 114, was passed by the state Legislature on Monday and Governor Newsom signed the package into law today.

As the Omicron COVID-19 variant made its way across the state at the end of last year and into the beginning of this year, a new paid sick leave law became the priority of the Governor and the Democratic supermajority in the state Legislature, Hoffman explains. The California Chamber of Commerce knew that there was no way of stopping what was coming, so the best action to take was to advocate on behalf of the business community.

One change the CalChamber worked for was a small business exemption, she says. Another was limiting the hours that could be taken under the policy. For example, under the previous COVID-19 supplemental paid sick leave law, many employees were abusing the policy, taking the full two weeks of allotted time just to get a vaccine. This new 2022 sick leave will limit that.

Also, some groups were pushing for the new law to be retroactive to October 2021, but the CalChamber was able to secure a retroactive date of January 1, 2022, Hoffman says.

Similarities, Differences

Employers will have to pivot quickly to comply with this new mandate, but fortunately, the new law is fairly similar to last year’s supplemental paid sick leave in many ways, Roberts says.

Similar to 2021’s iteration of the paid sick leave mandate, this new law will cover employers with 26 or more employees, Saad explains. The applicable date range is also similar to what employers saw last time, covering January 1, 2022 through September 30, 2022.

The maximum bank of hours is going to be up to a potential maximum of 80 hours for a full-time employee, and a prorated amount for part-time employees.

Another similarity, Saad says, is with how the supplemental paid sick leave is going to be paid. Nonexempt employees will be paid at the employee’s regular rate of pay for the work week in which the leave is taken. Exempt employees’ pay will be calculated in the same manner as other forms of paid leave time.

Notice and pay stub requirements also exist, as they did in 2021’s law. Employers should keep an eye out for when the new 2022 posters will become available as the Labor Commissioner has seven days from the new law’s effective date to publish and make the poster available. If an employer has employees who don’t frequent a workplace, a notice may be distributed electronically.

Regarding pay stub requirements, Saad explains there will need to be a separate line item on the itemized wage statement or pay stub. What is different this time around is that the employer will need to show how much leave an employee has actually used through that reflected pay period, as opposed to how much leave is actually available. So, if an employee hasn’t used any COVID-19 supplemental paid sick leave, then the employer will need to list zero hours used.

Similar to last year, an employee may qualify for up to 40 hours of time if they’re unable to work or telework for any of the following reasons:

  • If they are subject to a quarantine or isolation period related to COVID-19;
  • If they’ve been advised by a health care provider to isolate or quarantine due to COVID-19;
  • If they are experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • If they are caring for a family member who is subject to a government order, or guidance for isolation, or quarantine, or if that family member has been advised by a health care provider to isolate or quarantine; or
  • If 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.
  • An employee may also qualify for time off if they need to attend a COVID-19 vaccine appointment, or if the employee is experiencing symptoms related to a COVID-19 vaccine or a vaccine booster.

Saad explains that in addition to the employee taking the time for themselves for these vaccine-related purposes, under the 2022 law, they may also take the time to go to a vaccine appointment for a family member, or if their family member is experiencing symptoms related to a COVID-19 vaccine or vaccine booster.

Safeguards to Limit Abuse

A big frustration point employers had with the 2021 COVID-19 paid sick leave law is that employees were taking whole weeks off just to get the COVID-19 vaccine and “recover from the side effects,” and employers could not do anything about it nor ask for documentation, Roberts points out.

There was much discussion about this and about whether this leave policy should apply only to vaccinated people, Hoffman says. There was a desire to give people time to get vaccinated, but given the abuse employers previously saw, there was concern about not being able to ask for documentation.

What resulted from these discussions is that there are two different “buckets.” In one bucket, an employee has 40 hours that can be used for the qualifying reasons Saad mentions earlier, Hoffman says.

Employees may reach into a second bucket of hours if they test positive for COVID-19 or if they’re caring for a family member who is testing positive. At this point, the employer may also require documentation, either of the employee or of the family member showing a positive COVID-19 test result. If the employee refuses to show documentation, the employer may deny the sick leave.

Employees may use only 24 hours total per COVID-19 vaccine appointment, which covers time to get the vaccine and recover from side effects. If an employee needs more time, up to the full 40 hours may be given if the employee presents a doctor’s note stating the employee is still experiencing side effects.

Retroactive to January 1

The new COVID-19 paid sick leave law will take effect within 10 days of the Governor signing it, but the law will have a retroactive effective date of January 1, 2022, Saad explains.

This means that if an employee got vaccinated mid-January and took time off, they can ask their employer to use the supplemental sick leave for that purpose. Moreover, if the employee had used a different bucket of sick leave to cover this time, they can be credited for that time from the supplemental sick leave. The onus will be on the employee to initiate this process and request the time off.

Tax Credits

The million-dollar question, Roberts says, is “who is going to pay for this?” Last year, the federal government provided a dollar-for-dollar payroll tax credit to cover the supplemental paid sick leave, but that funding is now gone. Is anything available for employers this time around?

Unfortunately, not, Hoffman replies. There are no tax credits like we saw last time and there’s been no indication that the federal government intends to renew them. However, the state Legislature this week passed two bills restoring the research and development (R&D) and net operating loss tax credits and Governor Newsom is expected to sign these bills soon.

Even though these tax credits are not a dollar-for-dollar credit against sick leave specifically, they should help offset some of the cost, especially the net operating loss tax credits, she says.