California’s COVID sick pay law gives employees up to 80 hours of paid sick leave for COVID-19-related reasons, including getting vaccinated. It will remain in effect until the end of 2022.
This sick pay law—called Supplemental Paid Sick Leave 2022 (SPSL 2022)—applies to businesses with 26 or more employees and started retroactively on Jan. 1, 2022. And while it was set to expire in September, a bill (AB 152) passed and signed by Governor Newsom extended the program until December 31, 2022. It's not, however, going to be renewed again. That means as soon as 2023 hits, businesses won't be required to provide this paid leave.
If your employees get COVID before the end of the year, however, they are owed paid COVID leave even if the illness extends into 2023. In other words, as long as they get a positive COVID test before Jan. 1, they'll be covered by this law.
Businesses are responsible for paying for the supplemental sick leave, unless they are awarded a grant. Some small businesses and nonprofits are eligible to get up to $50,000 to cover some of the costs of SPSL.
Keep reading to find out if you need to follow these rules and how to handle issues like employee time off requests and retroactive pay.
Does COVID Sick Pay Apply to Your Business?
Like the state’s previous 2021 COVID-19 sick leave law, COVID sick pay applies to all California public and private employers with 26 or more employees.
Or, to put it another way, if you’re an employee who works for a California company with more than 25 workers, you can get paid for hours you took off to deal with COVID under California’s COVID-19 sick pay law.
2022 vs. 2021 Laws
Like the previous year’s supplemental paid sick leave law, there is no government fund allocated to paying for employee sick leave in 2022. Instead, employers are responsible for covering the cost of the supplemental paid leave. The one caveat to this is a new bill recently passed that establishes a grant program for small businesses to get up to $50,000 in funds for SPSL.
There are some key differences in this year’s law that might be helpful to understand. Previously, employers could require their workers to use their COVID-19 supplemental paid sick leave hours if they had close contact with an individual who tested positive for the virus.
That’s no longer allowed in the new law. Instead, it’s completely up to the covered employee to decide how many supplemental paid leave hours to use and when. The second notable difference is that the 80 hours of supplemental leave are divided into two leave banks, depending on the qualifying reasons.
Bank One: 40 Hours Given for Isolation, Vaccines, and Childcare
The first bank of sick leave gives up to 40 hours of paid time off for vaccine-related appointments, COVID-related self-care, and caring for a family member.
Specific reasons employees can use COVID sick leave under the first bank include:
- Quarantine or isolation period
- Vaccine appointments (including boosters) for self or family member
- Employee or family member experiencing symptoms or vaccine side effects that make them unable to work
- Getting a diagnostic test or medical diagnosis from a health care provider due to experiencing COVID-19 symptoms
- Caring for a family member that is doing a required or advised quarantine or self-isolation
- Caring for a child whose school or daycare has closed due to COVID-related issues
The law defines a family member as a child, parent, spouse, registered domestic partner, sibling, grandparent, or grandchild.
Bank Two: 40 Hours Given for Positive Test Cases
The law also gives another 40 hours of leave to employees who have tested positive for COVID-19 and cannot work or telework. An employee can also use these hours to care for a family member that has tested positive for the virus.
If you have an employee who requests leave for reasons related to having COVID-19, you can request documentation or proof of the positive test result. Employers may deny employee requests for supplemental paid sick leave if the employee refuses to provide the positive test documentation or get a diagnostic test.
Employers can request that their employees (or their employee’s family member) take a second test on or after the fifth day following the first positive test. However, employers that request a follow-up test must provide employee tests at no additional cost. Since employers are responsible for providing the second test, this can become a practical and administrative challenge, and we generally don’t recommend it.
Leave Limits for Vaccines and Boosters
Under California’s COVID sick leave law, employers can set a maximum time off allowance of three consecutive days (or 24 hours) for leave to get a vaccine or booster shot.
However, there is a continuing symptoms exception: employees can take off more than three consecutive days if they or a family member keeps feeling sick after the shot.
So, let’s say you have an employee who takes a day off to get a COVID-19 vaccine booster shot and the next two days off because of the lingering side effects. If the employee experiences new COVID-19 symptoms the next day or their symptoms from the vaccine continue, they’re allowed to take a fourth consecutive day of paid leave. And, again, you have to pay for that–it doesn’t come from a government fund.
How To Calculate Compensation Rate
An employee’s compensation rate under these paid sick leave regulations depends on whether they are considered an exempt or nonexempt employee. Nonexempt employees typically include part-time and hourly employees covered by the Fair Labor Standards Act (FLSA), whereas exempt employees are paid a regular salary instead of by the hour.
Note: while most hourly employees are covered by FLSA, some are considered exempt employees, including wait staff, truck drivers, and movie theater employees.
