COVID-19: Federal, State and Local Leave Issues

In response to the COVID-19 pandemic, the federal, state and local governments passed a series of laws providing leave benefits to employees for COVID-19-related reasons. First, the federal government passed the Families First Coronavirus Response Act (FFCRA) on March 18, 2020. The FFCRA created short-term expanded employee benefits and protections related to COVID-19, including a new federal paid sick leave law and an emergency expansion of the Family and Medical Leave Act (FMLA), through the end of 2020.

Read about 2021 legislation and recently issued guidance.

This page contains the following information:

California followed the federal legislation with state supplemental paid sick leave legislation, which originally expired at the same time as the federal FFCRA at the end of 2020. Local governments also passed their own COVID-19 paid sick leave ordinances, many of which have been revised and extended into 2021.

  • The FFCRA expired on December 31, 2020. However, on December 27, 2020, the federal Consolidated Appropriations Act extended the ability of employers to claim reimbursement tax credits for providing leave under the FFCRA up through March 31, 2021. On March 11, 2021, the American Rescue Plan Act further extended the FFCRA tax credits from April 1, 2021 to September 30, 2021. This means that while the FFCRA leave mandates have expired, employers may choose to voluntarily provide employees with leave under the FFCRA and claim reimbursement tax credits for doing so through September 30, 2021. Additionally, the American Rescue Plan Act also expanded the qualifying reasons for leave under the FFCRA, noted below under “Reasons for Leave.”
  • On March 19, 2021, SB 95 brought back California COVID-19 Supplemental Paid Sick leave with some big changes. SB 95 expands employer coverage from previous supplemental paid sick leave, adds qualifying reasons for which leave can be taken, and provides a fresh bank of leave to employees. It is retroactive to January 1, 2021 and extends through September 30, 2021.

Families First Coronavirus Response Act

This section outlines the FFCRA’s main provisions, including information from the U.S. Department of Labor’s (DOL) FFCRA guidance and implementing regulations.

While the FFCRA’s Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act mandates expired on December 31, 2020, subsequent federal COVID-19 relief legislation has extended the ability of eligible employers to voluntarily provide leave after December 31, 2020 to employees that otherwise would have met the requirements of the FFCRA and claim tax credits for such paid leave, as long as employers follow FFCRA rules.

The first extension under the Consolidated Appropriations Act of 2021 allowed eligible employers to continue voluntarily providing FFCRA leave to employees that didn’t use all their leave in 2020 and receive the tax benefit through March 31, 2021.

Most recently, the American Rescue Plan Act (ARPA), signed on March 11, 2021, further extends the ability to provide FFCRA leave and claim tax credits through September 30, 2021. ARPA also resets the paid sick leave bank under the FFCRA beginning April 1, 2021 for employers that opt to provide such leave. So, employees that already used their FFCRA paid sick leave allotment in 2020 will have it reset starting April 1, 2021.

In addition to extending the tax credits, ARPA allows employees to take emergency family and medical leave for the same qualifying reasons as the paid sick leave and added three more qualifying reasons for which employees can take leave under the FFCRA. In addition to the original qualifying reasons, an employee can take leave when unable to work or telework when the employee is:

  1. Obtaining immunization (vaccination) related to COVID-19;
  2. Recovering from any injury, disability, illness or condition related to such vaccination; or
  3. Seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 and the employee has been exposed to COVID-19 or their employer has requested such a test or diagnosis.

Though providing FFCRA leave is now voluntary, if an employer chooses to provide FFCRA leave, they must do so for all classes of employees and otherwise follow all FFCRA rules in order to claim tax credits.

Employers should consult with legal counsel with any questions about the optional provision of FFCRA leave, the tax implications and potential interactions with other state laws and/or local ordinances. Employers should also regularly monitor both the U.S. Department of Labor and Internal Revenue Service websites for updated guidance.

Emergency Paid Sick Leave

The FFCRA required many employers to provide paid sick leave to their employees for qualifying reasons related to COVID-19.

Coverage and Eligibility

Employers with fewer than 500 employees were required to provide full-time employees with an additional 80 hours of paid sick leave, or, for part-time employees, the number of hours equal to the hours worked during an average two-week period. For part-time employees with varying schedules, employees can base their calculation on the average number of hours the employee was scheduled per day over a six month period, or, if they haven’t worked that long, the reasonable expectation of the average hours the employee is expected to be scheduled to work.

The DOL provided more guidance on how to calculate hours for part-time employees in its FFCRA regulation.1

Full-time Employees

The regulation clarifies that employees are considered full-time if they’re scheduled to work at least 40 hours per week. Additionally, if an employee has an irregular schedule but averages 40 hours or more per week over the six-month period prior to taking leave, the employee is considered full time and may take up to 80 hours of paid sick leave.

