Adding Paid Sick Leave, Including Supplemental COVID-19 PSL to the Paycheck Stub
Written By Doug Larsen
PSL Benefits. Almost every California employee is entitled to 24 hours or three days of PSL annually. Effective on March 29, 2021 the state of California has required employers of more than 25 employees to provide up to 10 days or 80 hours of Supplemental COVID-19 PSL. This supplemental benefit expires September 30, 2021.
Conditions for Supplemental PSL. Supplemental PSL is available if the employee is not able to work because (s)he:
1) is subject to a COVID-19 quarantine or isolation order,
2) has been advised to self-quarantine,
3) is attending an appointment to receive a vaccine,
4) is experiencing symptoms due to a vaccine,
5) is experiencing COVID-19 symptoms and is seeking a medical diagnosis,
6) is caring for a family member who is quarantining, or
7) if a child’s school or place of care is closed.
Required Notice. The law requires an employer to provide written notice of PSL or Supplemental PSL that is available to each employee. Notice must be provided each payday on the itemized wage statement (paycheck stub) or on a separate writing included with each paycheck.
Many employers don’t understand the liability that is incurred in the event the available PSL or available Supplemental PSL is not included on the paycheck stub or on a separate writing with the paycheck.
Liability for Failure to Provide Notice. Per Labor Code § 248.5(b)(1), the Labor Commissioner may order “the payment of an additional sum in the form of an administrative penalty to an employee” whose rights are violated as a result of a violation of the Healthy Workplaces, Healthy Families Act.
Labor Code 248.5(b)(3) describes this administrative penalty. If the employer’s violation of the Act results in harm to the employee or results in a violation of the rights of an employee, the administrative penalty is $50 per day not to exceed $4,000 per employee. The penalty is paid to the employee.
In a hearing in which I (Doug Larsen) participated, the Hearing Officer in a hearing before the Labor Commissioner issued an award on behalf of an employee whose paycheck stubs did not include available PSL. The employee made it clear that he was never sick, that he never sought sick leave, and that he did not ask how much sick leave was available to him. He did not care.
Nevertheless, the Hearing Officer wrote, “Defendant did admit Plaintiff was not provided written notice of available sick leave hours, therefore, Plaintiff is entitled to recover $4,000.00 pursuant to Labor Code section 248.5(b)(3) for other harm or violation of sick leave provisions.”
A seemingly harmless error resulted in a $4,000 penalty. Consider the employer with 26 employees who fails to include available Supplemental PSL on the paycheck stub. The penalty is $104,000.
Conclusion. It is critical for employers to understand and to comply with each of the wage and hour provisions imposed under California law. California has adopted a draconian system of enforcing minor violations of the law, even those violations that do not result in actual harm to an employee. I recommend that employers undergo an audit of their wage and hour practices. While the process is time-consuming and expensive, an audit is dwarfed by the substantial liability for damages, statutory damages, civil penalties and attorneys’ fees that can be imposed for a violation of the law.
COVID-19: Navigating the (Slow) Return to Normal
In Fresno County and surrounding areas, we’re seeing encouraging signs of a return to mostly-normal life. Vaccinations are ongoing, and the decrease in COVID cases has brought us into the state’s Orange Tier for the first time.
While we’re all thankful for these steps in the right direction, there continue to be questions about the interplay of state/local regulations and federal guidance.
Below is a brief list of FAQs based on recent client inquiries.
Q: I heard about a White House announcement concerning new tax credits…are there new incentives for paid time off when employees receive COVID-19 vaccinations?
A: Effective March 29, 2021, the American Rescue Plan Act (ARPA) extended employers’ ability to receive payroll tax credits for Emergency Paid Sick Leave (EPSL) payments to employees through September 30. The Act also added two new qualifying reasons for using EPSL: time off work to receive a COVID-19 vaccination, and recovering from vaccination symptoms/side effects. Strangely, almost a month later, President Biden has made an announcement about tax credit incentives for employees to be vaccinated. A variety of media sources are reporting this as breaking news, but there are no new tax credits or incentives at this time. If your company is paying EPSL (or state Supplemental Paid Sick Leave) when employees have a qualifying reason for time off, including receiving vaccinations, you’re already on the right track.
Q: I had to lay off several people due to the shut-downs last year. Now that I am ready to hire more employees, are there any rules to be aware of?
A: On April 16, 2021, Governor Newsom signed Senate Bill 93, which gives specific rehire and retention requirements for certain types of businesses. Covered employers include: hotels, private clubs, airport hospitality operations and service providers, and employers that provide commercial janitorial, maintenance, or security services. Under the law, within five business days of establishing an open position, an employer must provide a written job offer to all qualified employees who had been laid off due to COVID-19. The former employee(s) must be given five business days to respond. If multiple people respond to offers for a single position, the person who had the most seniority with the company must be given preference for rehire. Employees who had been terminated for disciplinary reasons, as opposed to a COVID-related layoff, do not need to be included.
