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Recently enacted legislation (AB 1867, Chapter 45) expands COVID-19 supplemental paid sick leave (SPSL) to cover California employees of employers with 500 or more employeesnationwide and all first responders and healthcare workers.

According to California Governor Gavin Newsom, combined with federal paid leave available to employees of fewer than 500 employees under the federal Families First Coronavirus Response Act (FFCRA) and his previous executive order covering food sector employees, this legislation "fills in gaps in our federal and state paid sick days policy and gives our extraordinary employees a little more peace of mind as they take time to care for themselves and protect those around them from COVID-19." (News release, governor's office.)

As we previously reported (EY Tax Alert 2020-1086), under Executive Order N-51-20 issued in April 2020, Governor Newson provided expanded COVID-19 SPSL to workers in the food sector. Now, AB 1867 extends the same coverage to non-food sector workers; however, unlike the COVID-19 SPSL for food sector workers, the COVID-19 SPSL for non-food sector workers does not apply to independent contractors.

COVID-19 SPSL remains in effect for food sector workers and non-food sector employees until December 31, 2020, the same date that federal law providing for supplemental paid sick leave is set to expire.

If federal law is extended, then COVID-19 SPSL under California law will be extended to the same ending date as federal law.

If the California law expires while a worker is taking COVID-19 SPSL, the worker can finish taking the amount of leave they are entitled to receive.

Program details

Effective September 19, 2020, in addition to covered food sector workers, the expanded COVID-19 SPSL program covers workers who are either:

• Employed by a hiring entity that has 500 or more employees in the US
• Employed as a health care provider or emergency responder, as specified, by a hiring entity, including a public entity, that has elected to exclude such employees from the emergency paid sick leave under the federal FFCRA

Employers must provide the expanded COVID-19 SPSL to covered workers who are unable to work because the particular worker:

• Is subject to a federal, state, or local quarantine or isolation order related to COVID-19
• Has been advised by a health care provider to self-quarantine or self-isolate due to concerns related to COVID-19
• Is prohibited from working by an employer due to health concerns related to the potential transmission of COVID-19

An employer that prior to September 19, 2020, already provides COVID-19-related paid sick leave may receive a credit toward the leave required under the expanded COVID-19 SPSL. To receive a credit, an employer must have an existing supplemental paid benefit program that pays a worker at a rate equal to or greater than what the worker is entitled to under California law. Policies that do not meet the requirements of the law — including those that partially, but not fully, replace a worker's pay (up to $511 per day), provide fewer hours of leave than the law, or do not provide a paid benefit for COVID-19-related reasons — do not meet the criteria for receiving credit.

Hours of leave available

Covered workers are entitled to hours of COVID-19 SPSL as follows:

• 80 hours of COVID-19 SPSL if the worker satisfies either of the following criteria:
• The employer considers the employee to be a "full-time" worker
• The employee worked or was scheduled to work, on average, at least 40 hours per week in the two weeks preceding the date the employee took COVID-19 SPSL

Notwithstanding the above, a hiring entity is required to provide an active firefighter, who was scheduled to work more than 80 hours in the two weeks prior to taking COVID-19 SPSL, the same amount of SPSL as the number of hours that the active firefighter was scheduled to work in those two preceding weeks.

• A worker who does not satisfy any of the above criteria is entitled to an amount of COVID-19 SPSL as follows:
• If the worker has a normal weekly schedule, the total number of hours the worker is normally scheduled to work for or through a hiring entity over two weeks
• If the employee works a variable number of hours, 14 times the average number of hours worked each day for or through the hiring entity in the last six months; if the worker has worked for the hiring entity less than six months, this calculation is instead made over the entire period that the worker has worked for the hiring entity

COVID-19 SPSL is in addition to any paid sick leave the covered worker receives under existing law. An employer is prohibited from requiring a worker to use other paid or unpaid leave, paid time off or vacation time before using COVID-19 SPSL, or in lieu of COVID-19 SPSL.

