After a brief reprieve, it’s back– What employers need to know about California’s 2022 COVID-19 Supplemental Paid Sick Leave

On Feb. 9, 2022, California Governor Gavin Newsom signed a new COVID-19 supplemental paid sick leave bill (2022 SPSL). This law takes effect Feb. 19, 2022. The 2022 SPSL is retroactive to Jan. 1, 2022, and is set to expire Sept. 30, 2022. While the 2022 law is similar to California’s 2021 COVID-19 SPSL (opens a new window) in many respects, there are a few differences. These are identified below in greater detail, but the key changes include:

  • The 2022 SPSL is now in two “buckets” for different uses each with up to 40 hours of SPSL for full-time employees

  • Employers are no longer allowed to require employees to first use and exhaust the 2022 SPSL before receiving “exclusion pay” under the Cal/OSHA Emergency Temporary Standard (ETS)

  • The 2022 SPSL paystub aspect of the law requires employers to identify the amount of the 2022 SPSL the employee has used through the applicable pay period rather than list the available remaining hours

The California Labor Commissioner will provide additional guidance and resources related to the 2022 SPSL including FAQs and the mandatory posting. Check here (opens a new window) for updates. We anticipate these will be available on or before Feb. 17.

Additional details regarding the 2022 SPSL as well as recommended steps covered employers should take now are below.

Which employers are covered by the 2022 SPSL?

California employers with more than 25 employees are required to provide the 2022 SPSL. Small businesses with 25 and fewer employees are exempt from this California law but may be covered by local paid sick leave ordinances. See this chart (opens a new window)for details on other COVID-19 related paid leave laws.

Lockton comment: As in 2021, the employee count is based on the number of employees nationwide. An employer with a single California employee but 25 or more additional employees nationwide, must provide the 2022 SPSL to the California employee.

When does the law begin?

The 2022 SPSL is effective Feb. 19, 2022, but it provides SPSL retroactively to Jan. 1, 2022, and extends through Sept. 30, 2022. Employees who had an unpaid absence related to COVID-19 on or after Jan. 1, 2022, to present may be entitled to up to 80 hours of retroactive SPSL for that absence. See below for information regarding covered reasons for the 2022 SPSL.

Who is a covered employee?

Just as in 2021, the 2022 SPSL provides that an employee who is unable to work or telework for a qualifying reason is a covered employee for purposes of the law. There is no length of service requirement to be eligible for SPSL. Independent contractors are not covered.

When can a covered employee take SPSL?

The new law allows covered employees to use 2022 SPSL when they are unable to work or telework in the following circumstances:

  • Caring for oneself: When the covered employee is subject to a quarantine or isolation period related to COVID-19, has been advised by a healthcare provider (HCP) to isolate or quarantine due to concerns related to COVID-19, or is experiencing symptoms of COVID-19 and seeking a medical diagnosis.

  • Caring for a family member: The covered employee is caring for a family member who is subject to a quarantine or isolation period related to COVID-19 or has been advised by an HCP to quarantine due to COVID-19, or the covered employee is caring for a child whose school or place of care is closed or otherwise unavailable for reasons related to COVID-19 on the premises.

  • COVID-19 vaccine-related: The covered employee is attending an appointment for themselves or a family member to receive a COVID-19 vaccine or booster, or the employee is experiencing symptoms related to a COVID-19 vaccine or booster, or is caring for a family member experiencing symptoms related to a COVID-19 vaccine or booster, that prevents the employee from being able to work or telework.

There are limitations on how much time can be taken related to a COVID-19 vaccine or booster. For each vaccination or booster, an employer may limit the total SPSL to three days or 24 hours unless the employee provides verification from an HCP that the employee or their family member is continuing to experience symptoms related to a COVID-19 vaccine or booster. This three-day/24-hour time limit includes any time used by the employee to get the vaccine or booster.

A ”family member” means a parent, child, spouse, registered domestic partner, grandparent, grandchild and sibling.

Lockton comment: The quarantine or isolation period related to COVID-19 must be defined by an order or guidelines from the California Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer with jurisdiction over the workplace. An employee subject to more than one quarantine or isolation order is entitled to use 2022 SPSL for the order with the longest minimum period of quarantine or isolation.