Part-time Employees

The DOL provided the following guidance for part-time employees:

  • If the employee has a normal weekly schedule, the employee is entitled to the number of hours the employee is normally scheduled to work over two workweeks.
  • If the employee has a varying schedule and has been employed for at least six months, the employee is entitled to up to the number of hours equal to 14 times the average number of hours that the employee was scheduled to work each calendar day over the six-month period ending on the date on which the employee takes leave, including any hours in which the employee took leave of any type.
  • If the employee has a varying schedule and has worked less than six months, the employee is entitled to number of hours equal to 14 times the number of hours the employee and employer agreed the employee would work, on average, each calendar day. If there is no agreement, the employee is entitled to the number of hours equal to 14 times the average number of hours per calendar day that the employee was scheduled to work over the entire period of employment, including any hours in which the employee took leave of any type.

For example, if an employee takes leave on April 13, 2020, the six-month period for estimating hours is October 14, 2019, to April 13, 2020, which consists of 183 calendar days. In that time, the employee worked 550 hours over 100 workdays and took 100 hours of personal and medical leave, which means the employee has 650 total hours. Next, divide 650 hours (the total hours) by 183 calendar days, which equals 3.55 hours per calendar day (650/183 = 3.55). Then, multiply 3.55 hours by 14 (the number of calendar days in two weeks) to obtain the two-week average of 49.7 hours (3.55 x 14 = 49.7).

The leave was provided in addition to any existing paid leave available to employees and is available for immediate use, regardless of how long the employee was employed — meaning it doesn’t need to be accrued like most paid leave.

Reasons for Leave

Originally, under the FFCRA’s emergency paid sick leave provisions, employers were required give emergency paid sick time for the six qualifying reasons (reasons 1-6 below). The latest COVID-19 relief bill, the American Rescue Plan Act, expanded the list of qualifying reasons for which employees can take FFCRA leave, should employers choose to provide such leave. Under ARPA, employees may take paid sick leave when the employee is unable to work (or telework) because the employee is:

  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 due to concerns related to COVID-19;
  3. Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. Caring for an individual who is subject to a government quarantine or a self-quarantine advised by a health care provider (reasons 1 and 2 above);
  5. Caring for their child if the child’s school or place of care has been closed, or the childcare provider is unavailable due to COVID-19 precautions; or
  6. Experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services.
  7. Obtaining immunization (vaccination) related to COVID-19;
  8. Recovering from any injury, disability, illness or condition related to such vaccination; or
  9. Seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 and the employee has been exposed to COVID-19 or their employer has requested such a test or diagnosis.

Rate of Pay

Employees must be paid at their regular rate for reasons No. 1 through No. 3 above, except that pay cannot exceed $511 per day and $5,110 total. Additionally, under the changes made by the American Rescue Plan Act, reasons No. 7 through No. 9 are also compensated at employees’ regular rate with a cap of $511 per day.

When employees take paid sick leave to care for someone else, or the employee is experiencing any other “substantially similar condition,” i.e., reasons No. 4 through No. 6 above, then employers can pay employees two-thirds their regular rate, except that pay cannot exceed $200 per day and $2,000 in the aggregate in those circumstances.2

The FFCRA regulation specifies that employers must pay employees the higher of the employee’s “average regular rate,” the federal minimum wage, or any state or local minimum wage the employee is entitled to. For most employers, this is going to require calculating the average regular rate.

To determine the “average regular rate,” employers must compute the “regular rate for each full workweek” in which the employee has been employed over the six months preceding leave, or if employed for less than six months, the entire period of employment. Employers must then compute the average of the weekly rates, weighted by the number of hours worked for each workweek.3

Additionally, an employee’s commissions, tips and piece rates are incorporated into the calculation of the regular rate under this law in the same way they are under the Fair Labor Standards Act (FLSA).

If, over the six-month period, an employee is paid exclusively through fixed hourly wage or salary, the average regular rate would equal the hourly wage or hourly equivalent of their salary.

But, if an employee is paid through different arrangements, such as piece rate, commissions or tips, the regular rate may fluctuate from week to week. In that case, for each full workweek in the six-month period, employers will calculate all remuneration not excluded from the regular rate under the Fair Labor Standards Act. Then, employers will compute the number of hours worked for each full workweek. (Note: This does not count hours when the employee took leave.) Finally, divide the total pay over the six-month period by all hours worked. The result is the average regular rate.

For example, if there are 26 full workweeks in the six-month period, and an employee worked 1,150 total hours over those weeks and received $23,000 in non-excludable remuneration, then the average regular rate is $20.00 ($23,000 divided by 1,150 hours).

