The passage of legislative changes in March 2021 regarding the extension of Families First Coronavirus Response Act (FFCRA) leave and CA Supplemental Paid Sick Leave (SB 95) have notable impacts on California employers.
The American Rescue Plan Act of 2021 (ARPA), for those employers who voluntarily continue to provide Families First Coronavirus Response Act (FFCRA)-type leave, makes significant changes to how the FFCRA is implemented with regard to both Paid Sick Leave and Emergency Family and Medical Leave (EFML). The ARP Act is effective from April 1, 2021 through September 30, 2021.
The California Supplemental Paid Sick Leave (SB 95), providing a new form of COVID-19 related paid sick leave for many California workers, extends protections to employees who are teleworking, expands the qualifying reasons for COVID-19 sick leave, and lowers the threshold of mandated employers to those with 26 or more employees.
While providing FFCRA leave to employees is voluntary under the ARP Act, providing paid sick leave under the California law SB 95 is mandatory in California for employers with 26 or more employees.
Below is a general summary of the key amendments to FFCRA and the requirements under the newly passed California COVID-19 supplemental paid sick leave.
Key Amendments Under The American Rescue Plan Act Of 2021
Key Changes to Paid Sick Leave
The ARP act resets the 10-day/80-hour limit for Paid Sick Leave starting on April 1, 2021. This means, if employees have previously used their allotment for hours related to FFCRA Paid Sick Leave, they now have another 10-days/80-hours of Paid Sick Leave. The ARP Act also adds a few additional qualifying reasons for Paid Sick Leave for those employees who are unable to work because they are:
- obtaining a COVID-19 vaccine;
- recovering from any illness, injury, or condition related to such vaccine; or
- seeking or waiting for the results of a diagnostic test or awaiting a medical diagnosis.
Key Changes to Emergency Family And Medical Leave
The ARP Act eliminates the requirement that the first two weeks of EFML be unpaid. Now, if an employee qualifies for EFML, the employee is eligible for a full 12 weeks of paid leave (assuming the employee has not previously used any EFML or other leave under the Family and Medical Leave Act (FMLA)).
The Act also expands the qualifying reasons to use EFML. Formerly, employees could only use EFML to care for a child whose school or daycare is closed due to COVID-19 related reasons. However, under the ARP Act, EFML can be used for any of the qualifying reasons found under FFCRA’s Paid Sick Leave (see above) for the qualifying family member. This means, if an employee qualifies for Paid Sick Leave and requires leave beyond the 10-day entitlement for Paid Sick Leave, the employee could potentially take up to an additional 12 weeks of EFML. The impact is that, after April 1, 2021, an employee could potentially take up to a total of 14 weeks of paid FFCRA leave.
California’s COVID-19 Supplemental Paid Sick Leave (SB 95)
SB 95 is broader than California’s prior COVID-19 paid sick leave law and, unlike prior legislation, mandates that employers with 26 or more employees provide supplemental sick leave to their employees for qualifying reasons.
The new sick leave entitlement becomes effective on March 29, 2021. The requirement to provide COVID-19 sick leave applies retroactively to January 1, 2021 and extends to September 30, 2021. The retroactive payment must be paid on or before the payday for the next full pay period after the oral or written request of the covered employee.
Who Is Eligible for Supplemental Paid Sick Leave (“Covered Employee”)?
SB 95 applies to all California employees who are unable to work or telework for a covered employer due to any of the following reasons:
- The employee is subject to a COVID-19 quarantine/isolation period required by local, state, or federal order or guideline
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
- The employee is attending an appointment to receive a COVID-19 vaccination
- The employee is experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework
- The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis
- The employee is caring for a family member who is subject to a quarantine/isolation order or guideline or who has been advised to self-quarantine
- 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
Supplemental Paid Sick Leave Employee Hour Allotment
An employee is entitled to 80 hours of COVID-19 supplemental paid sick leave if the employee either works full-time or was scheduled to work an average of at least 40 hours per week in the two weeks preceding the date the employee took COVID-19 supplemental paid sick leave.
If an employee works part-time and has a normal weekly schedule, the employee is entitled to leave up to the total number of hours the employee is normally scheduled to work over two weeks. If the employee works a variable number of hours, the employee is entitled to 14 times the average number of hours the employee worked each day in the six months preceding the date the employee took COVID-19 supplemental paid sick leave. If the employee has worked for the employer for a period of fewer than six months but more than 14 days, the sick leave calculation is based on the entire period the employee has worked for the employer. If the employee works a variable number of hours and has worked for the employer over a period of 14 days or fewer, the employee will be entitled to leave based on the total number of hours the employee has worked for the employer. The covered employee determines how many and when to use the available COVID-19 supplemental paid sick leave.
Rate of Pay for Supplemental Paid Sick Leave
Non-exempt employees must be paid for their use of supplemental paid sick leave at the higher of the following:
- The employee’s regular rate of pay for the workweek in which COVID-19 supplemental paid sick leave was taken
- The employee’s total wages, not including overtime premium pay, divided by the employee’s total hours worked in the full pay periods of the prior 90 days of employment
- The California minimum wage
- The local minimum wage
Exempt employees must be paid for supplemental paid sick leave in the same way as the employer calculates wages for other forms of paid leave time.
Supplemental paid sick leave benefits are capped at $511.00 per day and $5,110.00 in aggregate for each employee.
Supplemental Sick Leave Interaction with Other Laws
Supplemental paid sick leave (SB 95) is provided in addition to paid sick leave available under Labor Code Section 246 and Assembly Bill 1867. The law prohibits employers from requiring an employee to use any other paid or unpaid leave, paid time off, or vacation time before using supplemental paid sick leave.
An employer can also offset the new supplemental paid sick leave amount with other supplemental benefits previously provided. Leave taken under Labor Code Section 246 and AB 1867 does not count towards the offset. For the offset to apply, the other supplemental benefits (1) must be payable for the same reasons as those provided under SB 95, and (2) must compensate the employee in an amount equal to or greater than the amount provided under the law. The offset generally includes paid leave provided by the employer pursuant to any federal or local law in effect as of January 1, 2021, such as the FFCRA discussed above.
Employers must include notice of the amount of supplemental sick leave available on an employee’s wage statement or in a separate writing provided on the designated pay date with the employee’s payment of wages. Specifically, wage statements must list any supplemental paid sick leave payment as a separate line from other paid leave. The wage statement requirement becomes effective on the next full pay period following the enactment date of the law on March 29, 2021.
Employers must also post a notice in the workplace or a notice distributed to employees summarizing the right to supplemental paid sick leave.
SB-95 Employment: COVID-19: supplemental paid sick leave: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB95
H.R.1319 – American Rescue Plan Act of 2021: https://www.congress.gov/bill/117th-congress/house-bill/1319/text
Disclaimer: These materials are provided for informational purposes only and are not intended as legal or tax advice. Readers of the IBS Blog should contact their legal or tax professionals to discuss how these matters relate to their individual circumstances.