California's COVID-19 Supplemental Paid Sick Leave Is Back! Compliance Requirements Are Fast Approaching!

Update Feb 18: This advisory has been updated to include the required notice to employees that must be posted in the workplace or otherwise disseminated to employees who work remotely.

On February 9, 2022, Governor Newsom signed a new Supplemental Paid Sick Leave (SPSL) bill (SB 114) into law, which becomes effective on February 19, 2022. The new SPSL law will be codified in California Labor Code Sections 248.6 and 248.7, and is currently set to expire on September 30, 2022.

Like its previous iteration (that expired on September 30, 2021), 2022 SPSL applies to employers with 26 or more employees, and requires that employees retain the same benefits and seniority when they are absent for one of the covered reasons. The new law continues to apply to absences involving either the employee's own covered needs or those of the employee's "family member" (child, parent, spouse, registered domestic partner, grandchild, grandparent, or sibling).¹

Retroactive Application, Offsets, and True-Ups

2022 SPSL applies retroactively to January 1, 2022. The new law permits employers that voluntarily provided SPSL to employees on or after January 1, 2022, to offset the hours paid toward the new maximum entitlements for 2022 SPSL. The amount of paid leave employees already received in 2022 (prior to the law taking effect) should qualify for the offset if an employer voluntarily paid the employee for an absence taken on or after January 1, 2022, and the absence was taken for a reason covered in the new law.

Note that wages paid for absences on after January 1, 2022, cannot be used to offset 2022 SPSL if the wages were paid from an employee's accrued leave bank (such as vacation, sick leave, or PTO), or from protected leave pursuant to California's sick leave law, the Healthy Workplaces, Healthy Families Act (HWHFA). Additionally, an employee who was absent on or after January 1, 2022, for a reason covered under the new law and who used accrued leave or HWHFA may make a verbal or written request to have their previous paid leave reinstated and apply 2022 SPSL to the leave taken.

If an employer made any voluntary wage payments for absences on or after January 1, 2022 (for reasons covered by 2022 SPSL) but the amount paid was less than that mandated under the new law, the employer must true-up the amount previously paid and retroactively pay the difference so that the employee's pay reaches the amount that should have been paid under 2022 SPSL. If an employee makes a verbal or written request for a true-up payment, the wage payment is due on the payday that falls in the next full pay period after the request is made.

Calculation of 2022 SPSL Compensation

The 2022 SPSL provides specific direction on the calculation of compensation for qualifying leave. For nonexempt covered employees, each hour of leave must be calculated either:

• (i)  In the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; or
• (ii)  By dividing the employee’s total wages—not including overtime premium pay—by the employee’s total non-overtime hours worked in the full pay periods occurring within the prior 90 days of employment; provided that, for nonexempt employees paid by piece rate, commission, or other method that uses all hours to determine the regular rate of pay, total wages—not including overtime premium pay—shall be divided by all hours, to determine the correct amount of 2022 SPSL paid sick leave.

For exempt employees, 2022 SPSL must be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

As under the previous law, employers are not required to pay more than $511 per day and $5,110 in the aggregate to a covered employee for 2022 SPSL taken by the covered employee unless federal legislation is enacted that increases these amounts beyond those included in the Emergency Paid Sick Leave Act established by the federal Families First Coronavirus Response Act (Public Law 116-127). If such legislation were to be enacted, the new dollar amounts apply as of the date the new amounts are applicable under the federal law. If available, employees may also choose to use other paid leave to fully compensate the employee for leave taken.

Notable Differences in 2022 SPSL From Previous Law

2022 SPSL differs from its predecessor in a couple of significant ways. The new law provides up to 40 hours of leave for each of two distinct and different "buckets" of leave, with a total maximum of 80 hours for the two combined buckets (described more fully below).

Another change from previous law is that an employer may not require an employee to use 2022 SPSL when the employee is excluded from work due to a close contact or contraction of COVID-19 in the workplace. Exclusion Pay provided by Cal/OSHA's Emergency Temporary Standard (ETS) is a separate entitlement.

2022 SPSL Comes From Two Separate "Buckets" of Leave

There are two different "buckets" from which an employee may take 2022 SPSL. The first bucket is for "Covid-19 Qualifying Reasons," and the second bucket is for "Positive Covid-19 Test Results." An employee may take up to a maximum of 40 hours of 2022 SPSL from each of the two buckets of leaves, for a maximum total of 80 hours.

Bucket 1: COVID-19 Qualifying Reasons

2022 SPSL must be paid to employees who are unable to work or telework for the following reasons:

• 1. The employee is subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidance of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local public health officer who has jurisdiction over the workplace.
• 2. The employee has been advised by a healthcare provider to isolate or quarantine due to COVID-19.
• 3. The employee is attending an appointment for themselves or a family member to receive a vaccine or a vaccine booster for protection against COVID-19.
• 4. The employee is experiencing symptoms or caring for a family member experiencing symptoms related to a COVID-19 vaccine or vaccine booster that prevent the employee from being able to work or telework.
• 5. The employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
• 6. The employee is caring for a family member who is subject to an order or guidance described above or who has been advised to isolate or quarantine, as described above.
• 7. 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.

Note on SPSL for Vaccines and Boosters

The total amount of 2022 SPSL that an employer is required to pay an employee to obtain a vaccine or a booster for the employee or the employee's family member is three workdays or 24 hours for each vaccination or booster shot.