The DOL addresses calculation of the average regular rate in its Q&A guidance. (See #8 – “What is my regular rate of pay for purposes of the FFCRA?” and #82 “How do I compute my employee’s average regular rate for the purpose of the FFCRA?”)

To read more about the regular rate, see “Regular Rate of Pay Defined” in Calculating Overtime.

Notice Requirements

Employers were obligated to post the emergency paid sick leave requirements for employees in conspicuous places at the worksite. The DOL issued a model poster employers may use, and stated on a notice Q&A page that employers can comply with notice requirements for teleworking employees in one of two ways: by emailing or direct mailing this notice to their employees or by posting the notice on an “employee information internal or external website.”

Exemptions

The law allowed the exemption of health care providers and emergency responders from the sick pay requirements, including allowing them to opt out. It also allowed for the exemption of small businesses with fewer than 50 employees from the requirement to pay sick leave when the employee misses work while caring for their child if the child’s school has been closed, or the childcare provider is unavailable due to COVID-19 precautions (reason No. 5 above), when the requirements would “jeopardize the viability of the business as a going concern.”

Emergency Family and Medical Leave Expansion

The FFCRA temporarily provided up to 12 weeks of emergency FMLA leave for a “qualified need related to public health emergency.”

Coverage and Eligibility

For specified COVID-19-related reasons, the current employee threshold for coverage was changed from covering employers with 50 or more employees to covering any workplace with fewer than 500 employees. Employee eligibility requirements for emergency FMLA were also lowered. Instead of working 1,250 hours in the preceding 12 months, the emergency FMLA provisions applied to any employee who has been employed for at least 30 days.

Reason for Leave

Originally, under the FFCRA, an employee could only take emergency FMLA leave when the employee is unable to work (or telework/remote work) due to a need to care for the employee’s child under 18 years of age if the school or place of care has been closed or the childcare provider is unavailable due to a public health emergency related to COVID-19. DOL regulations also state that employees may take leave to care for a child 18 or older who is incapable of self-care because of a mental or physical disability.

The most recent COVID-19 relief bill, the American Rescue Plan Act, expanded the emergency FMLA qualifying reasons to mirror the paid sick leave reasons. Now, for employers who choose to voluntarily provide FFCRA leave, an employee may take emergency FMLA when the employee is:

  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 due to concerns related to COVID-19;
  3. Experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  4. Caring for an individual who is subject to a government quarantine or a self-quarantine advised by a health care provider (reasons 1 and 2 above);
  5. Caring for their child if the child’s school or place of care has been closed, or the childcare provider is unavailable due to COVID-19 precautions; or
  6. Experiencing any other “substantially similar condition” specified by the Secretary of Health and Human Services.
  7. Obtaining immunization (vaccination) related to COVID-19;
  8. Recovering from any injury, disability, illness or condition related to such vaccination; or
  9. Seeking or awaiting the results of a diagnostic test or medical diagnosis for COVID-19 and the employee has been exposed to COVID-19 or their employer has requested such a test or diagnosis.

Paid Leave

Originally, under the FFCRA, the first 10 days of emergency FMLA leave were unpaid and employees could elect to substitute vacation, personal leave or paid sick leave during that time. After the first 10 days, the employer had to pay full-time employees at a rate of no less than two-thirds of their regular rate of pay for the hours normally scheduled for up to 10 weeks.

Under the new American Rescue Plan Act, if an employer decides to voluntarily provide FFCRA leave, the entire 12 weeks of emergency FMLA is paid. Accordingly, qualified paid leave wages eligible for tax credit reimbursement under the law are capped at $200 per day and $12,000 in the aggregate, per individual. (Originally, emergency FMLA was capped at $10,000 total per employee.)

Employees who work part-time, irregular schedules are entitled to a rate based on the average number of hours worked over a six-month period. If they haven’t worked that long, then they’re entitled to the average number of hours per day that the employee would normally be scheduled to work.

The FFCRA regulations specified that employees receive two-thirds of their “average regular rate” (as described in the Emergency Paid Sick Leave section above) multiplied by the employee’s scheduled number of hours for each day of leave taken.4

The scheduled number of hours is determined as follows:

  • If the employee has a normal work schedule, then it is the hours the employee is normally scheduled to work on that day.
  • If the employee has a varying schedule and has been employed for at least six months, the employee is entitled to the average number of hours the employee was scheduled to work each workday over the six-month period ending on the date on which the employee takes leave, including any hours in which the employee took leave of any type.
  • If the employee has a varying schedule and has worked less than six months, the employee is entitled to the average number of hours employee and employer agreed the employee would work, on average, each calendar day. If there is no agreement, the employee is entitled to the to the average number of hours per workday that the employee was scheduled to work over the entire period of employment, including any hours in which the employee took leave of any type.