If your company is covered by this new law, please contact one of our Consultants with any questions you have.
Q: The CDC says that fully-vaccinated people can gather without masks and do not have to quarantine after a COVID-19 exposure. If everyone in our office is vaccinated, can we reduce or eliminate our COVID safety protocols?
A: The CDC provides non-binding recommendations to individuals, which is very different from the regulations imposed by our state and local government agencies. The requirements to conduct daily health screenings, wear face coverings when within six feet of others, and exclude exposed employees from work are set forth by County Public Health Departments and Cal/OSHA, and have not yet been rescinded. On a similar note, the Fresno County Board of Supervisors announced the end of its local emergency order, but this is a largely symbolic effort that has no impact on employers’ required safety measures. These agencies take the CDC guidance seriously, and we hope to see a ripple effect of lifted regulations over time. But employers are wise to stay patient and avoid costly violations until we see official regulatory changes.
Q: I read about a notice that must be given to employees regarding federal COBRA subsidies. Am I supposed to post that with my Labor Law posters or include it in my onboarding materials?
A: The American Rescue Plan Act also includes a 100% COBRA subsidy for employees who lost health care coverage due to an involuntary termination or a reduction in hours. Eligible individuals can receive subsidized coverage from April 1 through September 30, 2021. The U.S. Department of Labor issued a requirement to notify qualified beneficiaries no later than May 31, 2021, and provided a model notice that may be used. If your company uses a third party administrator for COBRA elections, we suggest checking to be sure they are providing notice to all potentially eligible individuals. You may also include the model notice in your exit paperwork for terminated employees, and provide it to those who lose coverage due to reduction in hours through September 30.
DFEH Guidance: Keeping Workplaces Safe While Protecting Civil Rights
DFEH Guidance: Keeping Workplaces Safe While Protecting Civil Rights
Written by Doug Larsen, of Fishman, Larsen, and Callister
On March 4, 2021, the California Department of Fair Employment and Housing (“DFEH”) issued new guidelines to help employers maintain workplace safety and still uphold civil rights. This Guidance has been overshadowed by the many pronouncements of the CDC, state and local public health departments, the Governor’s office, other governmental organizations, including OSHA and Cal/OSHA. Nevertheless, it is important to be aware of how an employer’s efforts to maintain a safe workplace can affect employees’ civil rights.
The Guidance is in the form of questions and answers. Here are some of the highlights.
Medical Condition. The DFEH notes that the Fair Employment and Housing Act (“FEHA”) prohibits workplace discrimination and harassment based on medical condition. However, medical condition is limited to a health impairment related to a cancer diagnosis, record or history of cancer, or to genetic characteristics.
Employee Screening. FEHA permits employers to screen employees entering the workplace for COVID-19. This may include asking employees whether they are experiencing COVID-19 symptoms, and measuring body temperature. An employer can also ask employees why they have been absent from work, even if the employer suspects the cause of the absence was a medical condition. An employer may also require COVID-19 viral testing to detect the presence of COVID-19.
An employer is justified in sending an employee home if the employee displays COVID-19 symptoms. In fact, employers should take this action. An employee can use accrued paid sick leave (“PSL”) or other employer-provided benefits such as vacation or paid time off. Employers must send home an employee who tests positive for COVID-19. This employee may be entitled to PSL, other employer-provided benefits, supplemental COVID-19 paid sick leave, or workers’ compensation benefits.
CFRA. The Guidance indicates that an employee with COVID-19, or who cares for a family member with COVID-19 may qualify for leave under the California Family Rights Act (“CFRA”). In my opinion, it would be rare for an employee not to qualify for leave under the CFRA or under the Family and Medical Leave Act (“FMLA”). Employers should start the process to designate the time off as CFRA and/or FMLA leave when notified of a COVID-19 related leave. However, employers should not expect an employee to provide medical certification within 15 days of the request for leave due to the pandemic. An employer may even waive the requirement of medical certification during the pandemic.
Disability. The Guidance recognizes that an illness related to COVID-19 may or may not rise to the level of a disability. For example, an illness like the flu is not typically considered a disability. However, if the illness is more severe than the flu, an employer is charged with engaging in a good-faith, interactive discussion to determine reasonable accommodations, and then providing an accommodation unless it is an undue hardship.