However, if the employer already provides a supplemental benefit for the same purposes, and in an equal or greater amount than provided for by the COVID-19 SPSL law, the employer may count the hours of such other benefit towards the hours required by the COVID-19 SPSL law. Also, the hiring entity may count paid leave already provided pursuant to Executive Order N-51-20, the COVID-19 Food Sector SPSL or other supplemental paid leave provided under federal or local law for the same purposes.

Employers that previously provided supplemental paid leave on or after March 4, 2020, may retroactively provide to workers supplemental pay to satisfy the COVID-19 SPSL.

Rate of pay

Each hour of COVID-19 supplemental paid sick leave must be compensated at a rate equal to the highest of:

• The worker's regular rate of pay for the last pay period
• The state minimum wage
• The local minimum wage to which the worker is entitled

Go here for a side-by-side comparison of California paid family leave, paid sick leave, federal FFCRA, and COVID-19 SPSL, and here for frequently asked questions on the new law.

Employer notice requirements

Covered employers are required to post a California Department of Labor notice in a conspicuous place in the workplace (this poster is for food sector workers).

California cities and counties with supplemental paid sick leave ordinances

The following California cities and counties have also enacted ordinances or issued orders requiring the payment of supplemental paid sick leave to employees affected by COVID-19.

City of Long Beach. Effective May 19, 2020, Ordinance ORD-26 requires employers with 500 or more employees nationwide to provide SPSL to their employees who perform any work within the geographic boundaries of the City for the employer. (City of Long Beach website.)

City of Los Angeles. Mayor Eric Garcetti ordered, and the city issued regulations, that require city employers with 500 or more employees within the city or 2,000 or more employees nationwide to provide SPSL to employees who had been employed with the same employer from February 3, 2020 through March 4, 2020.

Los Angeles County. Effective March 31, 2020, an ordinance requires Los Angeles county employers with 500 or more employees nationwide to provide SPSL to their employees.

City of Oakland. Effective May 12, 2020, an ordinance requires thatemployers which employed 50 or more employees between February 3, 2020 and March 3, 2020 provide SPSL to employees that worked for the employer at least two hours after February 3, 2020 within the geographic boundaries of the City. Employers with fewer than 500 employees nationwide may credit the SPSL provided under the federal FFCRA against the SPSL required under the city's ordinance. (Oakland city website; workplace poster.)

City of Sacramento. Sacramento City Worker Protection, Health, and Safety Act (Ordinance #2020–0026) effective July 15, 2020 requires city employers of 500 or more employees nationwide to provide SPSL.

Sacramento County. The Sacramento County Board of Supervisors adopted the Sacramento County Worker Protection, Health, and Safety Act of 2020 (Ordinance #1593) that effective October 1, 2020, requires unincorporated county employers of 500 or more employees nationwide to provide SPSL to employees working in the county. The ordinance substantially mirrors the Sacramento City Worker Protection, Health, and Safety Act.

San Francisco. Effective April 17, 2020, San Francisco employers of 500 or more employees worldwide must provide SPSL to their employees. (Ordinance File #200355; San Francisco Office of Labor Standards Enforcement website.)

San Mateo County. Effective July 8, 2020, Ordinance #20-506 requiresSan Mateo County employers of 500 or more employees nationwide to provide SPSL to any employee that performed any work within the geographic boundaries of San Mateo County since January 1, 2020.

City of Santa Rosa. Effective July 7, 2020, Ordinance #20-0491 requires Santa Rosa employers of 500 or more employees nationwide and 50 or more employees within Santa Rosa to provide SPSL to their employees who worked at least two hours within the geographic boundaries of the City of Santa Rosa for the employer.

City of San Jose. The City of San Jose enacted Ordinance #30390 that effective April 7, 2020, requires employers not covered by the federal FFCRA to provide SPSL to their employees.

Sonoma County. Effective August 18, 2020, Sonoma County Ordinance #6320 requires employers of 500 or more employees locally or nationwide to provide SPSL to employees who have worked a minimum of two hours for an employer.

Ernst & Young LLP insights

Although California has enacted a statewide SPSL requirement, employers in various California cities and counties that have also instituted a SPSL requirement should review both the state and local law to confirm they are compliant with both state and local requirements.

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