Using the same example from the paid sick leave section above of an employee working 550 hours over 100 workdays and taking 100 hours of personal and medical leave within the six-month period, the number of hours per workday is calculated by dividing 650 by the 100 workdays, which is 6.5 hours per workday. That employee would be entitled to 6.5 hours pay for each day of expanded leave taken at two-thirds of their average regular rate, subject to the cap.

  • Note that an employee’s average hours per workday may exceed eight hours per day. If, after doing the above calculation, an employee averages 9.2 hours per workday, the employer must pay the employee 9.2 hours for each day of leave times two-thirds of the employee’s average regular rate, but it’s still subject to the cap.

The regulation also allowed employers to compute the amount of pay in hourly increments instead of full days. For each hour of expanded FMLA (after the first two weeks) the employer must pay two-thirds of the employee’s “average regular rate.”5

Exemptions

The law allowed for the exemption of certain health care providers, emergency responders and small businesses with fewer than 50 employees from its requirements when they would jeopardize the viability of the business.

Job Protections

As with standard FMLA leave, the emergency leave was protected, meaning an employer had to return the employee to the same or an equivalent position upon their return. Small employers with fewer than 25 employees are exempted if the position doesn’t exist due to economic conditions or other changes in operating conditions that affect employment and are caused by a public health emergency. However, the employer was required to make reasonable efforts to restore the employee to an equivalent position, and, if those efforts fail, the employer had to make reasonable efforts to contact the employee if an equivalent position opens within a year.

Tax Credits

The act provided quarterly tax credits for employers required to pay for leave under the paid sick leave or emergency FMLA requirements. The IRS issued guidance and FAQs on its tax credit plan detailing the plan’s specifics.

  • December 27, 2020, the federal Consolidated Appropriations Act extended the FFCRA tax credits through March 31, 2021. Subsequently, the American Rescue Plan of 2021, signed into law on March 12, 2021, extended the FFCRA tax credits from April 1, 2021 through September 30, 2021. This means that — though the FFCRA leave mandates expired on December 31, 2020 — employers may, at their discretion, provide COVID-19-related leave under the FFCRA framework and claim related tax credits up through September 30, 2021

Employers should review the IRS guidance for detailed instructions on how to claim their tax credits.

U.S. Department of Labor Regulations and Guidance

The DOL posted FFCRA guidance on its website, addressing, for example, how the new federal leaves work with existing leaves, whether they can be taken intermittently, documentation, the effect of worksite closures and reduced hours, and some additional information on the small business exemption.

The DOL also issued regulations on April 1, 2020 that provide additional clarity and certainty on the FFCRA’s requirements. The following highlights some of the big issues but is not exhaustive.

Documentation

  • The FFCRA regulations require employees to provide notice to their employers of their need to take either paid sick leave or expanded family and medical leave.

The notice must include the following information:

  • Employee’s name;
  • Date(s) for which leave is requested;
  • Qualifying reason for the leave; and
  • Oral or written statement that the employee is unable to work because of the qualified reason.

Employees must also provide additional information specific to the qualifying reason for leave (see Reasons for Leave and Reason for Leave above), including:

  • If the employee is subject to a quarantine or isolation order, the name of the government entity that issued the order;
  • If the employee has been advised to self-quarantine due to COVID-19 concerns, the name of the health care provider who advised the employee;
  • If the employee is caring for someone else, the employee must provide the name of the government entity that issued the quarantine or isolation order affecting the individual, or the information of the health care provider who advised the individual to self-quarantine; or
  • If the employee is taking care of a child whose school is closed or childcare is unavailable due to COVID-19, then the employee must provide the name of the child being cared for, the name of the school, place of care or childcare provider that has closed, and a representation that no other suitable person will be caring for the child during the leave.

The regulation specifies that employers may also request additional materials as needed to support their requests for FFCRA tax credits and tells employers to consult recently released IRS tax credit guidance for more detail. Currently, the IRS guidance largely mirrors the employee information requirements listed above, with one difference related to caring for children whose school or day care is closed. In addition to the requirements described above, the IRS guidance also requires, with respect to the employee’s inability to work or telework because of a need to provide care for “a child older than 14 during daylight hours, a statement that special circumstances exist requiring the employee to provide care.”

The regulation states that employers may not require the employee’s notice include documentation beyond what’s allowed by the regulation (the items listed above). Thus, employers cannot require employees to provide notes from health care providers, copies of government orders or school closure notices, or other supplemental documentation.

