California Expands COVID-19 Supplemental Paid Sick Leave Requirements

UPDATE: On September 14, the California Labor Commissioner updated its Coronavirus (COVID-19) Information webpage to include revised (food sector workers) & new (non-food-sector-workers) posters. Additionally, it revised its FAQs. The new poster says covered employers must provide CPSL "by September 19, 2020." Similarly, the revised FAQs say they must provide CPSL "starting September 19, 2020 at the latest." The FAQs clarify that new Labor Code section 248.1 does not apply to independent contractors, and that employers to whom Executive Order N-51-20 and now new Labor Code section 248 applies might have new posting-notification obligations.

On September 9, 2020, California Governor Gavin Newsom signed Assembly Bill (AB) 1867, a five-part bill that: (1) codifies existing COVID-19 supplemental paid sick leave (CPSL) requirements for certain food sector workers, (2) adds CPSL requirements for other employers, (3) creates a small-employer family leave mediation pilot program,1 (4) codifies existing COVID-19 handwashing requirements,2 and (5) amends enforcement provisions in California's pre-COVID paid sick leave law,3 the Healthy Workplace Healthy Family Act of 2014. In this article, we focus exclusively on the emergency paid sick leave requirements.

Food Sector Worker Supplemental Paid Sick Leave

Earlier this year, Governor Newsom signed Executive Order (EO) N-51-20, which provided CPSL for food sector workers.  In large part, AB 1867 simply codifies the executive order’s language, creating new California Labor Code section 248 (LC 248).  LC 248 takes effect immediately and is retroactive to the date EO-N-51-20 took effect (April 16, 2020).  We discuss most differences between the EO and LC 248 directly below, but in the next section (Supplemental Paid Sick Leave for Other Workers) we discuss requirements another new statute and LC 248 share, including a provision that may reduce the amount of leave covered employers must provide.

Though modeled after EO N-51-20 and largely incorporating its language, new LC 248 also contains some differences from the executive order.  Under EO N-51-20, employers must provide CPSL during the pendency of any statewide stay-at-home orders. In contrast, LC 248 provides that CPSL requirements will exist until December 31, 2020 – the same end date for the federal Families First Coronavirus Response Act (FFCRA) – or, if the federal government extends the end date for the FFCRA's Emergency Paid Sick Leave Act, the extended-to date.

Another notable difference between EO N-51-20 and LC 248 involves which entities are considered a "food facility." Both the executive order and LC 248 use the definition in California Health and Safety Code section 113789. However, because EO N-51-20 referenced subsections (a) and (b) only, there were questions about the applicability of subsection (c), which discusses entities that do not constitute a "food facility." LC 248 clears up these questions by referencing the entire section 113789, rather than specific subsections.

For employers that provided leave pursuant to EO N-51-20 that are wondering whether they must provide additional leave per LC 248, the law expressly says "no."  Paid leave already provided pursuant to EO N-51-20 or supplemental paid leave provided under federal or local law for the same reasons will satisfy LC 248’s requirement to provide CPSL.

Although EO N-51-20 required the Labor Commissioner to create a notice, and for employers to distribute it to workers, LC 248 merely incorporates the pre-COVID-19 statewide paid sick leave law requirement that employers display a state-created poster. As a result, it is currently unclear whether employers will need to update the mandatory notice created by the California Labor Commissioner, and resend a notice to workers about their CPSL rights.

Supplemental Paid Sick Leave for Other Workers

Unlike the continued CPSL requirements for food sector workers, new CPSL requirements for the following employers and employees will not take effect immediately. At present, the precise date these new requirements will take effect is unknown.  According to the statute’s text, new California Labor Code section 248.1 (LC 248.1) must become operative “not later than 10 days after the date of enactment.” Presumably, the California Labor Commissioner will make this determination.

As with LC 248, new LC 248.1 borrows heavily from the text of EO N-51-20, and incorporates various interpretations of EO N-51-20 issued by the California Labor Commissioner. In addition to obvious differences – who the law covers – there are some differences when it comes to how LC 248.1 operates.

