Gov. Gavin Newsom and legislative leaders agree to restore California paid sick leave for COVID-19. Here’s what you need to know.
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California workers will soon again have access to as much as two weeks paid time off for COVID-related sick leave, under a deal approved by state lawmakers on Feb. 7 and signed into law by Gov. Gavin Newsom on Feb. 9.
The agreement comes amid the omicron surge and the resulting labor shortage across the state’s workforce, including health care, schools and public transit. And it may be just in time: The number of Californians who were not working in the last month because they or a family member had COVID-19 increased by 320%, according to a California Budget and Policy Center analysis of census data.
California workers have been without extra paid time off for COVID – on top of just three days of regular paid sick leave – since a statewide program ended Sept. 30. But the pandemic has peaked again since then. And labor groups and advocates have been lobbying for months to restore it.
Under the deal negotiated and announced Jan. 25 by Newsom, Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon, the new leave program will be retroactive to Jan. 1 and extend through Sept. 30.
In his budget proposal on Jan. 10, Newsom said he wanted the leave reinstated, though details were unclear. With the agreement, the Legislature will act on Newsom’s $1.4 billion emergency budget request for COVID-related programs, well before the regular budget is approved in June.
On Feb. 7, the full Assembly approved it on a 55-7 vote and the Senate followed suit by a 30-7 vote.
In signing the bill at Nido’s Backyard restaurant in Oakland, Newsom praised the Legislature for acting quickly and the California Chamber of Commerce for its willingness to compromise with the California Labor Federation.
One of the key negotiating points was to offset the costs to businesses, especially smaller ones. As with the previous leave, the new leave only covers employers with 26 or more workers, and the state will provide tax credits to companies.
“California’s ability to take early budget action will protect workers and provide real relief to businesses reeling from this latest surge,” the joint announcement said on Jan. 25. “By extending sick leave to frontline workers with COVID and providing support for California businesses, we can help protect the health of our workforce, while also ensuring that businesses and our economy are able to thrive.”
Here are some key points to know about the deal:
Who can use the leave?
Any full-time employee of a company that has 26 or more workers is entitled to 40 hours of paid leave due to COVID. That doesn’t cover getting the vaccine or recovering from side effects: in that instance, a worker gets a maximum 24 hours.
But to get additional paid leave, as much as 40 hours more, workers would have to show proof that they or a family member has tested positive. This provision is apparently to address concerns from the California Chamber about possible fraud by employees. Employers must pay for and provide the test. If a worker refuses to take a test or show a positive test result, no additional sick leave will be granted.
Under current health guidelines, anyone who tests positive should quarantine for five days, regardless of vaccination status. While the proposal was put together during the omicron surge, the number of daily cases is now declining, below 38,000.
The leave will be retroactive to any time off starting Jan. 1. Employers can require workers to provide documentation of a positive test during that time period.
Employees will be compensated at their regular pay rates, a maximum of $511 a day, or $5,110 total.
But making only employees at larger businesses eligible leaves out three in 10 workers, the budget center says.
What do businesses get?
Last year, they were reimbursed for the supplemental paid leave with a federal tax credit, which is no longer available.
This time, businesses will have to absorb the costs, but they will be helped by restoring tax credits for research and development and net operating losses, through tax relief for recipients of federal relief grants for restaurants and shuttered venues and additional funding for more small business grants. The assistance totals $6.1 billion.
Asked if the agreement includes enough aid for small businesses, Newsom replied: “If it’s not, we’re going to do more.”
The Cal Chamber said the bill also ensures that the rate of pay matches existing sick leave and makes reporting wage statements simpler.
Chamber President and CEO Jennifer Barrera had said any new sick leave mandate should be limited in duration, have “reasonable parameters” and shouldn’t overly burden businesses.
She said Feb. 2 that the latest proposal is a “balanced approach to protect both workers and our economy.”
“Based on concerns and input from Cal Chamber, the Governor’s office considerably improved their original proposal to make reinstatement of the leave far more affordable and manageable,” Barrera said in a statement. “While we understand this additional leave will be shouldered by many employers, the proposal is more limited in scope and duration than what was originally discussed. We appreciate productive discussions with the Governor’s office, Legislature, and advocates for labor.”
The California Retailers Association, however, still has concerns. Steve McCarthy, its vice president of public policy and regulatory affairs, said that employees who are exposed to COVID on the job are already eligible for pay under Cal/OSHA rules. “This measure acts as an additional layer of leave on top of what employers are already required to provide and will apply whether the employee contracted the virus at work or not.”
What do labor groups say?
Unions representing workers in industries including healthcare and food service applauded the deal.
“We know we can’t wait for employers to keep us safe – we have to advocate for ourselves, and Governor Newsom and legislators listened,” said Bob Schoonover, president of SEIU California. “SEIU members feel proud to have been a part of this critical decision that protects our communities – working people and people of color, who have been at the frontlines as we battle this virus.”
The United Food and Commercial Workers Western States Council said that workers can stay home without the fear of losing two weeks of pay, or their job. Nationwide, those with household incomes of less than $25,000 a year have been 3.5 times more likely to miss a week of work due to COVID-19 than those earning more than $100,000 a year, according to a study by the Economic Policy Institute.
“No one should be forced to choose between their family’s safety and a paycheck,” Carolina Rocha, a janitor and executive board member of SEIU-United Services West, said in a statement. “Most workers in California can’t afford a gap in pay. The bills have to get paid every month. California’s leaders did the right thing by listening to us.”
Labor unions are key supporters of Democratic officials, and their volunteers and money will be at a premium for legislators and the governor in this year’s elections. Last year, SEIU contributed $6.6 million to help Newsom defeat the recall effort.
The sick leave bill is on the fast track. Now that it has been signed by the governor, it will take effect Feb. 19. It’s part of Newsom’s package of emergency COVID-19 bills that includes funding for vaccination efforts, testing and rental assistance.
“Its inclusion in early action recognizes that California must take action now to slow the spread of COVID in the workplace, which affects workers, their families, co-workers, customers, and communities at large,” said Erika Li, chief deputy director of the budget for the California Department of Finance.
Sen. María Elena Durazo, a Democrat from the Los Angeles area, said during the budget committee meeting that while the leave was an efficient and important way to slow down the spread of COVID-19, the package could do more to provide economic relief to small businesses with fewer than 26 employees.
“I think we need to be more explicit and targeted with economic relief for the businesses. as much as for the men and women who work for them,” she said.
A state law gave California workers as much as two weeks additional paid sick leave during COVID-19, but it ended Sept. 30 as a federal tax credit that offsets the cost for employers also expires. Labor groups say the extra leave should be restored. And Gov. Gavin Newsom now says the Legislature should do so.