Oakland, California Releases Emergency Paid Sick Leave FAQs

Nearly two and a half months after its emergency paid sick leave (EPSL) ordinance took effect on May 12, 2020, Oakland, California released frequently asked questions (FAQs) about the new law. The FAQs do offer some clarification, but more often merely mirror the ordinance's text, leaving employers with ambiguity on some critical ordinance provisions.

Small Employer Exemption: Save for certain janitorial employees and franchisees, the ordinance exempts employers that employed fewer than 50 employees from February 3 through March 4, 2020. Per the FAQs, the 50-employee threshold includes both full- and part-time employees. Additionally, the FAQs state that, if an employer never employed more than 49 employees at the same time, but, due to turnover, employed 50 or more employees during this period, the exemption applies.

Leave Hours for Employees Working Partially or Intermittently in Oakland. Generally speaking, under the ordinance, employees who work 40 hours per week get 80 EPSL hours, and those who work fewer than 40 hours per week receive an amount equal to the highest number of hours worked over 14 days from February 3 through March 4, 2020. For full-time employees who work in Oakland on an intermittent basis, the "fewer than 40 hours per week" standard applies. The FAQs provide an example in which an employee works 20 hours per week outside Oakland, and 20 hours per week in Oakland; this employee receives 40 Oakland EPSL hours total (rather than 80).

Intermittent Use: Under the ordinance, employees can use leave in one-hour increments and intermittently, as necessary. However, an FAQ says: "reasonable workplace safety concerns and/or federal regulations may prevent an employee from being present at their worksite intermittently if they have been exposed or potentially exposed to COVID 19."

Documentation Costs: The ordinance allows employers to take reasonable measures to verify or document that an employee's EPSL use is lawful, though requiring a doctor's note is unreasonable unless an employee uses leave because the individual has a healthcare-professional-certified condition that puts the employee at a heightened risk of serious illness or death if exposed to COVID-19. Additionally, employers cannot require an employee to incur expenses that exceed $5.00 to demonstrate their eligibility for EPSL. Per the FAQs, if a healthcare appointment charge exceeds $5.00, the employer either must forgo requiring documentation or reimburse the employee for the difference. Additionally, the FAQs make clear that the ordinance's provision allowing employees to certify their need for leave via virtual or telephonic healthcare provider appointments applies with equal force to the documentation exception for a heightened-risk condition.

Unused EPSL Has No Cash Value: Although the ordinance is silent on what happens to EPSL when employment ends, the FAQs clarify that employers need not cash out unused EPSL when employment ends. Additionally, the FAQs state that EPSL expires if an employee does not use it by December 31, 2020.  However, the FAQs also state that the city council may extend the ordinance beyond December 31, 2020, leaving ambiguity as to whether an extension of the ordinance modifies the date on which unused EPSL expires.

Employee Access to Records: The ordinance cites various "enforcement" provisions in Oakland's general paid sick leave ordinance that apply to the EPSL ordinance, e.g., the recordkeeping requirements. The FAQs clarify that additional "general" PSL requirements apply to the EPSL ordinance.  For example, the PSL requirement that, upon request, employers make available employee records extends to EPSL as well.

Cash Out of "General" PSL if Layoff Occurs: One of the more controversial EPSL ordinance provisions is a requirement that, in the event of a layoff, employers cash out unused "general" PSL, something the "general" PSL ordinance itself does not require. The FAQs explain a layoff "includes any employer-initiated separations from employment that is not for good cause," e.g., a separation due to economic reasons. The FAQs also provide examples of what does not constitute a layoff, e.g., a discharge due to poor performance or misconduct.  The FAQs clarify employers need not cash out leave for employees who resign. Under Oakland’s "general" PSL ordinance, the largest amount of PSL an employer must allow an employee's leave bank to contain is 72 hours. The FAQs say that, generally, an employer need not cash out more than 72 "general" PSL hours. The FAQs also go over the rate of pay at which cash-out must occur, which simply discusses rate of pay standards in the "general" PSL ordinance.

FAQs do Not Address All Employer Questions: Some employers might be disappointed that the FAQs do not offer hoped-for clarification on a number of significant issues, especially given the amount of time that elapsed since the ordinance took effect. For example, the FAQs do not discuss how the ordinance interacts with other EPSL laws that might apply to an employee, such as California Governor Newsom's executive order requiring COVID-19 paid sick leave for food sector workers or San Francisco's Public Health Emergency Leave Ordinance. Although the FAQs say employers for whom both the federal EPSLA and Oakland EPSL ordinance apply need not "make double payments," they do not address the "double benefit" issue that concerns many smaller employers. Because the reasons for which an employee can use EPSL under the ordinance are broader than under the federal EPSLA, certain employees might be able to use up to 80 hours of paid leave under each law, for a total of 160 hours overall. Moreover, there is no tax relief under the Oakland ordinance, so half these potential paid benefit hours would be new expenses for such smaller employers.

Additionally, the FAQs do not go beyond the ordinance's text concerning an exemption for employers with paid leave policies that allow employees to accrue annually at least 160 paid leave hours. Many employers with generous paid leave policies were waiting for clarification regarding this exemption because the ordinance's text reads differently from how—based on explanations provided during the city council meeting—the sponsors likely intended the provision to operate.

Next Steps: Now that employers have more information regarding Oakland EPSL, they should review their policies and procedures to ensure compliance and determine whether revisions to policies or modifications to processes must be implemented. Currently, the Golden State’s statewide law for food sector workers, and nine local laws requiring employers to provide emergency paid sick leave, may leave employers with California operations feeling anything but golden as they attempt to navigate compliance in this area.  Given the complexities of these laws, we encourage employers in California to contact knowledgeable employment counsel for assistance.

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.