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.
On February 9, 2022, California’s governor signed Senate Bill (SB) 114, which creates new Labor Code section 248.6. The law takes effect immediately and is retroactive to January 1, 2022, but an employer’s obligation to provide 2022 COVID-19 supplemental California paid sick leave (CPSL) does not begin until 10 days after the governor signs: February 19, 2022.
To employers that had to comply with California’s 2021 CPSL law,1 the statute will look familiar, e.g., there is no direct tax or financial relief to employers for providing 2022 CPSL.2 Various provisions, however, are different. As a result, employers will not be able to simply restart policies and practices in 2022 they previously had in place to comply with the 2021 CPSL, though it is important to note it may be possible to offset this new CPSL obligation with paid leave already provided in 2022. Because 2022 CPSL does not preempt local ordinances, employers may have compliance obligations under the state law and possibly up to four similar – but not identical – local ordinances in Long Beach, Los Angeles (City and County), and Oakland.
Below, we focus on provisions of the 2022 law (Labor Code section 248.6) that apply to employers generally, and do not discuss provisions applicable to either firefighters (also covered by Labor Code section 248.6) or providers of in-home supportive and/or waiver personal care services (Labor Code section 248.7).
Covered Employers, Employees and Family Members: New Labor Code section 248.6 will apply to employers with 26 or more employees and to a number of public entities. The 2022 law does not apply to employers with 25 or fewer employees.
Section 248.6 covers all employees. Additionally, it allows employees to use leave to care for family members. Family member is defined to include a child, grandchild, grandparent, parent, sibling, or spouse.
Reasons Employees Can Use, and Duration of, Leave: Employees who are unable to work or telework can use the new CPSL for the following reasons, which are more numerous than reasons employees could use California CPSL in 2021 (language in bold reflects the new 2022 CPSL use reasons):
- Employee is subject to a quarantine or isolation period related to COVID-19 as defined by federal, state, or local orders or guidance.
- Employee is advised by a health care provider to self-quarantine or isolate due to concerns related to COVID-19.
- Employee or family member is attending an appointment to receive a COVID-19 vaccine or booster.
- Employee or family member is experiencing symptoms related to a COVID-19 vaccine or booster that prevent the employee from being able to work or telework.
- Employee is experiencing COVID-19 symptoms and seeking a medical diagnosis.
- Employee is caring for a family member who is subject to a quarantine or isolation order or guidance or who has been advised to self-quarantine or isolate by a health care provider due to concerns related to COVID-19.
- 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.
- Employee tests positive, or is caring for a family member who tests positive, for COVID-19.
The requirement to provide CPSL remains in effect through September 30, 2022. If an employee is using CPSL on September 30, however, and the absence would continue without interruption past September 30, the employee gets to continue using available CPSL for that absence.
Importantly, the 2022 law addresses how it interacts with Cal-OSHA requirements differently than does the 2021 law. Specifically, if Cal-OSHA COVID-19 Emergency Temporary Standards (ETS) or Cal-OSHA Aerosol Transmissible Diseases Standard (ATDS) requires an employer to maintain an employee’s earnings when an employee is excluded from the workplace due to COVID-19 exposure, employers cannot require an employee to first exhaust CPSL.
Amount of Leave Employees Receive and Can Use: The process for determining the amount of leave employees receive and can use under the 2022 law is slightly different from the 2021 law.
The maximum potential amount of CPSL an employee can receive is 80 hours for full-time employees (a proportionate amount for other employees). Unlike prior iterations of CPSL, however, there will be two separate “up to 40-hour” leave banks.
- Leave hours from one “up to 40-hour” bank will be available only if the employee tests positive for, or is caring for a family member who tests positive for, COVID-19.
- Leave hours from the second “up to 40-hour” bank will be available only for other covered reasons (quarantine or isolation, vaccine appointments or recovery, experiencing COVID symptoms and seeking medical diagnosis, closure of school or place of care for reasons related to COVID-19 on the premises).
Regarding the second bank, time off for a COVID-19 vaccine or booster shot can be limited by the employer to three days or 24 hours. This time includes time spent attending an appointment and/or for COVID-19 vaccine or booster shot-related symptoms (for each vaccine/booster). If a health care provider verifies the individual continues to experience symptoms related to the vaccine/booster, more than three days or 24 hours of time off may be available. Because of this “continuing symptoms” exception and the ability of an employee to use leave per vaccine and to care for or assist a family member, it is possible that an employee could use the entire second bank of leave for obtaining and/or recovering from a COVID-19 vaccine/booster purposes, contrary to many reports published before the text became available that suggested employers could limit vaccine-related absences to three days or 24 hours total.
