On September 29, 2022, California Governor Gavin Newsom signed Assembly Bill (AB) 152, which extends the COVID-19 Supplemental Paid Sick Leave (SPSL) program until December 31, 2022. That means businesses with 26 or more employees have to keep paying for sick leave if they have team members out with COVID.
But there's some good news for the small businesses required to adhere to the SPSL.
AB 152 created a program called the Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program. It gives small businesses and nonprofits in California the opportunity to get reimbursed for COVID-19 sick leave.
Before AB 152, small businesses had to foot the bill for sick leave when team members were out with COVID. With the new law, they can get some help offsetting those costs.
So, let’s dig into the details, including who’s eligible and what documents you’ll need to provide.
What Is the Small Business and Nonprofit COVID-19 SPSL Relief Grant Program?
The SPSL relief grant program reimburses small businesses and nonprofits in California up to $50,000 for the costs associated with providing paid COVID sick leave to employees. These costs need to be incurred between Jan. 1, 2022 and Dec. 31, 2022.
What Small Businesses and Nonprofits Are Eligible?
To get this grant, small businesses and nonprofits have to meet these eligibility requirements:
- Began operating before June 1, 2021
- Be registered as a “C’ or “S” corporation, an LLC, partnership, limited partnership, or a registered 501(c)(3), 501(c)(6), or 501(c)(19) entity
- Be active and operating
- Employ 26 to 49 workers (That's because if you have less than 26 employees, you're not required by California law to pay for COVID sick leave.)
What Documents Do I Need for the SPSL Grant?
The good news is that the paperwork for getting an SPSL grant is fairly painless. You probably already have the essential papers on hand. Here’s what you’ll need:
- Payroll records that show you provided COVID-19 SPSL from Jan. 1 to Dec. 31, 2022
- A signed affidavit attesting to your employee count
- Organizing documents, like a 2020 and 2021 tax return, Form 990, and official filings with the Secretary of State
If a small business or nonprofit fails to meet these criteria after being given a grant, the government can reclaim the money.
Application for the SPSL Relief Grant
So, how does the application process work?
While the new portal isn’t up and running, we can get an idea based on similar COVID business relief grants.
Small business owners will most likely be able to submit proof of employee payroll records and business filings online. Once the application is processed, you’ll get the money in your business bank account.
Stay tuned for more information on the grant process!
Are there Any Businesses that Aren’t Eligible?
It’s possible that your business checks all the eligibility requirements. But it’s just as important to see who can’t apply to be 100% sure you're a qualified small business.
Employers that aren't eligible for a grant include:
- Businesses and nonprofits that don’t operate in California
- Nonprofits that aren’t registered as 501(c)(3), 501(c)(6), or 501(c)(19) entities
- Government entities, except for Native American tribes
- Organizations that focus on lobbying activity
- Passive businesses
- Investment companies
- Investors who file a Schedule E when filing taxes
- Financial institutions
- Illegal businesses
- Businesses that have customer restrictions for any reason except the capacity
- Speculative businesses
- Companies with an owner who has 10% equity interest if that owner has been convicted of a crime within three years or if they are currently indicted
- Affiliate companies as defined by Section 121.103 of Title 13 of the Code of Federal Regulations
California COVID Sick Pay 101
In case you’re curious about California’s COVID sick pay program in general, here’s a quick overview:
Originally passed in February 2022, the Supplemental Paid Sick Leave Program entitles full-time employees to up to 80 hours of paid leave broken down into two banks:
Bank One (40 Hours of SPSL): Isolation, Vaccines, Childcare
- Isolation period
- Vaccine and booster appointments for yourself or family members
- Recovering from symptoms or vaccine side effects
- Getting a COVID test or medical diagnosis
- Caring for a family member in quarantine or isolation
- Caring for a child when the school or childcare has closed due to COVID
Bank Two (40 Hours of SPSL): Positive Cases
- Employee has tested positive for COVID-19
- Family member had a positive test
- Employee or family member is unable to work remotely
Originally, the SPSL program was set to expire in September, but thanks to AB 152 it’s been extended through the end of the year. Legislators also added a few new elements to the SPSL law, aside from creating the grant program.
Now California employers can ask for a third COVID-19 test within 24 hours of a second diagnostic test that was positive. They can also refuse paid sick leave to employees who won’t comply with required tests.
California Business Relief is Coming
While paid sick leave laws help protect public health during the coronavirus pandemic, they can also put businesses in a tough spot financially. That’s why it’s good to see some relief from California’s legislators and the governor’s office.
The California SPSL grant program will help small businesses and nonprofit organizations reduce the financial burden of paying for COVID sick leave.
You can get up to $50,000 toward the costs of paying for this leave and, as long as you qualify, the grant application process should be simple.
Curious what that will entail? Check back with us and we’ll take you through the application as soon as the portal is up and running!