Update: California Governor Signs SB 114 to Reinstate COVID-19 Supplemental Paid Sick Leave

The California State Legislature Senate Bill 114, signed by Governor Newsom on February 9, requires employers with 26 or more employees to provide up to 80 hours of supplemental paid sick leave for qualifying COVID-19 related reasons. Although the law is similar to Senate Bill 95, which expired on September 30, 2021, there are some significant differences.

On February 18, the Division of Labor Standards Enforcement published FAQs providing further guidance on employer obligations under this law. Morgan Lewis previously reported on Assembly Bill 84 in a prior LawFlash.[1]

Effective Dates

SB 114 takes effect on February 19, 2022, 10 days after Governor Newsom signed the bill on February 9, 2022. However, as drafted, it is retroactive to January 1, 2022, and it is set to expire on September 30, 2022.

Covered Employers, Employees, and Family Members

Like Senate Bill (SB) 95, SB 114 applies to employers with 26 or more employees. SB 114 applies to all employees who are unable to work or telework due to a qualifying COVID-19 related reason. Additionally, it allows employees to use leave to care for family members, which it defines as including children, parents, spouses, registered domestic partners, grandparents, grandchildren, and siblings.

Amount of Leave

Similar to SB 95, SB 114 provides employees with a total of up to 80 hours of COVID-19 supplemental paid sick leave (CSPSL). However, SB 95 and SB 114 differ in the way they allocate CSPSL. SB 95 provided up to 80 hours of CSPSL in a single batch. SB 114, on the other hand, provides CSPSL in two batches—each batch permitting up to 40 hours of CSPSL. Under SB 114, the following applies for each batch:

• Full-time employees, those considered full-time by the employer, or those who worked or were scheduled to work, on average, at least 40 hours per week in the two weeks preceding the date the employee takes CSPSL are entitled to 40 hours of CSPSL.
• Part-time employees with fixed weekly schedules are entitled to the total number of hours normally scheduled for one week, not to exceed 40 hours.
• Part-time employees on variable schedules are entitled to seven times the average number of hours worked each day in the six months preceding the date the employee takes CSPSL, not to exceed 40 hours. If the employee has worked for the employer for less than six months, the total length of their employment is used, unless the employee has been employed for seven days or less. In that case, the total number of hours worked is used.

Batch No. 1 – Reasons for Leave

SB 114 allows employees to use their first batch of up to 40 hours of CSPSL if they are unable to work or telework for the following reasons:

• They are subject to a quarantine or isolation period related to COVID-19 as defined by an order or guidance of the State Department of Public Health, the federal Centers for Disease Control and Prevention (CDC), or a local public health officer who has jurisdiction over the workplace.
• They have been advised by a healthcare provider to isolate or quarantine due to COVID-19.
• They are experiencing symptoms of COVID-19 and seeking a medical diagnosis.
• They are caring for a family member who is subject to a CDC, state, or local public health order or guidance, or who has been advised by a health care provider to isolate or quarantine.
• They are caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

Employees may also use their first batch of CSPSL if:

• They are attending an appointment for themselves or a family member to receive a vaccine or a vaccine booster for protection against COVID-19.
• They are experiencing symptoms or caring for a family member experiencing symptoms related to a COVID-19 vaccine or vaccine booster that prevents them from working or teleworking.

Employees may be limited to 24 hours of CSPSL for the vaccine-related reasons listed directly above unless they provide medical certification requesting additional time. This limitation applies for each vaccine or booster shot.

Batch No. 2 – Reasons for Leave

An employee may qualify for a second batch of up to 40 hours of CSPSL if they test positive for COVID-19 or are caring for a family member who tested positive. Employers may require the employee to provide documentation of the positive test result. Additionally, if an employee requests this second batch of CSPSL for their own illness, their employer may require testing on day five after the initial positive test. Employers must make such tests available to employees at no cost. Additionally, if an employee is caring for a family member and requests this second batch of CSPSL, their employer may also require that the employee produce the family member’s positive test result.

