Governor Newsom Signs SB 95 Extending COVID-19 Sick Leave Benefits through September 30, 2021
On March 19, 2021, Governor Newsom signed SB 95, mandating that private employers in California with 25 or more employees provide COVID-19 supplemental paid sick leave benefits to all full-time and part-time employees in certain COVID-19 related circumstances. The supplemental paid sick leave required under SB 95 is similar to that required under AB 1867 and the Families First Coronavirus Response Act (FFCRA). However, whereas AB 1867 applied to “Hiring Entities” with 500 or more employees and FFCRA applied to employers with fewer than 500 employees, SB 95 broadens the scope of California’s supplemental paid sick leave requirements to all but the smallest employers.
Similar to AB 1867, SB 95 does not contain a reimbursement mechanism. Employers must provide the newly-mandated supplemental paid leave at their own expense. However, the Federal American Rescue Plan, passed on March 10, 2021, extends the Federal payroll tax credit established in the FFCRA to September 30, 2021 for eligible employers with 500 employees or less. This means that eligible employers can utilize the Federal payroll tax credit to cover the mandates specified in SB 95 for employee leaves that qualify under both SB 95 and the FFCRA.
SB 95 requires that employers provide supplemental paid sick leave benefits in certain circumstances that were not covered by AB 1867 or the FFCRA. Employers should carefully evaluate both state and federal statutory schemes to determine how they apply to their operations and the specific obligations they must meet.
Employers Subject to SB 95
SB 95 broadly applies to all “Employers” with more than 25 employees. The term “Employer” means any person employing another under any appointment or contract of hire and includes private sole proprietorships, corporations, partnerships, limited liability companies, and any other kind of business enterprise.
Supplemental Paid Sick Leave
Under SB 95 an employer shall provide COVID-19 supplemental paid sick leave to each “covered employee,” defined as an employee who is unable to work or telework due to any of the following reasons:
(A) The covered employee is subject to a quarantine or isolation period related to COVID-19 as defined by a federal, state or local order or guidelines;
(B) The covered employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
(C) The covered employee is attending an appointment to receive a vaccine for protection against contracting COVID-19;
(D) The covered employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework;
(E) The covered employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
(F) The covered employee is caring for a family member who is subject to an order or guidelines described in subparagraph (A) or who has been advised to self-quarantine, as described in subparagraph (B).
(G) The covered 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.
Both part-time and full-time employees are entitled to receive supplemental paid leave up to 80 hours. For non-exempt employees, supplemental paid leave is to be paid at the highest of (a) the employee’s regular rate of pay for the workweek in which the covered employee uses COVID-19 supplemental paid sick leave; (b) the rate determined by dividing the covered employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment; (c) the state minimum wage; or (d) the local minimum wage to which the employee is entitled. For exempt employees, supplemental paid leave is to be paid in the same manner as the employer calculates wages for other forms of paid leave. However, employers are not required to pay more than $511 per day and $5,110 in the aggregate per employee unless federal legislation is enacted that increases these amounts beyond the amounts that were included in the Emergency Paid Sick Leave Act established by the federal FFCRA, in which case the new federal dollar amounts shall apply to SB 95 as of the date the new amounts are applicable under the federal law.
Employers must make COVID-19 supplemental paid sick leave available for immediate use upon the oral or written request of an employee and may not require that the employee first uses or exhausts any other type of paid or unpaid leave.
SB 95 is Retroactive to January 1, 2021
In order to protect the economic well-being of covered employees who took leave for the reasons listed in SB 95 beginning on or after January 1, 2021, the requirements of SB 95 apply retroactively to January 1, 2021. For such past leave, if the employer did not compensate the covered employee in an amount equal to or greater than the amount of compensation for COVID-19 supplemental paid sick leave to which the covered employee is entitled, then upon the oral or written request of the employee, the employer must provide the covered employee with a retroactive payment. The number of hours paid in retroactive leave count towards the total number of hours of COVID-19 supplemental paid sick leave that the employer is required to provide under SB 95. A retroactive payment must be paid on or before the payday for the next full pay period after the employee makes the request and must be reflected on the written notice or wage statement for that pay period. Since SB 95 provides employees new leave in addition to previous and existing sick leave rights, employers will need to carefully evaluate their obligations to provide SB 95 sick leave benefits, particularly payment of retroactive benefits in response to employee requests.
Employers are required to publish a notice to inform employees of the benefits available to them by displaying a poster in a conspicuous place informing employees of their leave rights. SB 95 directs the Labor Commissioner to publish a model notice within seven days after the date of enactment, i.e., by March 26, 2021. Because many employees have transitioned to remote work arrangements, employers may also satisfy the notice requirement by disseminating the notice through electronic means, such as by electronic mail.
Duration of the Requirement
SB 95 becomes effective on March 29, 2021 (ten (10) days after it was signed by the Governor) and remains in effect until September 30, 2021.