CalChamber’s COVID-19-Related Paid Sick Leave or Family and Medical Leave (FFCRA) — Employee Notice includes all the above required information and the COVID-19-Related Paid Sick Leave or Family and Medical Leave (FFCRA) Documentation Checklist — For Employer Use Only will help guide you through the required documentation.

In order to obtain the FFCRA tax credits, the IRS requires some additional information from employers, including:

  • Documentation to show how the employer determined the amount of qualified sick and family leave wages paid to employees that are eligible for the credit, including records of work, telework, and qualified sick and family leave.
  • Documentation to show how the employer determined the amount of qualified health plan expenses that the employer allocated to wages.
  • Copies of any completed Forms 7200, Advance of Employer Credits Due To COVID-19, that the employer submitted to the IRS.
  • Copies of the completed Forms 941, Employer’s Quarterly Federal Tax Return, that the employer submitted to the IRS (or, for employers that use third party payers to meet their employment tax obligations, records of information provided to the third party payer regarding the employer’s entitlement to the credit claimed on Form 941).

Employers can read more about the FFCRA tax credit process on the IRS guidance page.

The new regulation requires employers to keep the above documentation for four years, regardless of whether the employee was granted leave or not.

Employers should develop a process for collecting the above information from employees and consult with legal counsel before denying leave under the new law.

Retroactivity

The FFCRA was not retroactive. It only applied to leave taken between April 1, 2020, and December 31, 2020. The DOL clarified that if employers gave employees paid leave prior to April 1, 2020, for circumstances that constitute a qualifying reason under new paid sick leave law, employers cannot count that toward the new paid sick leave requirements and deny them new paid sick leave — the law imposed a new leave requirement on employers that was effective April 1.

Intermittent Leave

DOL regulations state that, generally, employees may take paid sick leave or expanded family and medical leave intermittently (i.e., in separate periods of time, rather than one continuous period), provided the employer and employee agree. There are some limitations depending on the qualifying reason for leave and whether the employee is teleworking or reporting to their usual worksite.

Teleworking employees may take both the paid sick leave and expanded FMLA leave intermittently. Additionally, teleworking employees may take intermittent leave in any increment, provided the employer and employee agree on it.

If the employee still reports to their usual worksite, there’s less flexibility for intermittent leave. In that case, employees can only take paid sick leave intermittently for the qualifying reason of caring for a child whose school or place of care is closed, or childcare provider is unavailable due to COVID-19. If employees are taking paid sick leave for any of the other qualifying reasons, they must continue to use their leave until either the leave is exhausted or the qualifying reason is resolved. Employees coming to their usual worksite may also take emergency FMLA leave intermittently by agreement. The DOL is encouraging employers and employees to be collaborative and flexible under the circumstances.

  • A federal district court decision invalidated the portion of the regulation requiring employer consent to intermittent use of emergency PSL/FMLA leave. In response, the DOL revised its regulations, effective September 16, 2020, reaffirming that intermittent FFCRA leave is only available upon an employer’s consent, and it analogizes its FFCRA intermittent leave rule to longstanding FMLA principles that require employer consent for intermittent leave when FMLA isn’t taken for a medical reason. The DOL considers FFCRA intermittent leave to fall outside of leave taken for a medical reason. Thus, employer authorization for intermittent leave is appropriate.

For leave taken to care for a child whose school or place of care of closed, the DOL clarified that if a child’s school is closed for in person attendance and is conducting distance learning, then it is “closed” for purposes of the FFCRA and employees may eligible for leave. If, under those circumstances, the employee needs to take Monday, Wednesday, and Friday off, for example, to help with distance learning, then the employee may do so intermittently if the employer agrees.

However, according to DOL guidance, if the school is using a hybrid schedule and is only closed on Monday, Wednesday, and Friday, then “each day of closure or unavailability is a separate reason for leave, and thus [the employee] would not need to take leave for a single reason intermittently. As such, [the employee] would not need employer permission to take leave on just the days of closure or unavailability.”

Amount of Expanded Family and Medical Leave

The regulation clarifies that leave taken under the expanded FMLA provisions counts toward the 12 week overall total leave provided by FMLA because it is a type of FMLA leave. In other words, the expanded FMLA leave does not provide an additional 12 weeks of leave on top of what is provided under traditional FMLA. Thus, an employee’s eligibility for expanded FMLA leave depends on how much leave the employee has already taken during the 12-month period that the employer uses for FMLA.

For example, if an eligible employee took three weeks of FMLA leave for their own serious health condition in January 2020, the employee would have nine weeks of FMLA left. Assuming eligibility requirements are met, the employee could take up to nine weeks of expanded FMLA leave, rather than 12 weeks.

