California Enacts Law Providing New Bank of Supplemental Paid Sick Leave Applicable to School Employers
On March 19, 2021, Governor Newsom signed Senate Bill 95 (“SB 95”) into law, which creates new Labor Code section 248.2 and mandates that employers provide employees with up to 80 hours of supplemental paid sick leave (“SPSL”) for various COVID-related absences. SB 95 applies to employers with 26 or more employees. This requirement applies to certain public entity employers, including school districts, county offices of education, and community college districts. SB 95 takes effect 10 days following its enactment into law, on March 29, 2021, and will expire on September 30, 2021.
Background on Law
In 2020, the California Legislature passed Assembly Bill 1867, which extended pandemic-related paid sick leave to certain employees who were excluded from receiving emergency paid sick leave (“EPSL”) under the federal Families First Coronavirus Response Act (“FFCRA”). Most school employees were entitled to take EPSL under the FFCRA; therefore, AB 1867 did not apply. AB 1867 and mandatory leave provisions in the FFCRA expired at the end of the 2020 calendar year. Although Congress extended the tax credit available for employers who voluntarily provided FFCRA leave after December 31, 2020, the obligation to provide paid sick leave expired. California’s Legislature passed SB 95 to address employees’ need for additional paid sick leave benefits caused by the COVID-19 pandemic.
Reasons for Using Leave
SB 95 has notable differences from the FFCRA with respect to the reasons for which employees can use this new bank of 80 hours of SPSL. Under SB 95, employees may use this new bank of SPSL if they are (i) unable to work or (ii) unable to telework, and meet one of the reasons listed below.
- The employee is subject to a federal, state, or local quarantine or isolation period related to COVID-19, as defined by an order or guidelines of the State Department of Public Health, the federal CDC, or a local health officer who has jurisdiction over the workplace.
- The employee is 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 vaccine for protection against contracting COVID-19.
- The employee is experiencing symptoms related to a COVID-19 vaccine that prevent them from working or teleworking.
- 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 federal, state, or local quarantine or isolation order or guidelines related to COVID-19, or who has been advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19.
- 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.
As with other COVID-related paid leave, public employers may not require employees to use other leave (paid or unpaid) before using SPSL. The requirement to provide SPSL remains in effect through September 30, 2021. However, if an employee is using SPSL on September 30 and the absence would continue past September 30, the employee may continue using available SPSL for that absence.
Interaction between SB 95 and Cal/OSHA’s ETS
The Legislature chose to remove one of the qualifying reasons contained in AB 1867, namely when an employee was prohibited from working by the employer due to health concerns related to the potential transmission of COVID-19. Legislative history for fast-tracked SB 95 suggests that this rationale was removed due to the perception that it was unnecessary in light of Cal/OSHA’s Emergency Temporary Standards (“ETS”). Among other workplace regulations, Cal/OSHA’s ETS require public employers to “continue earnings” and benefits for employees who must be excluded from work due to exposure to COVID-19 in the workplace. The Legislature did clarify that public employers may require employees to first exhaust their bank of SPSL under SB 95 before receiving “exclusion pay.”
Amount of Leave and Pay
SB 95 provides an entirely new bank of SPSL. If employees were eligible to receive SPSL under AB 1867 or EPSL under FFCRA and exhausted this paid leave, they will receive a new bank of SPSL under SB 95. Full-time workers will be entitled to 80 hours of SPSL. Part-time workers will be entitled to a prorated amount of SPSL depending on the circumstances. Part-time employees with a normal weekly schedule receive the total number of hours they are normally scheduled to work over two weeks. Part-time employees who work a variable number of hours are entitled to an average number of hours over a certain period of time, depending on how long the employee has been employed.
SB 95 diverges from AB 1867 and the FFCRA in the amount of pay due for SPSL. For non-exempt employees, each hour of SPSL shall be compensated at the highest of the following rates:
- The employee’s regular rate of pay for the workweek in which the employee uses the SPSL, regardless of whether the employee actually works overtime in that workweek.
- The employee’s total non-overtime wages divided by the employee’s total hours worked in the full pay periods occurring during the prior 90 days of employment;
- The state minimum wage; or
- The local minimum wage to which the employee is entitled.