It is difficult to determine a situation where a person struggling with severe COVID-19 symptoms might be able to work. However, an employee might qualify as an individual with a disability if caring for a person with COVID-19. Remember that an employee can be deemed within a protected class such as an individual with a disability because that employee is associated with a person who has a disability, or even a perceived disability.
Determining leave rights is a difficult process. My recommendation generally is to list all of the leaves that might be available to a person whose situation involves COVID-19 and make the determination for each of those leaves whether the business is a covered employer, whether the employee is an eligible employee under that law, and whether the conditions for the leave have been met.
Age. A person is not disabled simply because of advanced age. While older adults are at the highest risk, age is not a disability. Thus, an employer is not required to accommodate an employee based on age alone. (It is interesting to note here that according to the California Department of Public Health, as of April 14, 2021, persons 50-64 make up 19 percent of the COVID-19 cases in California and 20 percent of COVID-19 deaths. Persons 18-49 make up 57 percent of the COVID-19 cases and 7 percent of the COVID-19 deaths.)
Vaccination Requirement. An employer may require employees to obtain a COVID-19 vaccination so long as the employer does not discriminate and also provides accommodations for reasons of religious beliefs or disability. An employer should engage in the interactive process in both circumstances. No accommodation is required for an employee who simply believes the vaccine is unsafe or ineffective. Asking an employee for verification of vaccination does not violate FEHA.
Summary. Navigating the many COVID-19 laws, regulations, ordinances and other pronouncement is challenging. Contact your legal advisors for assistance in addressing these COVID-19 issues, and for implementing the required COVID-19 Prevention and Response Program in your workplace.
A copy of the DFEH Guidance is found HERE.
California Supplemental Paid Sick Leave: What Is It, and What Do We Do About It?
California Supplemental Paid Sick Leave
What Is It, and What Do We Do About It?
Last September, Governor Newsom signed a bill that created a statewide COVID-19-related paid time off benefit called supplemental paid sick leave (SPSL). While the federal government had passed the Families First Coronavirus Response Act and created Emergency Paid Sick Leave and Expanded FMLA leave, employers of more than 500 were exempt, as well as certain emergency response/healthcare employers. The 2020 SPSL benefit sought to close that gap – it applied to both employers of more than 500 and emergency response/healthcare employers. This benefit expired December 31, 2020 when the two FFCRA benefits technically expired.
On March 18, our state legislature passed two new bills that bring California SPSL into 2021. We expect Governor Newsom’s signature in the coming days, and they will take effect 10 days from the date that they’re signed. Like the federal FFCRA extension passed under the American Rescue Plan Act (ARPA), the requirement to provide supplemental paid sick leave will end September 30, 2021.
Which employers are covered by this new law?
While SPSL 2020 applied only to those exempted by the federal law (e.g. employers over 500 and emergency response/healthcare employers), SPSL 2021 applies to all employers of more than 25.
What does supplemental paid sick leave cover?
With some minor differences in language, SPSL covers the same situations now covered by EPSL and E-FMLA (including adjustments made by ARPA). Specifically, employees are eligible for SPSL when they are “unable to work or telework” because they are:
1. Subject to a quarantine or isolation period related to COVID-19 (issued by the California Department of Public health, the CDC, or a municipality).
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.
5. Experiencing symptoms of COVID-19 and seeking a medical diagnosis.
6. Caring for a family member who is subject to situations (1) or (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.
Employees are eligible to use this leave immediately upon hire.
How much time do employees receive?
Employees are entitled to two weeks off with pay (80 hours if they are full time). For part-time employees, the number of hours to which they are entitled depends on their schedule, and the legislation includes methods to calculate this benefit for employees with a variable schedule and brand new employees with a variable schedule.
Pay for this benefit is capped at $511/day and $5,110 in total.
Employees are able to determine when and how to use this except in just one case – employers may require employees to use SPSL before they are eligible for “exclusion pay” (as required by the Cal/OSHA COVID-19 Prevention Program standard).
This benefit is retroactive back to January 1, 2021. This means that employees who already took time off under one of the reasons above could request pay for that time off. If they do, employers must provide that pay by the payday for the next full pay period.
How does SPSL work with FFCRA benefits?
As we wrote on March 12, employers have the option of continuing federal FFCRA benefits – EPSL and E-FMLA – and then claiming tax credits on the wages paid to employees. No such tax credit is offered to employers required to provide California SPSL.
Employers are permitted to satisfy the requirements of the state law by providing employees with a benefit that covers the same reasons as SPSL, and pays the employees at the same rate as required by SPSL.
Consequently, employers who were on the fence about continuing to provide FFCRA benefits might choose to do so in order to both meet the requirements of SPSL law and claim federal tax credits.
(This provision does not apply to wages paid under a normal sick leave plan, including state-mandated paid sick leave, because this new law requires employers to provide a “supplemental” sick leave benefit.)
