California Extends COVID-19 Supplemental Paid Sick Leave Through 2022, Makes Small Amendment And Offers Grants For Smaller Employers – Employee Benefits & Compensation

On September 29, 2022, California’s governor signed Assembly Bill (AB) 152, which immediately
extends the obligation of employers with 26 or more employees to
provide COVID-19 supplemental paid sick leave (“CA 2022
SPSL”) through December 31, 2022, amends standards for when
employees use CA 2022 SPSL because they test positive for COVID-19,
and creates the California Small Business and Nonprofit COVID-19
Supplemental Paid Sick Leave Relief Grant Program.

CA 2022 SPSL Extension: Originally, California
Labor Code sections 248.6 and 248.7 required covered employers to
provide CA 2022 SPSL through September 30, 2022. Of importance, the
new three-month extension does not require a new bank of
leave. Instead, the potentially up to 80 hours of CA 2022 SPSL that
employees could have used between January 1, 2022 and the original
expiration date must continue to be available through the remainder
of 2022 (and possibly slightly beyond 2022 if an employee begins a
covered absence at the end of 2022 that continues, uninterrupted,
into 2023). Accordingly, if employees have used all their available
CA 2022 SPSL hours before October 1, 2022, and experience another
qualifying absence sometime between October and year-end, they will
need to use another pay or wage replacement benefit (e.g.,
non-COVID paid sick leave, vacation, California Disability
Insurance) to receive payment and/or other leave laws (or
leave-related provisions) for job protections to attach to the
absence (e.g., Healthy Workplaces Healthy Families Act,
California Family Rights Act, or Cal-OSHA COVID-19 Prevention
Emergency Temporary Standards).

Conversely, if employees have not used any, or have used only a
portion, of their 2022 CA SPSL, they will have access to this paid
leave for the remainder of 2022 if they experience a qualifying
need for leave. The extension is relevant not only for state law
purposes, but also for employers with 100 or more employees
worldwide who must comply with San Francisco’s permanent Public Health Emergency Leave
Ordinance (“SF PHELO”) that takes effect on October
1, 2022. Under SF PHELO, employers will be able to count any CA
2022 SPSL an employee uses between October 1 and December 31, 2022
against their obligation to provide potentially up to 40 hours of
public health emergency leave during that time period.

On a related note, employers should remember that additional
local SPSL ordinances remain in effect in Long Beach, the City of
Los Angeles, unincorporated Los Angeles County, and Oakland. As a
result, they may also need to contend with compliance obligations
under those local laws.

CA 2022 SPSL Amendments: Currently, if an
employee uses CA 2022 SPSL because they test positive for COVID-19
– from their “COVID-positive” bank if an employer
uses a two-bank setup or generally if the employer uses a
single-bank setup – an employer can require the employee to
take a diagnostic test on or after the fifth day after the initial
test and provide documentation of those results. As amended, the
law additionally provides that, “[i]f the diagnostic test is
positive, the employer may also require the employee to submit to a
second diagnostic test within no less than 24 hours.”

Currently, state law says employers need not provide CA 2022
SPSL if an employee refuses an employer’s request to provide
documentation of the test results. As amended, employers can also
deny CA 2022 SPSL to an employee who refuses to submit to a
diagnostic test.

Grants for Small Employers Providing CA 2022
SPSL: Under AB 152, certain private employers and
registered non-profits that began operating before June 1, 2021,
are currently active and operating, with a physical presence in
California and 26 to 49 employees may be eligible for a
grant of up to $50,000 to cover the actual costs incurred for
providing CA 2022 SPSL. Moreover, any grant they receive will
not count as “gross income” for state
tax purposes. Keep in mind that there are exceptions concerning
which entities the law considers a “qualified small business
or nonprofit.”

Next Steps: Given the extension of CA 2022 SPSL
to year’s end, any plan to wind down a “bonus” COVID
paid leave program needs to be revisited for an employer’s
California operations. Additionally, covered employers should
consider what effect, if any, the CA 2022 SPSL extension and/or
“positive test” amendments have on their existing COVID
paid leave policies and procedures. Further, smaller employers and
non-profits might want to consult knowledge tax counsel about
whether they qualify for the new grant and how a grant could affect
their federal taxes. Finally, covered employers should continue to
monitor the CA 2022 SPSL FAQs from California’s
Division of Labor Standards Enforcement for updates.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.