Worksite Closures

The DOL’s regulation made it clear in several places that employees could not take paid leave (either paid sick leave or expanded FMLA) where the employer did not have work for the employee.

The DOL clarified that if a worksite closed before the act’s effective date of April 1, 2020, for either lack of business or because of government order, employees that worked there are not entitled to leave under the act. If the worksite is closed after April 1 but before the individual requests leave, that person is not entitled to leave. If an employer closes a worksite while an employee is on leave, the employer must pay for all paid sick or emergency FMLA leave taken before the closure. Once closed, the employee is no longer entitled to leave benefits, but may be entitled to unemployment benefits.

The DOL also clarified that employees aren’t entitled to leave for hours they are no longer scheduled. So, for example, if an employee was working 40 hours per week and is reduced to 20 hours due to the employer’s lack of work for the employee, the employee cannot use paid sick leave or emergency FMLA for the hours they’re no longer scheduled to work, even if the reduction in available work is due to COVID-19.

  • In a legal challenge brought under the Administrative Procedure Act, a federal district court decision struck down this regulation provision, what the court referred to as the “work availability requirement,” because the DOL applied the work requirement unequally among the six qualifying reasons for leave under EPSL and, in general, the DOL failed to properly explain why work availability was a requirement for leave. In response, the DOL revised its regulations, effective September 16, 2020, reaffirming the work availability requirement for all six qualifying reasons for EPSL and adding further explanation for the requirement based on the language of the statute.

Small Business Exemption

The act’s small business exemption applied to employers with fewer than 50 employees and was available for both the emergency paid sick leave and expanded FMLA. It applied only to leave for the qualifying reason of caring for a child if their school or place of care is closed or their childcare provider is unavailable due to COVID-19, and not for any of the other qualifying reasons. To qualify for the exemption, small employers had to show that paying for the leave would, in the words of the law, “jeopardize the viability of the small business as a going concern.” The DOL’s regulation expanded on what that means, stating that a small business could claim the exemption if an authorized officer of the business determined that:

  1. The provision of paid sick leave or expanded family and medical leave would result in the small business’ expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
  2. The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the small business’ financial health or operational capabilities because of their specialized skills, knowledge of the business or responsibilities; or
  3. There are not sufficient workers who are able, willing and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.

To elect the small business exemption, an employer must document that a determination has been made as to the criteria listed above. The employer should not send the documentation to the DOL, rather it should retain the records in its files.

Health Care Provider Exemption

DOL regulations initially defined “health care provider” very broadly and focused on who the employer was. However, a federal district court decision invalidated the DOL’s definition, ruling that it was overbroad.

  • In response, the DOL revised the regulation, effective September 16, 2020, to focus on the skills, role, duties or capabilities of the employee rather than focusing on the employer’s identity.

The revised regulation states that “health care provider” means:

  • A doctor of medicine or osteopathy who is authorized to practice medicine or surgery (as appropriate) by the state in which the doctor practices;
  • Any person who is employed to provide diagnostic services, preventative services, treatment services or other services integrated with and necessary to the provision of patient care and, if not provided, would adversely impact patient care; and
  • Any other person determined by the Secretary of Health and Human Services to be capable of providing health care services.

Expiration of FFCRA

  • The FFCRA was effective from April 1, 2020, through December 31, 2020, at which point it expired. Congress declined to extend the FFCRA beyond its initial deadline. However, subsequent federal legislation extended the ability of employers to claim reimbursement tax credits for providing leave under the FFCRA through September 30, 2021. This means that while the FFCRA leave mandates have expired, employers may choose, at their discretion, to voluntarily provide employees with leave under the FFCRA and claim reimbursement tax credits for doing so through September 30, 2021.

The DOL updated its FFCRA guidance to address the act’s expiration, clarifying that employees who were entitled to FFCRA leave last year, but did not take any, are no longer entitled to take FFCRA leave, though the employer can voluntarily provide such leave. Additionally, the DOL made it clear that even though the leave entitlements have expired, it will maintain its enforcement authority and continue to enforce any violations that occurred between April 1, 2020, and December 31, 2020, for up to the three years.

Employers should consult with legal counsel with any questions about the optional provision of FFCRA leave up under the American Rescue Plan Act, the tax implications and potential interactions with other state laws and/or local ordinances.

For more information and resources related to COVID-19, please visit CalChamber’s COVID-19 resource page.

California COVID-19 Supplemental Paid Sick Leave

  • On March 19, 2021, the Governor signed SB 95, bringing back the state’s COVID-19 Supplemental Paid Sick Leave, with some big changes. SB 95 significantly expands employer coverage from the previous COVID-19 Supplemental Paid Sick Leave law, provides a fresh bank of leave and adds a number of qualifying reasons for which leave can be taken. The new law requires employers to start providing leave on March 29, 2021. It is retroactive to January 1, 2021 and expires on September 30, 2021.

