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California Expands Coronavirus Paid Sick Leave with the Enactment of AB 1867

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California Expands Coronavirus Paid Sick Leave with the Enactment of AB 1867

The federal Families First Coronavirus Response Act (“FFCRA”) generally requires employers with fewer than 500 employees to provide up to 80 hours of paid sick leave to eligible employees for qualifying reasons related to COVID-19. On September 9, 2020, California’s Governor Newsom signed AB 1867. This law expands access to paid sick leave (“Coronavirus PSL”) to California workers employed by entities with 500 or more employees in the United States.

The California Coronavirus PSL (LC 248.1) applies to any private or public entity that is subject to the federal Families First Coronavirus Response Act (“FFCRA”) and who elected to exclude health providers or emergency responders from the FFCRA’s requirements. Covered workers must leave their homes or other places of residence to perform for the hiring entity to qualify for Coronavirus PSL. Notably, Coronavirus PSL does not provide any carve-outs for unionized workers.

While the FFCRA provides an employment tax credit for the pay provided as Emergency Paid Sick Leave, California Coronavirus PSL does not offer such tax relief. As such, California non-health care employers with more than 500 employees might prefer to change their prior FFCRA exclusion election to allow those previously excluded employees to use the paid time off benefit provided under FFCRA and to exempt themselves from compliance obligations under LC 248.1.

Qualifying workers are entitled to receive Coronavirus PSL when:

  1. The worker is subject to a federal, state, or local quarantine or isolation order related to COVID-19;
  2. A health care provider advises the worker to self-quarantine or self-isolate due to concerns related to COVID-19; and
  3. The hiring entity prohibits the covered workers from working due to health concerns related to the potential transmission of COVID-19.

Use of Coronavirus PSL:

  • Qualifying workers are entitled to determine how many hours of leave they need to use and may submit an oral or written request for Coronavirus PSL.
  • Covered workers are not required to use paid or unpaid leave, time off, or vacation the hiring entity provides before, or in place of, using Coronavirus PSL.
  • Businesses also cannot require employees to use paid sick leave already provided under California’s Healthy Workplaces, Healthy Families Act.
  • Unlike the FFCRA, AB 1867 does not require businesses to give Coronavirus PSL for the closure of a child’s school or the unavailability of a childcare provider due to the Coronavirus.

Qualifying workers who work full time or are scheduled to work, on average, at least 40 hours per week for the two weeks preceding from the date of leave, are entitled to 80 hours of Coronavirus PSL. Workers who work less than full time or less than 40 hours per week on average are entitled to Coronavirus PSL as follows:

  • If the worker has a regular weekly schedule, then the worker is entitled to leave in the amount of the total number of hours the worker is usually scheduled to work in a two-week period.
  • If the worker has a variable weekly schedule, then the worker is entitled to leave in the amount of 14 times the average number of hours they worked each day for the hiring entity in the six months preceding the date the worker takes leave. Workers who have worked less than 14 days are entitled to leave at the rate of the total number of hours worked by the worker.

Businesses must pay qualifying workers either their regular rate of pay for the last pay period or the state or the local minimum wage, whichever rate is the highest.

Similar to FFCRA, there is a cap on the amount a business must pay for Coronavirus PSL: $511 per day and $5,110 in total to a qualifying worker. Businesses must pay Coronavirus PSL by no later than the next payday after the worker took the leave.

Businesses are not required to provide Coronavirus PSL if the business already provides a qualifying worker with a supplemental benefit that is equal to or greater than the Coronavirus PSL.

Also, if a business already provided a qualifying worker with Paid Sick Leave between March 4, 2020, and the present, but failed to pay the worker at the rates outlined in the new law, then the business may pay the worker the difference. By paying the worker the difference, the business may count those hours toward the number of hours of Coronavirus PSL the worker is entitled to receive.

Food Sector Employees:

AB 1867 also codified California Executive Order N-51-20, which mandated businesses with 500 or more employees to provide supplemental paid sick leave for food sector workers if they are unable to work due to any of the specified reasons relating to COVID-19.

Time Constraints:

The new law is retroactive to April 16, 2020, when Executive Order N-51-20 took effect. The new law does not mandate food sector employers to provide any additional leave for food sector employees if the business already provided leave for coronavirus based on federal or local law.

Businesses must begin providing Coronavirus PSL by September 19, 2020—10 days after the enactment of the law. Coronavirus PSL will be effective until December 31, 2020, or the expiration of any extension of the FFCRA, whichever is later.

Businesses must include the amount of available Coronavirus PSL each pay period in either a wage statement (pay stub) or in a separate writing. This notice requirement does not apply to food sector employers. Unfortunately, businesses are left with little time to comply with this requirement as the wage statement because businesses provide this information by the next full pay period following the enactment of AB1867.

The California Labor Commissioner has seven days to create a model notice for businesses to provide to workers. Businesses must post a copy of this notice in the workplace, or if workers do not frequent the workplace, businesses may disseminate this notice electronically, such as via e-mail.

Employers should review and revise their policies and practices to ensure compliance with the new law. If you have any questions or concerns regarding the AB 1867, please contact one of the authors of this article or your preferred Dykema attorney.