How much 2022 SPSL is available to a covered employee?

The new law is unlike its predecessor in that are two separate “buckets” of leave available for different purposes which combine to potentially provide a maximum of 80 hours of SPSL to full-time employees.

The first “bucket” of 2022 SPSL A covered employee is entitled to 40 hours of 2022 SPSL if the employee works full-time or the employee worked or was scheduled to work, on average, at least 40 hours per week in the two weeks preceding the date of the SPSL. Firefighters are subject to different rules. Employees working less than full-time receive 2022 SPSL as follows:

  • Employees with a normal weekly schedule are entitled to the total number of hours normally scheduled to work for the employer over one week

  • Employees with a variable number of hours are entitled to seven-times the average number of hours worked each day for the employer in the six months preceding the date the covered employee took SPSL (or if employed less than six months but more than seven days, use the daily average over the entire period the employee has worked for the employer)

  • Employees with a variable schedule and who have worked seven days or less are entitled to the total number of hours worked for the employer as of the date the covered employee took SPSL

The second “bucket” of 2022 SPSL

A covered employee is also entitled to additional SPSL in an amount not to exceed the amount the employee is eligible for from the first “bucket” (e.g., 40 hours if full-time) if the covered employee or a family member for whom the covered employee is providing care tests positive for COVID-19 and provides documentation of the positive test result.

If the employee tested positive, the employer may require the employee to submit to a diagnostic test (at the employer’s expense) on or after the fifth day after the initial positive test was taken. The employee must provide documentation of the test results.

If the employee seeks additional leave because a family member for whom they care for tests positive for COVID-19, the employer may require that the employee provide documentation of that family member’s test results before paying the additional leave.

An employer is not required to provide SPSL from this “bucket” for an employee who refuses to provide documentation of the test results.

An employee does not need to exhaust the leave identified in the first “bucket” before seeking to use this “bucket” of leave.

Lockton comment: An employee who tests positive for COVID-19 may choose to use the 2022 SPSL that requires proof of a positive COVID-19 test result (the second “bucket”) before using the more “general” bucket of leave (the first “bucket”) that can be used to care for someone in isolation, child care closure or vaccine-related illness. There are simply two separate banks of leave – one requires a positive COVID-19 test result and the other does not.

Can the employer decide whether and to what extent a covered employee can use the 2022 SPSL?

No. Only the employee can determine whether to use the 2022 SPSL and how many hours to use subject to the employee’s maximum allotment (up to 80 hours for full-time employees). This 2022 SPSL is in addition to any paid sick leave required under California paid sick leave law.

An employer cannot require a covered employee to use any other paid or unpaid leave, paid time off or vacation time provided by the employer before the covered employee uses the 2022 SPSL or in lieu of the 2022 SPSL.

Employers must make the 2022 SPSL available to covered employees for immediate use upon the oral or written request of the covered employee to the employer.

How does the 2022 SPSL interact with Cal/OSHA exclusion pay under the Emergency Temporary Standards (ETS)?

The new 2022 SPSL differs from the 2021 version in a major way with respect to the “exclusion pay” requirement under the Cal/OSHA ETS. The new law expressly states:

“An employer shall not require a covered employee to first exhaust their COVID-19 supplemental paid sick leave under this section before satisfying any requirement to provide paid leave for reasons related to COVID-19 under any Cal-OSHA COVID-19 Emergency Temporary Standards.”

Lockton comment: As further guidance on this topic is released, we recommend that you check the California Labor Commissioner’s webpage (opens a new window) and the Cal/OSHA ETS FAQs (opens a new window) for updated information on this subject.

At what rate of pay are employees compensated at for the 2022 SPSL?

The 2022 SPSL simplifies the rate of pay calculation. The law is now consistent with California’s regular paid sick leave under Labor Code Section 246 and requires employers to pay nonexempt covered employees by one of the following methods:

  • 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

  • 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 other method that uses all hours to determine the regular rate of pay, total wages, not including overtime premium pay, shall be divided by all hours, to determine the correct amount of 2022 SPSL

For exempt covered employees, the 2022 SPSL is calculated in the same manner as the employer calculates wages for other forms of paid leave time.