For all employees, SB 95 caps SPSL benefits at the same amounts as prior COVID-related legislation (i.e. the FFCRA and AB 1867) — $511 per day and $5,110 in the aggregate. Notably, unlike under the FFCRA, which provided employees 2/3 pay for leave taken due to childcare, SB 95 requires full pay for all reasons, including childcare.
Many school employers opted to provide FFCRA-type leave beyond 2020 following negotiations with unions. Importantly, the amount of paid leave employees already received in 2021 before SB 95 takes effect might qualify as an offset that wholly or partially satisfies an employer’s SPSL obligations. Specifically, if an employee received paid sick leave after January 1, 2021 for one of the reasons outlined above, and earned compensation at the same rates outlined above, the public employer may deduct this prior paid sick leave from the bank of SPSL otherwise owed to that employee. This offset would not apply to otherwise-qualifying paid leave used in 2020.
Notice and Paystub Requirements
SB 95 requires employers to provide notice to employees of their rights to use the new bank of SPSL. SB 95 directs the Labor Commissioner to draft a model notice template within seven days of the effective date of the bill, i.e. April 5, 2021. Employers may provide this notice to employees electronically, such as via email.
Employers must also include SPSL on employees’ itemized wage statements as a discrete bank of paid leave separate from regular paid sick leave. For part-time employees, public employers must calculate employees’ initial entitlement to their bank of SPSL, using the calculation outlined above, and update that calculation on subsequent wage statements as the employee uses leave. This requirement goes into effect at the start of the next full pay period after the effective date of SB 95 (i.e. March 29, 2021).
Of principal concern to employers, the Legislature drafted SB 95 to apply “retroactively to January 1, 2021.” The bill explains that it applies retroactively “in order to protect the economic well-being of covered employees who took leave” after the expiration of AB 1867 and the FFCRA.
SB 95 identifies how public employers can process retroactive payments, as follows:
- A public employer must provide an employee with a retroactive payment for the period of leave if:
- (1) the employee took leave on or after January 1, 2021, which would otherwise have qualified as COVID-related SPSL under SB 95, and
- (2) the public employer did not provide paid leave (including paying at the rates identified above) to the employee upon oral or written request.
- For retroactive leave payments, the number of hours of leave corresponding to the amount of the retroactive payment may be deducted from the total bank of SPSL hours that the employee would otherwise receive under SB 95.
- Public employers must provide retroactive payments to employees on or before the next full pay period after an employee requests such payment (orally or in writing), and must reflect this payment on the corresponding wage statement.
This process presents several daunting challenges for employers. First, the overall mandate to provide retroactive payments poses enormous practical and/or administrative issues for personnel and payroll staff, particularly when staff did not document the reasons or other details pertaining to prior leave requests. In that event, it is unclear how employers can accurately review and confirm whether an employee’s prior leave use is eligible for a retroactive payment. For example, unclear or missing documentation may make it difficult for public employers to determine whether the leave was sought for a reason that would have met one of the qualifying bases outlined above for SB 95’s SPSL.
The mandate may involve liability exposure for unpaid wages. If an employee believes that they are owed wages for leave taken between January 1, 2021 and March 28, 2021 based on SB 95’s retroactive requirement, it is unclear whether this mandate would also trigger statutory penalties imposed by state wage and hour statutory law — even if public employers provide retroactive compensation for unpaid leave previously taken. SB 95 also does not specify whether employers can restore other forms of paid leave previously used to cover an absence that would have otherwise been eligible for the new bank of SPSL, or whether the new law requires that this retroactive payment be provided as cash compensation. Absent subsequent clarification from the Legislature in a clean-up bill, this issue may require litigation to resolve.
SB 95 imposes complex and urgent provisions, requiring employers to update their policies on pandemic and/or state paid sick leave, review SB 95 requirements alongside existing leave rights that may have been negotiated into MOUs, and to develop protocols to begin administering this new bank of leave in short order. School employers may contact the authors of this Alert or their usual AALRR counsel if they have questions, or would like assistance in preparing their agency to follow the requirements of SB 95.