Covered Employers & Employees: New LC 248.1 applies to private "hiring entities" with 500 or more employees in the United States, the District of Columbia, or any U.S. territory, and to individuals who leave their home or place of residence to perform work for a hiring entity that employs them. Moreover, under LC 248.1 (and 248), all covered workers are considered employees, and any hiring entity is considered an employer. LC 248.1 excludes LC 248 employees, i.e., food sector workers, ensuring that food sector workers do not receive double coverage under these new laws.  Notably, unlike a number of other paid sick leave laws, LC 248.1 does not contain an exception for unionized workforces.

Additionally, the law applies to any entity – including a public entity – that is subject to the federal FFCRA and that elected to exclude health care provider or emergency responder employees from the FFCRA's emergency paid sick leave requirements, and thereby extending LC 248.1 to such excluded employees. Given this extension, these employers may wish to revisit the decision to exclude their health care provider and emergency responder employees from FFCRA coverage. In particular, the FFCRA provides an employment tax credit for the pay provided as Emergency Paid Sick Leave while LC 248.1 does not offer such tax relief.  As such, these employers might prefer to change their prior FFCRA exclusion election to allow those previously excluded employees to use the paid time off benefit provided under FFCRA and to exempt themselves of compliance obligations under LC 248.1.

Amount of Leave: The amount of CPSL an employee receives, and can use, under LC 248.1 depends on whether they are "full" time, not "full" time, or active firefighters. For anyone knowledgeable about EO N-51-20, the following standards will look very familiar.

  • A covered worker is entitled to 80 hours of CPSL if the hiring entity considers the worker to work “full time” or the worker worked or was scheduled to work, on average, at least 40 hours per week for the hiring entity in the two weeks preceding the date the worker took leave.
  • For covered workers who are not "full" time, or firefighters, the amount of leave they receive depends on whether they have a normal weekly schedule or work variable hours. Workers with a normal weekly schedule receive an amount of CPSL equal to the total number of hours they are normally scheduled to work for the hiring entity over two weeks. However, if they work a variable number of hours, they receive 14 times the average number of hours they worked each day for the hiring entity in the six months preceding the date they took leave. If their employment tenure includes fewer than six months, the total length of employment is to be used, unless they have been employed for 14 days or fewer, in which case, the total number of hours worked must be used.4
  • Active firefighters5 scheduled to work more than 80 hours for the hiring entity in the two weeks preceding the date the worker took leave are entitled to an amount of CPSL equal to the total number of hours they were scheduled to work for the hiring entity in those two preceding weeks.

As with EO N-51-20, and LC 248, workers covered by LC 248.1 determine how many hours of leave they need to use. Likewise, LC 248.1 requires that CPSL be provided in addition to any paid sick leave available to a worker under California's pre-COVID-19 Healthy Workplaces, Healthy Families Act of 2014 (HWHFA).  Further, LC 248.1 also includes the prohibition against requiring workers to use other paid or unpaid leave, time off, or vacation the hiring entity provides before, or in lieu of, using CPSL.

Some businesses might be able to reduce the amount of leave they must provide. Under LC 248.1 (as well as LC 248),6 if a business already provides a covered worker with a supplemental benefit, such as supplemental paid leave, that is payable for the law's covered reasons and that would compensate the worker in an amount equal to or greater than the amount of compensation the law requires, the business may count the other paid benefit or leave hours towards the total number of CPSL hours it must provide the covered worker. For purposes of both LC 248 and 248.1, paid sick leave a worker receives under California's HWHFA does not qualify as a supplemental benefit.  However, as alluded to above, paid leave already provided per EO N-51-20, or supplemental paid leave provided pursuant to federal or local law for the same reasons the law requires, may qualify. Additionally – for LC 248.1 only – if the business already provided supplemental paid leave between March 4, 2020 and the law's effective date for the law's covered reasons, but did not compensate the worker in an amount equal to or greater than the amount of compensation LC 248.1 requires, the business may retroactively provide supplemental pay to the worker to satisfy the law's pay requirements and apply those hours towards the total number of hours of CPSL the worker is entitled to receive.  The reason for this difference (between LC 248 and LC 248.1) is unknown.