What notice must I give to employees?
We’ll be required to notify employees in two ways.
First, the Labor Commissioner will make a notice available shortly after the law is enacted. Employers must post this notice with other postings (or provide it electronically to employees who don’t visit physical offices or workplaces).
Second, employers must provide regular notice of an employee’s SPSL balance just like they do for state-mandated paid sick leave. This may be on the pay stub or provided separately every pay day.
Do I have to update my COVID-19 Prevention Program (CPP)?
As you know, Cal/OSHA has required employers to create COVID-19 Prevention Programs (CPPs). One section of your CPP should be devoted to benefits available to employees. As a result of both ARPA and this state SPSL law, that section will need to be updated.
If Sierra HR Partners helped you create your CPP, we will be sending out text that you can copy and paste into your CPP. If you haven’t created your CPP yet and need some help, please reach out to one of the consultants.
We understand how hard it is to keep up with ever-changing legal requirements! Please contact one of our certified Consultants by phone or e-mail, and we will be glad to help you navigate the latest developments.
Dan Larsen – firstname.lastname@example.org
Janet Keene – email@example.com
Paid Leave Benefits and the American Rescue Plan Act: Extensions of EPSL and E-FMLA
Paid Leave Benefits and the American Rescue Plan Act
Extensions of EPSL and E-FMLA
On March 11, President Biden signed the American Rescue Plan Act of 2021 (ARPA). The text of this bill fills over 240 pages, including an extension – and expansion – of paid leave tax credits first introduced almost one year ago as part of the Families First Coronavirus Response Act (FFCRA).
While the requirement to provide these paid leave benefits – Emergency Paid Sick Leave (EPSL) and expanded FMLA leave (E-FMLA) – expired December 31, 2020, Congress extended the tax credits shortly before the end of the year. This allowed employers to claim credits through March 31, 2021. Under this year-end change, organizations could voluntarily decide to roll over these FFCRA paid leave benefits into 2021. The ARPA does something similar – tax credits are extended, so employers may voluntarily provide these paid leave benefits (and claim the associated tax credits) through September 30, 2021.
Reasons for Leave
Previously, EPSL could be used for six different reasons, and E-FMLA could be taken to care for a child whose school or day care had closed. Now, under the ARPA, both EPSL and E-FLMA can be taken for these reasons, as well as additional reasons including:
- Seeking or awaiting the results of a COVID-19 diagnostic test/medical diagnosis, including if this has been required by the employer
- Obtaining COVID-19-related immunization
- Recovering from injury, disability, illness, or condition related to a COVID-19-related immunization
Resetting the Clock
Another significant change is that the 10-day limit associated with EPSL now resets on April 1, 2021. As a result, employers can voluntarily provide employees with an additional 10 days of EPSL, including to those employees who exhausted this benefit before April 1, 2021.
While there’s no similar automatic “reset” for E-FMLA leave, employers should approach this like they approach traditional FMLA leaves, and evaluate how much leave an employee has available in the employer’s 12-month leave tracking period. (Even if an employee has exhausted the 12-week FMLA entitlement for these or other qualifying reasons, he/she may still take up to 10 days of EPSL for reasons listed in the ARPA.)
Increased E-FMLA Caps
The 10-week limit on E-FMLA was also increased to 12 weeks (and the $10,000 cap increased to $12,000), meaning that a full 12 weeks of paid time off is available to employees under the reasons outlined above.
The Option to Provide Paid Leave Benefits
We understand that it may seem simpler to not offer EPSL and E-FMLA benefits. Some employers have concerns that employees will take advantage of the fresh availability of 80 hours of sick leave. However, with COVID vaccinations gaining momentum, you may find employees requesting time off to recuperate from side effects, particularly after the second dose. EPSL could be a way to provide reassurance that employees will not lose income as a result of receiving the vaccine.
As you are likely aware, Cal/OSHA passed an emergency temporary standard that requires employers to create COVID-19 Prevention Programs. Part of this regulation requires employers to provide “exclusion pay” – pay to employees who would otherwise be able to work were it not for their exclusion from work following a COVID-19-related exposure or positive test. While it’s valid to question whether Cal/OSHA has this kind of regulatory authority, providing EPSL benefits during the exclusion from work allows employers to claim tax credits for these payments.
EPSL and E-FMLA must be offered consistently, either to all employees or none. It may be reasonable that the rewards for keeping these benefits available outweigh the potential drawbacks.
We’re Here to Help!
We expect the Department of Labor to issue clarifying comments in the days and weeks ahead. Sierra HR Partners will keep you posted on developing information. Please contact us with any questions you have.