California on Track to Bring Back COVID-19 Sick Leave Pay

COVID-19 Update

Proposed Legislation Will Require Employers to Provide Additional Leave

Governor Gavin Newsom and legislative leaders announced they had reached an agreement to restore California’s requirement that businesses provide supplemental paid sick leave for employees impacted by COVID-19. The state had previously required employers to provide paid sick leave, but this requirement expired in September 2021.

The final details of the deal are still being determined, but the announced framework will require employers with 26 or more workers:

  • to provide (i) up to 40 hours of paid sick leave due to COVID-19 for full-time employees and (ii) an extended benefit of up to an additional 40 hours if the employee provides proof that they or a family member tested positive for COVID-19.
  • to provide (i) part-time workers with paid sick leave due to COVID-19 equal to the number of hours they work in a week and (ii) an extended benefit of up to the same number of hours for a second week if the employee provides proof that they or a family member tested positive for COVID-19.
  • to provide COVID-19 tests at their own expense.

Under the deal, the sick leave requirements would be retroactive to January 1 and would extend through September 30, 2022.

There are reports that this new COVID-19 related supplemental paid sick leave will only be made available to “frontline workers” but these reports have not been confirmed.  Nor has anyone defined who would qualify as a “frontline worker.”

The legislature is expected to approve the deal on an expedited basis once the final details are agreed.

Newsom, Assembly Speaker Anthony Rendon (D-Lakewood) and Senate President pro Tempore Toni Atkins (D-San Diego) issued a joint statement strongly supporting the deal, saying:

By extending sick leave to frontline workers with COVID and providing support for California businesses, we can help protect the health of our workforce, while also ensuring that businesses and our economy are able to thrive.

It is clear that private employers will bear most of the costs from this new law. To help offset some of these costs, however, Newsom said:

Early budget actions will also include restoring business tax credits, including research and development credits and net operating losses, that were limited during the COVID-19 Recession; tax relief for recipients of federal relief grants for restaurants and shuttered venues; and additional funding for the Small Business Covid-19 Relief Grant Program.

Labor groups have been pushing Newsom for a new package of sick leave support, in particular due to the recent surge of the Omicron variant. Art Pulaski, executive-secretary treasurer of the California Labor Federation, said:

The labor movement supports the proposal announced by the governor and legislative leadership to extend COVID paid sick leave, providing much-needed relief to essential workers and their families. Not only does this measure protect workers, it’s vital to tamping down the surge and keeping schools and businesses open.

While the legislation is headed for fast approval, it will almost certainly be challenged in court. Manatt will continue to monitor developments related to this and other legislation impacting employers related to the COVID-19 pandemic.

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