Employees do not need to exhaust all CSPSL from Batch No. 1 before using CSPSL from Batch No. 2.

Rate of Pay

Unlike SB 95, SB 114’s prescribed method of rate of pay calculations aligns with the rate of pay calculations under California’s Healthy Workplaces, Healthy Families Act (HWHFA). As such, SB 114 requires that employers pay non-exempt employees by either:

• using the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek; or
• dividing the employee’s total wages, not including overtime premium pay, by the employee’s total non-overtime hours worked in the full pay periods occurring within the prior 90 days of employment—provided that (for nonexempt employees paid by piece rate, commission, or another method that uses all hours to determine the regular rate of pay) total wages, not including overtime premium pay, must be divided by all hours to determine the correct amount of CSPSL.

For exempt employees, SB 114 requires that employers calculate CSPSL payments in the same manner they calculate wages for other forms of paid leave time.

Similar to SB 95, SB 114 caps CSPSL at $511 per day or $5,110 in the aggregate.[2] Employees who have reached these caps are permitted to use other available paid leave (e.g., paid vacation, paid time off, or regular paid sick leave), provided that the terms of the policies allow for the use of leave under such circumstances, to ensure that they receive full compensation for the leave taken. However, employers cannot force the use of these other available paid leaves. CSPSL payments must be made no later than the payday for the next regular payroll period after the leave was taken.

Interaction with Other Leaves

As with SB 95, CSPSL under SB 114 is in addition to any “regular” paid sick leave required under California’s HWHFA. Additionally, an employer cannot require employees to use any other paid or unpaid leave, paid time off, or vacation time before using, or in lieu of using, CSPSL.

Employers who provide supplemental paid leave (beyond regular paid sick leave, vacation time, etc.) for time off taken on or after January 1, 2022 may count those hours towards the required amount of CSPSL if the supplemental paid leave policy meets the following requirements:

• The leave is payable for the reasons for leave provided under SB 114.
• The compensation for those hours is equal to or greater than the compensation the employee would have received under SB 114.

This may include supplemental paid sick leave provided pursuant to a local or federal law providing paid leave for the same reasons as SB 114.

Posting and Wage Statement Requirements

Similar to SB 95, SB 114 has posting and wage statement requirements. Employers must conspicuously display this model poster in their workplaces, and if employees do not frequent a workplace, employers can distribute this poster electronically (e.g., by email).

Significantly, SB 114’s wage statement requirement is different than what was required under SB 95 and mandates that employers provide employees with written notice, either through a wage statement or a separate writing provided on the designated pay date with the employee’s payment of wages, that sets forth the amount of CSPSL an employee has “used” (reporting “zero hours” until an employee uses CSPSL). 

Cal/OSHA Exclusion Pay

The final significant differentiator between SB 95 and SB 114 involves the Division of Occupational Safety and Health’s (Cal/OSHA) COVID-19 Emergency Temporary Standards (ETS) exclusion pay. Cal/OSHA’s ETS requires that employers provide employees excluded from work due to a workplace COVID-19 exposure with exclusion pay under certain circumstances. Previously, employers were permitted to require that employees use their CSPSL before collecting exclusion pay. Under SB 114, however, employers are prohibited from requiring the exhaustion of CSPSL before the collection of exclusion pay.

Prohibitions, Penalties, and Enforcement

As with SB 95, SB 114 incorporates existing HWHFA restrictions, including a prohibition on requiring that employees find a replacement worker to cover the days they use leave, a prohibition on retaliation, and a rebuttable presumption of retaliation if an employer denies an employee the right to use leave, discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against an employee within 30 days 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.

SB 114 generally includes the same penalties and enforcement provisions as SB 95, including a $4,000 aggregate administrative penalty cap and relief, such as reinstatement, back pay, payment of leave withheld, and payment of an additional sum.

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Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Los Angeles
Jacqueline C. Aguilera

Orange County
Barbara J. Miller

Silicon Valley
Alicia J. Farquhar