Undoubtedly, employers will have questions about how, and in what amount, they should categorize absences that wholly or partially qualify as both “first” and “second” bank absences. For example, how should leave be allocated when an individual must quarantine or isolate after testing positive for COVID-19, or an employee tests positive for COVID-19 after experiencing symptoms and seeking a medical diagnosis? The law does not address this issue, so employers will need to look to the California Labor Commissioner for guidance.
Concerning how to calculate the amount of leave employees receive:
- Full-Time Employees: Employees receive 40 hours (for each bank of leave) if either their employer considers them to work full time or, on average, they worked or were scheduled to work at least 40 hours per week in the two weeks preceding the date they took leave.
- Non-Full-Time Employees: Employees with a normal weekly schedule receive the total number of hours they are normally scheduled to work over one week (for each bank of leave). Employees who work a variable number of hours and whose tenure is six months or more receive seven times the average number of hours they worked each day in the six months preceding their leave date (for each leave bank). If they have worked only between 8 days and six months, employers are to use this same calculation but over the employee’s entire period of employment. Employees who have worked 7 days or fewer receive leave hours equal to their total number of hours worked (again, for each leave bank).
The Offset: As noted above, the amount of paid leave employees already received in 2022 before the law takes effect might qualify as an offset that wholly or partially satisfies an employer’s 2022 CPSL obligations. Under the law, if an employer pays an employee another benefit for leave taken on or after January 1, 2022 that is payable for the law’s covered reasons and compensates employees in an amount equal to or greater than the amount of pay the law requires (we discuss pay further below), an employer may count those hours toward the number of hours of CPSL it must provide an employee under the new law. Note, however, this must be a supplemental benefit, so employers cannot count paid sick leave employees have used under California's Healthy Workplaces, Healthy Families Act (HWHFA), the pre-COVID paid sick and safe time law, or 2021 CPSL toward their 2022 CPSL obligation. But employers can use as an offset paid leave they provided per a federal or local law in effect, or that became effective on or after, January 1, 2022, if that leave was provided to an employee for any of the California law’s covered reasons.
What about qualifying supplemental benefits paid in 2022, but before the law took effect that were compensated at a pay rate lower than what the California law requires? An employer must true-up (i.e., increase retroactively) the pay to what California’s law would have required (had it been in effect when the employee took leave in 2022), such that the leave qualifies for the offset. If a payment is made due to an employee’s oral or written true-up request, payment must be made on or before the payday for the next full pay period after the request.
Additionally, a new provision addresses situations when the employer paid an amount equal to or greater than what 2022 CPSL requires. In this situation, if an employee requests that 2022 CPSL be applied to the prior absence, the employer must apply (or “credit”) 2022 CPSL to that absence, rather than using the other benefit that was applied to the absence. Employers might expect to see such a request if, for example, in the period before the CPSL obligation begins, the employee had to use HWHFA paid sick leave to cover an absence.
Employee Obligations when Using Leave: Employees alone determine how many CPSL hours they need to use. Employees get to choose whether they will use CPSL or some other paid or unpaid leave benefit their employer provides, or the law requires, to cover an absence.
Employees can use 2022 CPSL immediately, on or after February 19, 2022, if they make an oral or written request to use leave. Like its 2021 predecessor, the 2022 CPSL law does not generally contain language allowing employers to ask employees to provide verification or documentation to substantiate their need for leave. However, as we note above, employees can use more than three days or 24 hours of 2022 CPSL to recover from the vaccine or booster if a health care provider verifies the person has continuing symptoms from a vaccine or booster. Additionally, employers can require employees to provide documentation of the test result when leave is used for situations where the employee or family member tests positive for COVID-19. If an employee refuses to provide documentation, the employer can deny leave.
Another new provision provides that, when an employee or family member tests positive for COVID-19, employers can require employees to take another diagnostic test on or after the fifth day after the first test and provide documentation of the results. Importantly, in such a circumstance, an employer must make the test available at no cost to the employee. Accordingly, employers that want to explore this option should talk with knowledgeable counsel about legal, administrative, and practical issues that can arise.