Covered Uses: Like EO N-51-20 and LC 248, workers covered by LC 248.1 can use CPSL when they are unable to work when they are: 1) subject to a federal, state, or local quarantine or isolation order related to COVID-19; 2) advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19; and/or 3) prohibited from working by the hiring entity due to health concerns related to the potential transmission of COVID-19. Unlike the federal FFCRA, and numerous mini-FFCRA ordinances throughout California, employees cannot use CPSL to care for or assist another individual, e.g., they cannot use CPSL if their child's school closes, or childcare provider is unavailable, due to COVID-19. A hiring entity must make CPSL available for immediate use upon the worker's oral or written request.

Rate of Pay: When workers use CPSL, they must be paid their regular rate of pay for the last pay period (including pursuant to any collective bargaining agreement that applies7), or the state or local minimum wage, whichever rate is highest. Note, however, that a different pay rate standard applies to firefighters: the regular rate of pay to which the worker would be entitled if the worker had been scheduled to work those hours, pursuant to existing law or an applicable collective bargaining agreement. In either case, the law caps the maximum amount of pay an employer must provide for CPSL at $511 per day and $5,110 overall. Payment for leave taken must be made no later than the payday for the next regular payroll period after leave was taken.

Notice, Paystub & Recordkeeping Requirements: By seven days after the law's effective date, the California Labor Commissioner must make available a model notice to provide to workers. If workers do not frequent a workplace, a business can disseminate notice electronically, e.g., by email.

Notably, LC 248.1 deviates from most other emergency paid sick leave laws – including EO N-51-20 and LC 248 – in that it includes a paystub requirement, incorporating by reference the HWHFA paystub standard, which requires written notice concerning the amount of leave available on either an itemized wage statement or in a separate writing provided on designated pay dates.

Similar to LC 248.1’s paystub requirement, the law incorporates by reference the HWHFA's recordkeeping requirement.8 Accordingly, for at least three years, a hiring entity must retain records documenting hours worked, leave provided, and leave used by an employee.

Prohibitions: Neither LC 248 nor 248.1 independently establishes prohibitions distinct from the HWHFA. Instead, these new laws incorporate existing HWHFA restrictions. As such, hiring entities cannot require, as a condition of using leave, that workers search for or find a replacement worker to cover the days they use leave. Additionally, they cannot deny a worker the right to use leave, discharge, threaten to discharge, demote, suspend, or in any manner discriminate against a worker for using leave, attempting to exercise the right to use leave, filing a complaint with the California Labor Commissioner or alleging a violation of the law, cooperating in an investigation or prosecution of an alleged violation of the law, or opposing any policy or practice or act that the law prohibits. Moreover, there is a rebuttable presumption of retaliation if a hiring entity denies an employee the right to use leave, discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against a worker within 30 days of any of the employee filing a complaint with the California Labor Commissioner, cooperating with an investigation or prosecution of an alleged violation, or opposing an unlawful policy, practice, or act.

Penalties & Enforcement: Generally, both LC 248 and 248.1 provide for enforcement by the California Labor Commissioner. In discussing available remedies, both statutes reference other laws, such as California's unfair competition law, and incorporate the HWHFA's penalties and damages.

Concerning penalties, a willful poster violation carries a civil penalty of not more than $100 per offense. Additionally, an administrative penalty equal to the dollar amount of leave withheld multiplied by three or $250 (whichever amount is greater) can be assessed, up to a $4,000 aggregate penalty. If a violation results in other harm or otherwise results in a violation of rights, the administrative penalty must include a sum of $50 for each day or portion thereof that the violation occurred or continued, not to exceed a $4,000 aggregate penalty. Further, the California Labor Commissioner can recover investigation and enforcement costs of not more than $50 for each day or portion of a day a violation occurs or continues for each employee or other person whose rights were violated. Finally, penalties for paid leave paystub violations are in lieu of the penalties for a violation of California Labor Code section 226, the state's general paystub law.