For exempt employees, you calculate their compensation rate the same way you would treat other paid time off, such as vacation time or sick days. You’ll use their annual salary to calculate their hourly regular rate of pay. As for nonexempt employees or exempt employees who are paid hourly, you can use one of two methods to determine the compensation rate. First, you can pay them the same way you would during a regular workweek. Or second, you can calculate their “90-day lookback.” Here’s how it works:
Hourly Rate = (Total Wages Paid in Past 90 Days) / (Total Regular Hours Worked in Past 90 Days)
Do not include overtime wages or hours when using the “90-day lookback” calculation. For both exempt and nonexempt employees, you do not have to pay more than $511 per day or $5,110 total for COVID sick leave.
Retroactive Application of COVID Sick Pay California 2022
The allowances given by California’s COVID sick leave law apply retroactively to Jan. 1, 2022, but what does that mean for small businesses? Here’s a closer look at the guidelines for how to account for supplemental sick pay hours and when you need to offer retroactive pay.
If you gave an employee paid time off after Jan. 1, 2022, and it was for COVID, you can offset those hours, or in other words, count them toward the maximum supplemental paid leave time given by SPSL 2022.
However, wages paid for absences from an employee's accrued leave bank, which can include vacation days, PTO, and sick pay, do not count towards an employee’s COVID-related supplemental paid sick leave time.
True-Up and Retroactive Pay
You need to pay the difference if you provided paid leave, but at a lower rate than the new law requires. This is also known as a true-up. Employees that qualify for this kind of retroactive pay can make verbal or written true-up requests. If an employee requests to be paid the difference, they have to be paid by payday of their next full pay period.
Can All Employees Take 80 hours of Leave?
While the sick leave law gives up to 80 hours of total paid sick time, not every employee can get the full amount. Covered full-time employees (who work 40 hours per week) can use all 80 hours, provided they take time off for qualifying reasons.
On the other hand, employees who work less than full-time receive a prorated number of hours based on their schedule and how long they have worked for you.
Here are the calculations for prorated hours:
- Regular part-time employees: Maximum number of leave hours in each bank is equal to the number of hours they work per week. For example, an employee who works 25 hours per week can take up to 25 hours of paid leave for each bank.
- Variable hours, employee has worked for you for more than six months: Maximum hours for each bank is equal to seven times the average number of hours per day the employee worked over the past six months. For example, someone who worked an average of four hours per day for the past six months can have up to 28 hours of leave in each bank.
- Variable hours, employee has worked for you for at least seven days but less than six months: Use the calculation above (7 x the average hours worked per day) and apply it to the entire time the employee has worked for you. For instance, if you hired someone three months ago, and in that time they averaged five hours per day, they are entitled to 35 hours of supplemental paid leave per bank.
- Variable hours, fewer than seven days of employment: Maximum leave capped at the total number of hours the employee has worked for you.
How Employees Should Request Leave
To use the COVID paid sick leave, employees must make an oral or written request. If an employee requests time off due to a positive test, they should show proof if their employer asks.
Like the previous COVID-19 supplemental paid sick leave law, information about this new law must be provided to employees.
If your employees work in the same office, you need to display the SPSL 2022 informational poster where it can be easily read. Otherwise, if you have remote or teleworkers, you should send out an electronic copy of the poster.
You’ll also have to include how much COVID leave an employee has used on their pay stub or wage statement, even if that number is zero. So, for those who haven’t used any hours, they’ll have a zero noted on their pay stubs in this section. You can print the information on the pay stubs or attach a written notification on a separate page for each pay period.
While you don’t have to specify whether an employee took leave for the first or second bank of hours, separating the two on pay stubs will make it easier for your employees to track their leave.
State COVID-19 Leave and Local Laws
Besides the state’s COVID leave law that went into effect, some localities such as Long Beach, Oakland, and Los Angeles County also passed ordinances providing employees with COVID-19-related leave.
If you provide paid leave according to a local ordinance, you can also count it towards the state’s COVID paid leave requirements if it meets the following criteria:
- The compensation rate is equal to or more than outlined in California’s COVID leave requirements (80 hours total, separated into two banks).
- The employee took leave for a reason covered by the state’s law.
All in all, if you gave an employee leave to deal with COVID based on local laws, you can probably count the hours toward the state and local requirements.
Tips for Complying with California’s Supplemental Paid Sick Leave Law in 2022
For more information or updates, check your local ordinances page or refer to the labor commissioner’s SPSL 2022 FAQ page.
If you’re an employer who must provide leave under SPSL 2022, you can take a few steps to make sure you’re complying with the law:
- Start by posting the required poster or emailing it to your employees.
- Make sure your payroll system is set up to include the number of COVID-19 sick leave hours employees have already used.