Rate of Pay When Employees Use Leave: The 2022 CPSL pay rate calculation will not use a “highest of” pay rate standard (like in 2021) for “non-exempt” employees. Instead, the two-pay calculation options will largely mirror – but not be identical to – pay rate calculations required by the HWHFA. Although the “regular” rate option aligns with the HWHFA, the 2022 CPSL “90-day lookback” calculation differs. Generally, employers include total wages, excluding overtime premium pay – as they would under the HWHFA – but for 2022 CPSL they divide by total non-overtime hours worked in the full pay periods occurring within the prior 90 days of employment. Under 2022 CPSL, the only reason employers would divide by all hours worked – as they would do under the HWHFA – is when the employer pays the employee “by piece rate, commission or other method that uses all hours to determine the regular rate of pay.”
For 2022 CPSL, there will be no difference from the 2021 CPSL concerning how to calculate CPSL pay for exempt employees: employers calculate CPSL in the same manner they calculate wages for other forms of paid leave. Although the 2022 law does not define “exempt,” an “exempt” definition is included in the state’s pre-COVID paid sick and safe time law. Moreover, under that law, the state labor department, in an opinion letter, said employees are only “exempt” if they are executive, administrative, or professional employees.
Whether “exempt” or otherwise, like the 2021 law, employers need not pay more than $511 for each day an employee uses CPSL, or more than $5,110 overall. Employees who max out because of the pay caps can use other available paid leave they have (“top up”) so they are fully compensated during the absence.
Notice, Posting & Paystub Requirements: Within seven days of the date of enactment, the state labor department must make a model poster publicly available, which employers must conspicuously display in their workplaces. If employees do not frequent a workplace, employers can distribute the poster electronically, e.g., by email.
Like it did in 2021, California requires information concerning CPSL be available on paystubs or other written notices employees receive on payday. Also, like 2021 standards, there are provisions that say the paystub requirement is not enforceable until the next full pay period following February 19, 2022, that CPSL and pre-COVID statutory paid sick leave be displayed separately, and that retroactive payments must be on the paystub for the pay period during which payment is made.
However, unlike the 2021 law where employers only had to display CPSL “available,” employers only must report 2022 CPSL hours an employee “used” (reporting “zero hours” until an employee uses CPSL). Given the two-bank setup, employers will wonder whether they must include two separate lines (one for each bank) or a single line (representing aggregate leave used from both banks); however, the law does not address this issue, so employers need to obtain guidance from the California Labor Commissioner.
Notably, the 2022 law (unlike the 2021 law) does not incorporate into the statute guidance the state labor department issued concerning the 2020 paystub requirement. Specifically, for part-time, variable hour employees (part-time employees who don’t have a regularly set schedule), the 2021 law said employers may meet their paystub obligations by performing an initial calculation of CPSL and indicating “(variable)” next to that calculation, which employers had to update when employees requested to use CPSL. This difference, however, might be of no consequence and simply be a result of how the paystub reporting requirement will change from leave “available” to leave “used.” When it eventually issues guidance, the California Labor Commission could readopt its position that employers must re-calculate CPSL hours for these employees each time they request to use leave. At this point, it is unclear what the Labor Commission will say.
Next Steps: Employers should monitor the California Labor Commissioner’s webpage, COVID-19 Guidance and Resources, to learn when it publishes the mandatory poster and/or FAQ. Employers should also monitor legislative and agency webpages in Long Beach, Los Angeles (City), Los Angeles (County), and Oakland – where local CPSL ordinances remain in effect in 2022 – to see what effect, if any, California 2022 CPSL has on the locality repealing, continuing and/or revising its CPSL ordinance (and, in L.A. County, paid vaccine leave ordinance). And, of course, employers with questions about 2022 CPSL in California should consult knowledgeable counsel.
1 For more information about the 2021 CPSL law, please see Michelle Falconer, Robert Blumberg, Adam Fiss, and Sebastian Chilco, California Enacts (Retroactive) 2021 Emergency Supplemental Paid Sick Leave Law, Littler Insight (Mar. 22, 2021).
2 Currently, there are separate budget bills that address other forms of potential tax relief for certain businesses, industries, and/or scenarios. Additionally, during the February 7 Assembly and Senate floor debates, there was discussion about the possibility of additional tax relief in budget bills the legislature will pass later, in early summer. There was, however, little discussion about whether and to what extent that relief might extend to entities other than “small” businesses.