Background

Last year, in order to fill the “gaps” left by the federal Families First Coronavirus Response Act (FFCRA), Governor Gavin Newsom signed Executive Order N-51-20, providing paid sick leave to food sector workers. Subsequently, AB 1867 was enacted in September 2020, codifying the order and extending paid sick leave requirements to employers with 500 or more employees (i.e., those not covered by the FFCRA).

AB 1867 was set to expire at the same time as the FFCRA. Since Congress opted not to extend the FFCRA mandates, both it and the state leave expired on December 31, 2020. Since then, the legislature has been working to fast track a new supplemental paid sick leave law through the budget process. Enter the freshly signed SB 95, a “budget bill” that went into effect immediately upon signing.

The new law is different from AB 1867 in a few ways. AB 1867 created two Labor Code sections, one providing leave for food sector workers and another providing leave for all other workers not covered by the FFCRA. SB 95 alters the framework, providing leave for most workers under a new Labor Code section 248.2 and creating a separate section, 248.3, for certain in-home supportive service providers.

SB 95 also significantly expands employer coverage from AB 1867 and adds several new qualifying reasons for which employees can take leave.

Covered Employers

The new supplemental paid sick leave applies to all employers with more than 25 employees, a dramatic expansion from AB 1867, which applied to employers with 500 or more employees.

It also separately covers in-home supportive service providers and waiver personal care service providers under Sections 14132.95, 14132.952, 14132.956 or 14132.97 of the Welfare and Institutions Code.

Employee Eligibility

SB 95 increases the number of qualifying reasons for which employees can take COVID-19 supplemental paid sick leave from those contained in AB 1867. Under SB 95, an employee may take paid sick leave if the individual is unable to work or telework because they are:

  1. Subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidelines of the State Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace. If the covered employee is subject to more than one of the foregoing, the covered employee shall be permitted to use COVID-19 supplemental paid sick leave for the minimum quarantine or isolation period under the order or guidelines that provides for the longest such minimum period.
  2. Advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  3. Attending an appointment to receive a vaccine for protection against contracting COVID-19.
  4. Experiencing symptoms related to a COVID-19 vaccine that prevent the employee from being able to work or telework.
  5. Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
  6. Caring for a family member who is subject to an order or guidelines described in qualifying reason No. 1, or who has been advised to self-quarantine, as described in reason No. 2.
  7. Caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Leave Amounts

Full-time employees are eligible for 80 hours of COVID-19 supplemental paid sick leave. “Full-time” means the employee was either scheduled to work 40 hours per week or worked, on average, at least 40 hours per week during two weeks prior to taking leave.

Part-time employees are eligible for an amount of leave equal to the number of hours they’re normally scheduled to work in two weeks. If an employee works a varying schedule, they’re entitled to hours equal to 14 times the average number of hours the employee worked each day in the prior six months, or over the total time of employment if less than six months.

The law contains a special provision for firefighters. Firefighters scheduled to work more than 80 hours in the two weeks prior to taking leave are entitled to the total number of hours they were scheduled to work in those two weeks.

The Labor Commissioner published updated COVID-19 Supplemental Paid Sick Leave FAQs providing examples of leave calculations in various scenarios (See FAQs 12-14).

Rate of Pay

The rate of pay under SB 95 differs from the methodology of AB 1867.

For nonexempt employees, employers must pay the highest of the following rates:

  • Rate calculated in the same manner as the regular rate of pay for the workweek in which the employee uses COVID-19 supplemental paid sick leave, whether or not the employee actually works overtime in that workweek.
  • Rate calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
  • The state minimum wage.
  • The local minimum wage to which the employee is entitled.

For exempt employees, the rate of pay must be calculated in the same manner that the employer calculates wages for other forms of paid leave.

The amount of pay is capped at $511 per day and $5,110 total per employee.

Interactions with Other Leaves

SB 95 provides a fresh bank of paid leave, in addition to already existing paid sick leave under California’s Healthy Workplaces Healthy Families Act, Labor Code section 246. Employers cannot require an employee to use other paid or unpaid leaves before the employee uses COVID-19 supplemental paid sick leave.

The law specifically addresses Cal/OSHA’s COVID-19 Emergency Temporary Standard that went into effect at the end of November 2020. SB 95 states that in order for employers to comply with the standard’s requirement to maintain the earnings of employees who are exposed to COVID-19 and excluded from the workplace (also referred to as exclusion pay), employers may require an employee to first exhaust their COVID-19 supplemental paid sick leave.