- If you can’t make edits to your pay stubs, draft a separate written notice that includes the hours used for each employee.
To stay organized, you can also create a time off request form that lists all the reasons covered by the law. This makes it easier for employees to request time off and gives you a standard format to track which leave bank an employee uses.
Stay On Top of COVID Sick Leave
Staying compliant can be confusing, especially when the guidelines change or update each year. For this particular law, remember that your team members are entitled to paid COVID sick leave (if they’re in California), and how much time they get depends on how long they've worked for you.
Either way, you can almost always count on the leave being a pretty solid amount, and you’ll have to pay for it out of your own coffers. And now that you are up to date on California’s COVID paid sick leave law—all that’s left to do? Start making sure your employees are taking it!
1. Introducing Yourself
Your introductory email needs to pack a lot of information into a small package. Try something like this:
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My name is John Doe and I work for ABC Agency, where we provide business insurance policies to many of Dallas' rockstar small businesses.
Congratulations on your new business, Jane's Bakery. Are you wondering if you have all the insurance you need? Or if your policies will really cover you in a pinch?
At ABC Agency, we pride ourselves on providing robust, comprehensive coverage options to companies like yours with flexible, pay-as-you-go plans.
Are you available this week to talk more about how we can help? I can help you find the most affordable rates and the best policies out there.
I look forward to speaking with you soon.
2. Presenting a Quote
Once you've met with your potential client, a quick reply with their quote will get the ball rolling.
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Thanks so much for meeting with me this morning. I loved touring Jane's Bakery–I can still smell those delicious chocolate chip cookies baking! You have a great location, and I'm sure you're going to do great on Front St.
After reviewing my notes, I've pulled together an insurance quote for you (attached). I recommend a business owner's policy. A BOP includes several insurance products in one: liability, property insurance, and business interruption insurance. It offers robust coverage at a competitive price.
I'll call you in a few days to see what you think about this insurance plan. In the meantime, if you have any questions, don't hesitate to email me or call me at [phone number].
Again, thank you for your time today. I look forward to working with you in the future.
3. Thanks for Purchasing a Policy
Gratitude is important! It's never a bad idea to thank your clients for their business.
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Thank you for choosing a business owner's policy with ABC Agency. We know it's so important to get the right coverage for your business, and we are honoured you've placed your trust in us.
We're excited to work closely with you, and our no. 1 goal is to make sure you're business is always protected.
Do you have any questions? We are here to help. Reach out whenever something comes to mind.
Thank you again for choosing ABC Agency to insure Jane's Bakery.
4. Welcome Email
A welcome email helps clients feel like you're there to help–and can softly pitch other insurance products you offer.
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Welcome to the ABC family! We are thrilled to have you as a new customer and can't wait to meet all of your insurance needs.
As an independent insurance agency, we work with multiple insurance providers to find the best coverage options for all our customers. If you need any other type of insurance–like [include additional offerings unique to your agency, like life insurance, health insurance, home insurance or anything else]–we can help you too.
Do you want to discuss any of these policies?
5. Introducing a New Product
A happy client may want to expand their business with you.
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I hope all is well with you and Jane's Bakery. I stopped in yesterday for a blueberry muffin and coffee, and they were delicious. I loved the hint of cinnamon in the muffin! Was that your idea?
I wanted you to be the first to know we are now offering commercial vehicle insurance to our policyholders. Auto insurance for your catering vans is super important since your personal car insurance won't cover them.
We're offering this insurance coverage solely to our current business clients at the moment and have some very competitive rates.
Would you like me to work up a quote for you?
As always, thanks so much for being a part of the ABC family.
6. Asking For Referrals
Once your relationship is established and comfortable, let your clients help you grow.
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You've been a valuable member of the ABC family for two years now, and we so appreciate your business–not to mention the muffins you supply for our monthly meetings!
Because you are a valued policyholder, I wanted to ask a quick favour. I know you are active in the local Chamber of Commerce, and I'm hoping you might know some colleagues who would benefit from working with our insurance company.
Referrals are one of the most effective ways to connect with our community since people really trust their friends, family and colleagues. Is there anyone you'd recommend I speak with?
Remember that in addition to business insurance products, we offer everything from life insurance policies to pet insurance.
As a thank you for your help, we will send you an Amazon gift card of $100 when your referrals buy insurance from us.
Thanks so much for your help!
7. Policy Renewal
If your client needs to renew their policy with you, send an email like this:
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I hope you're doing well! What a year it's been—from being listed as one of the top 5 bakeries in Dallas to being an official vendor for the city—you have so much to be proud of.
Just a heads up that your business owner's policy is up for renewal soon and will expire on June 15, 2023.
If you're still happy with the coverage, we can easily renew it for you.
Do you have some time to chat this week?
Looking forward to serving you again!