For all covered employees, pay is capped at $511 per day and $5,110 in the aggregate for 2022 SPSL absent federal legislation increasing these amounts.

What if an employer provided paid leave to a covered employee with a COVID-19 related absence after Jan. 1, 2022, and before Feb. 19, 2022?

If the covered employee was compensated in an amount equal to or greater than the amount of compensation for the 2022 SPSL, then the employer may count the hours of the other paid benefit or leave towards the total number of hours of the 2022 SPSL that the employer is required to provide. This includes paid leave provided by the employer pursuant to any federal or local law in effect or that became effective on or after Jan. 1, 2022, if the paid leave is provided to the covered employee under that law for any of the reasons the 2022 SPSL can be taken. Note that this must be a supplemental benefit, so paid leave used under the California Healthy Workplaces, Healthy Families Act or the Paid Sick and Safe Time law would not qualify to offset the 2022 SPSL obligation.

What if a covered employee now requests pay for a COVID-19 related absence that occurred on or after Jan. 1, 2022, and before Feb. 19, 2022?

If a covered employee was absent on or after Jan. 1, 2022, for a reason covered by the 2022 SPSL and the employer did not compensate the covered employee in an amount equal to or greater than the amount of the 2022 SPSL, then upon the oral or written request of the employee, the employer must retroactively pay the employee. A retroactive payment does count toward the total number of 2022 SPSL hours the employee is entitled to. The employer must make this retroactive payment or before the payday for the next full pay period following the employee’s oral or written request. The retroactive payment must be reflected on the wage statement or a separate writing as well.

Lockton comment: Based on the guidance from the Labor Commissioner related to the 2021 SPSL, we recommend that employers review the FAQs once published. The guidance for 2021 made it clear that any request by an employee for compensation for a reason that would qualify for SPSL made before the law’s effective date did not trigger a duty to pay retroactively. If that is true for the 2022 SPSL, employees must make a request on or after Feb. 19, 2022, to trigger the duty to make a retroactive payment. Again, this should be confirmed through the forthcoming guidance from the Labor Commissioner that will be available on this webpage. (opens a new window)

Are there any notice requirements related to the 2022 SPSL?

Yes. The Labor Commissioner is tasked with making a model notice publicly available by Feb. 17. Covered employers are required to post this notice in a conspicuous place in the workplace. If employees are not physically present in the workplace, the poster may be disseminated electronically, such as via email.

Are there any pay stub requirements related to the 2022 SPSL?

Yes. The 2022 SPSL requires employers to identify the amount of the 2022 SPSL the employee has taken through the applicable pay period either on the employee’s wage statement or a separate writing provided to the employee each payday. The 2022 SPSL must be separately tracked from other paid sick leave. This notice requirement goes into effect the first full pay period following Feb. 19, 2022.

Lockton comment: It is noteworthy that this requirement differs from the 2021 SPSL. Until an employee utilizes the 2022 SPSL, the pay stub will reflect zero hours for the line item “2022 SPSL.”

Conclusion

With the Feb. 19, 2022, effective date just around the corner, we recommend that employers take the following steps:

  • Determine whether you can add the 2022 SPSL usage reference (e.g., zero hours for the first pay statement following the effective date absent a retroactive payment) to the pay stub or whether an additional written statement with this information will be provided to employees with their pay statement.

  • Determine which employees may potentially be eligible for a retroactive payment and be prepared to address their requests for payment.

  • Post the notice issued by the Labor Commissioner once made available in a conspicuous place in the workplace and distribute it via email (or other method) for remote employees.

  • Develop a process for handling requests for the 2022 SPSL including educating HR and/or management on what type of documentation can be requested from employees and when.

Lockton will continue to monitor developments in this area. Please contact your Lockton account team with your specific questions.

Download alert (opens a new window)Not legal advice: Nothing in this alert should be construed as legal advice. Lockton may not be considered your legal counsel, and communications with Lockton's HR Compliance Consulting group are not privileged under the attorney-client privilege.