The law also contains an offset provision that states if an employer has already provided a covered worker with supplemental paid leave after January 1, 2021 for any of the qualifying reasons included in this law, and the amount is equal to or greater than that required by this law, then the employer may count the hours of the other paid benefit or leave towards the new requirements.

For example, if an employer provided 40 hours of COVID-19-related paid sick leave in February 2021 pursuant to a local COVID-19 ordinance, those 40 hours would count towards the new state supplemental paid sick leave requirement so long as the reason for leave overlaps with the new law and the amount paid is at least the same rate of pay required by the new law.

Because SB 95 provides a fresh bank of leave, any leave granted last year under AB 1867 or the FFCRA does not count towards the new leave obligations.

Notice Requirements

Employers are required to provide notice to their employees informing them of their rights to supplemental paid sick leave under the new law. The Labor Commissioner created a model notice employers may use for this purpose. Employers may download the posters and distribute as appropriate, including sending the notice electronically to employees who are telecommuting. Employers need to provide notice before March 29, 2021.

Additionally, the COVID-19 supplemental paid sick leave must be reflected on employees’ wage statements. The new law specifies that the COVID-19 supplemental paid sick leave must be set forth separately from other paid sick days. For employees with part-time or variable schedules, the law allows employers to do an initial calculation of leave time available with the notation “variable” next to it. Employers must still provide updated calculations when employees request to use their COVID-19 supplemental paid sick leave.

Effective Dates and Retroactivity

As a “budget bill,” the law took effect when it was signed on March 19, 2021, but it provides a ten-day grace period, meaning employers must start providing leave on March 29, 2021.

The bill states that the law applies “retroactively to January 1, 2021” in order to “protect the economic well-being of covered employees who took leave” after the expiration of the FFCRA and AB 1867. As such, employers will have to make retroactive payments for leave taken for any of the qualifying reasons between January 1, 2021 and March 28, 2021.

The bill specifies that employees must initiate a retroactive payment by submitting an oral or written request for any leave taken on or after January 1, 2021 for any of the qualifying reasons listed above and for which the employer did not compensate the employee in an amount equal or greater to that required by this law. For example, if an employee took unpaid time off to receive a COVID-19 vaccine in February and/or was unable to work due to vaccine symptoms, the employee could make an oral or written request to the employer to be paid for that time off in February because those are qualifying reasons for taking COVID-19 supplemental paid sick leave. The Labor Commissioner’s guidance on the new law clarifies that the employee must make the oral or written request on or after March 29, 2021 when the leave mandate begins.

Retroactive payments will count towards the total COVID-19 supplemental paid sick leave required by this law. The payment must be paid on or before the payday for the next full pay period after the oral or written request by the employee and must be reflected on the applicable wage statement.

The new California COVID-19 supplemental paid sick leave expires on September 30, 2021. Like AB 1867, workers taking supplemental paid sick leave as of its expiration on September 30, 2021, may continue to take the leave they are entitled to even if the leave extends past that date. For example, an employee with 80 hours of supplemental paid sick leave available that was symptomatic and recommended to isolate on September 28, 2021, may continue to use the supplemental leave they were entitled to even if it extends past September 30, 2021.

This expansive new leave mandate for employers could be costly and administratively burdensome, particularly when it comes to the retroactive component. Employers should consult with legal counsel on implementing this new leave requirement, which begins March 29, 2021, as well as potential interactions with other laws and ordinances. Employers may be able to take advantage of the new federal extension of FFCRA tax credits discussed above, but the voluntary extension of FFCRA comes with its own issues to consider with the help of legal counsel.

Employers should review and continue to monitor the Labor Commissioner’s COVID-19 Supplemental Paid Sick Leave FAQs for updated guidance on the new leave.

Local Ordinances

  • Numerous cities and counties have passed their own emergency ordinances that require paid leave for COVID-19 related reasons.

Most of the local ordinances were designed to cover employers not already covered by the FFCRA and each local ordinance has some similarities with the FFCRA requirements. However, each ordinance is unique from the others. Some local paid leave requirements were tied to the FFCRA expiration as the state law was, but others continue to require paid leave well into 2021. Employers should check to see if the cities or counties employees work within have enacted emergency ordinances requiring COVID-19-related leaves of absence and should consult with legal counsel regarding their obligations.

  • Visit HRCalifornia’s Local Ordinances section for detailed information on local employment-related ordinances in California, including COVID-19-related ordinances.

1.29 C.F.R. sec. 826.21

2.29 C.F.R. sec. 826.22

3.29 C.F.R. sec. 826.25

4.29 C.F.R. sec. 826.24

5.29 C.F.R. sec 826.24(c)