If an employee seeks more SPSL for these reasons, the employer may request that the employee provide verification from a healthcare provider that the employee or family member is continuing to experience symptoms related to a COVID-19 vaccination or vaccine booster shot. The three-day or 24-hour limitation applies to each vaccination or booster shot and includes the time used to obtain the vaccination or booster shot.

Bucket 2: Positive COVID-19 Test Results

2022 SPSL must be paid to employees who are unable to work or telework due to either reason below:

• 1. The employee tests positive for COVID-19.
• 2. The employee's family member tests positive for COVID-19, and the employee is providing care for the family member due to the positive test result.

If an employee tests positive for COVID-19, the employer may require the employee to submit to a diagnostic test on or after the fifth day following the initial test and provide documentation of the results to the employer. The cost of such diagnostic test must be paid by the employer. If the employee fails to submit to a diagnostic test, the employer has no obligation to continue SPSL pay.

If an employee needs to provide care to a family member who tests positive for COVID-19, the law permits the employer to require the employee to provide documentation that the family member requires care from the employee before the employee is eligible for 2022 SPSL. While the statute contains no guidance on what type of documentation can be required, employers should ensure that the employee is not asked to provide any diagnostic information about the family member, and the only documentation that is required is confirmation that the employee must provide care to a family member due to a COVID-19 positive test result.

Proration of 2022 SPSL for Reduced and Variable Schedules

Employees who work a regular schedule of less than 40 hours per workweek receive pro-rated 2022 SPSL based on their regular schedule from each of the two buckets of leave.

• For example, if the employee normally works a 30 hour workweek, the employee is entitled to 30 hours of paid leave from each of the two buckets (totaling 60 hours).
• If the employee works a variable number of hours, the calculation is seven times the average number of hours the employee worked each day for the six months preceding the date the took SPSL.
• If the employee worked over a period of fewer than six months but more than seven days, this calculation is based on the entire period of employment.
• Finally, if the employee working variable hours has worked for the employer for a period of seven days or fewer, the entitlement is the total number of hours the employee has worked for the employer.”

Posting, Notice, and Paystub Requirements

The new law requires that by February 17, 2022, the California Labor Commissioner make publicly available (on its website) a model notice/poster that outlines the requirements of 2022 SPSL. This notice must be conspicuously posted in the workplace and distributed electronically by email to employees who do not frequent the workplace.

Like the old law did in 2021, the new law requires information concerning the use of 2022 SPSL be listed on employees' paystubs or other written notices employees receive on payday. The paystub requirement is not enforceable until the next full pay period following February 19, 2022. Pre-COVID statutory paid sick leave and 2022 SPSL must be displayed separately. Retroactive payments must be on the paystub for the pay period during which payment is made.

In contrast to the previous SPSL law, under 2022 SPSL employers are no longer required to display how many hours of SPSL are available on the paystub (or separate notice). Now, employers must report 2022 SPSL hours that an employee has "used." If no hours have been used, the employer is required to list "zero hours."

Dealing With the Two Separate "Buckets" and Paystub Requirements

Given that there are now two separate 40-hour buckets of leave, employers are likely wondering how on earth to track on paystubs (or the separate notice provided on payday) the use out of each bucket. Currently, the law does not address this question, and it is unclear whether or not employers may aggregate the total of 80 hours.

While DWT hopes to issue updates and clarifications on this issue, in the absence of guidance from the Labor Commissioner, the safest approach will be to separate the two buckets of leave as separate line items on the paystubs or separate notices.

Interaction With Local COVID-19 Paid Sick Leave Ordinances

Certain cities and counties within the State of California maintain local COVID-19 Paid Sick Leave laws. 2022 SPSL makes clear that paid leave pursuant to a local ordinance may be credited toward the 2022 SPSL entitlement if: (1) the employee receives wages equal to or in excess of those wages required under the new law, and (2) that the reason for the leave taken pursuant to the local ordinance is also a covered reason for such leave under 2022 SPSL.

Currently, the cities of Long Beach, Oakland, and Los Angeles, as well as the County of Los Angeles, provide paid leave for COVID-19 related absences. Entitlements under these ordinances currently are not impacted by 2022 SPSL, but DWT will be closely watching these localities to see if any of them repeals or changes their requirements.

Recommended Next Steps for Employers

• Consider the best way to track 2022 SPSL-covered absences to ensure compliance and avoid overpayment.
• Review payroll systems/software to determine if timely compliance for paystub information is feasible, and, if not, develop a separate SPSL usage notice for distribution with each paycheck.
• Consider developing—or having employment counsel develop—leave forms that track the covered reasons 2022 SPSL usage (which will facilitate tracking the type of leave used and whether it comes from Bucket 1 or Bucket 2).
• In the case of an employee seeking time in excess of three days (24 hours) to care for a family member, consider developing a form for the family member's medical provider that lists the definitions of a family member and seeks confirmation both that the individual being cared for falls within the definition and that the employee is needed to provide care or assistance for that individual beyond the three days (24 hours) (no identifying name or underlying diagnosis should be disclosed.)
• Display this required notice to employees where they can easily see it and send electronically to employees who work remotely.
• For employers with operations in localities with COVID-19 paid sick leave requirements, go online to check the status of those ordinances AND review the ordinances to determine which reasons for paid leave overlap with those set forth in 2022 SPSL.

FOOTNOTE

1  There are separate and special provisions the 2022 SPSL law for firefighters, in-home supportive service employees and personal waiver care service providers, which provisions are beyond the scope of this article. DWT attorneys are available to provide guidance to employers with employees in these industries.

The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.

DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.