In terms of relief that is available to remedy a violation, the following relief is available: reinstatement, back pay, payment of leave withheld, payment of an additional sum, not to exceed a $4,000 aggregate penalty, as liquidated damages in the amount of $50 to each employee or person whose rights were violated for each day or portion thereof the violation occurred or continued, plus, if leave was withheld, the dollar amount thereof multiplied by three or $250, whichever amount is greater; injunctive relief; reasonable attorney’s fees and costs; interest on all amounts due; and other remedies as may be provided by the laws of California or its subdivisions (including, but not limited to, the remedies available to redress any unlawful business practice under the Unfair Competition Law, Business and Professions Code sections 17200 et seq.).

Next Steps

For businesses already subject to EO N-51-20, AB 1867 serves as a reminder to revisit your policies and practices to ensure they (still) comply with the law. Additionally, for businesses that operate a "food facility" and previously questioned whether there was an applicable exception concerning coverage, now is the time to check in with counsel about whether one might in fact exist. For other companies that will be newly subject to these requirements, there is little time to get policies, practices, and – don't forget – payroll programs and paystubs into tip-top shape. Entities that were not covered previously, but were contending with one or more of the 10 similar local ordinances in California, will want to determine whether and how their pre-AB 1867 policies and practices hold up, and whether they might need to provide supplemental paid sick leave to workers under the new state law. Finally, for California businesses that might hope local jurisdictions will pull back their laws, or those cities without a law might shelve the idea of creating a new law, now that the state has stepped in, such hopes may not be realistic. If prior experience holds true in California, the existence of a state law is unlikely to stop local governments from dipping their toes into the pool.9

See Footnotes

1 This provision will become operative if a separate bill, Senate Bill (SB) 1383, is enacted and takes effect on or before January 1, 2021. At the time of publication, SB had not been enacted. The family leave mediation pilot program for employers with between 5 and 19 employees will help employers resolve allegations of non-compliance with expanded family and medical leave rights. Separately, SB 1383 amends the California Family Rights Act, effective January 1, 2021, to apply to employers with five or more employees, rather than employers with 50 or more employees.

2 New California Health and Safety Code section 113963 codifies standards in EO N-51-20: food employees working in any food facility must be permitted to wash their hands every 30 minutes and additionally as needed.

3 As amended, California Labor Code section 248.5(a) reads: "The Labor Commissioner shall enforce this article, including investigating an alleged violation, and ordering appropriate temporary relief to mitigate the violation or to maintain the status quo pending the completion of a full investigation or hearing through the procedures set forth in Sections 98, 98.3, 98.7, 98.74, or 1197.1, including by issuance of a citation against an employer who violates this article, and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 98.74 or 1197.1, as appropriate.

4 This 14 or fewer days standard does not appear in either EO N-51-20 or LC 248.

5 This applies to an active firefighting member of any of the following: 1) A local fire department; 2) A fire department of a state university; 3) The Department of Forestry and Fire Protection; 4) A county forestry or firefighting department or unit; 5) A fire department that serves a United States Department of Defense installation; 6) A fire department that serves a NASA installation; 7) A fire department that provides fire protection to a commercial FAA-regulated airport; and 8) Fire and rescue services coordinators who work for the Office of Emergency Services. There is no definition of what it means to be "active."

6 The language is similar to that used in Executive Order N-51-20: "a Hiring Entity shall not be required to provide a Food Sector Worker with COVID-19 Supplemental Paid Sick Leave if the Hiring Entity provides the relevant Food Sector Worker, as of the effective date of this Executive Order, with a supplemental benefit, such as paid leave, that is payable for the reasons listed in paragraph 1(a) above and that would compensate the Food Sector Worker in an amount equal to or greater than the amount the Food Sector Worker would be compensated through taking COVID-19 Supplemental Paid Sick Leave to which the Food Sector Worker would otherwise be entitled under this Order."

7 The CBA-related language does not appear in either the EO or LC 248.

8 LC 248 also incorporates this requirement.

9 However, state action might have an effect. For example, on September 8, 2020, during a special meeting, the San Diego City Council considered an emergency paid sick leave ordinance. Although it passed the first of two mandatory readings, the Council directed staff not to place the item on a future Council agenda if AB 1867 became law.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.