Paid Leave Bill Passes
Paid Leave legislation passed the week of March 15 in both the Assembly and the Senate. The Budget committees of the respective chambers considered the budget bills AB 84/SB 95 to create a new COVID-19 paid sick leave mandate. The Assembly passed their version of the bill on Monday, March 15, 2021 and the Senate agreed to the Assembly bill on Thursday, March 18, 2021. Governor Gavin Newsom is expected to sign the bill early next week. The NTMA Chapter worked with business and other groups in our coalition to oppose the legislation.
The measure mandates up to two weeks (80 hours) of COVID-19 paid sick leave retroactive to January 1, 2021, for all employees who work for a public or private employer with more than 25 employees. This is new leave in addition to any COVID leave paid by employers in 2020. The leave can be taken for seven different COVID-19 related reasons:
- Subject to quarantine or isolation related to COVID-19 as defined by the State Department of Public Health, Centers for Disease Control and Prevention, or a local health officer who has jurisdiction over the workplace,
- Advised by a health care provider to self-quarantine due to concerns related to COVID-19,
- Attending an appointment to receive a COVID-19 vaccine,
- Experiencing symptoms related to a COVID-19 vaccine that prevents the employee from being able to work,
- Experiencing COVID-19 symptoms, and is seeking a medical diagnosis,
- Caring for a family member, as defined in existing law under subdivision (c) of Section 245.5 of the Labor Code, who is subject to quarantine or isolation as specified in (a) or (b) above, or
- Caring for a child, as defined by existing law under subdivision (c) of Section 245.5 of the Labor Code, whose school or place of care is closed due to COVID-19.
While the legislation doesn’t provide any tax credits or other financial relief to help offset the cost of the leave, supporters point to the federal tax credit included in the recently passed COVID relief bill. While the federal tax credit has been extended through September 30 and the 80-hour limit for the credit will reset, that reset does not occur until after March 31. With the California mandated leave being retroactive to January 1, 2021, employers will not be able to claim the credit for leave taken between January 1 and March 31. In addition, the federal credit is only available to businesses with fewer than 500 employees.
Along with coalition partners, we sent a letter to members of the Legislature opposing AB 84/SB 95, specifically stating the issues with the lack of state financial support, the retroactivity provision and the potential liability issues and penalties tied to retroactivity. While not directly in the statute, a representative from the Department of Finance has stated that they believe an employer cannot be subject to violation for not providing sick leave before the law goes into effect. Employees will have to ask for retroactive payment. Further clarification as well as a comprehensive FAQ is expected from the Labor Commissioner’s Office. We also expect to see clarifying language on how the new mandate may intersect with the COVID-19 Emergency Temporary Standards.
California Tax Deadline Extended
This week the Treasury Department and the Internal Revenue Service (IRS) announced that the federal individual income tax filing due date for the 2020 tax year has been extended from April 15 to May 17, 2021. Individual taxpayers can also postpone payments due on April 15 to May 17, without penalties and interest. California followed suit with the Franchise Tax Board announced that the state will also extend the tax filing and payment deadline for individuals to May 17.
The extension at both the federal and state level does not apply to estimated tax payments due on April 15, 2021.
PPP Conformity Bill Set to Considered Next Week
Legislation to conform California with federal law allowing California businesses to deduct up to $150,000 of expenses paid with forgiven Paycheck Protection Program loans will be considered in the Assembly Committee on Budget next Monday, March 15, 2021. A survey conducted nationally by the NTMA showed that over 80% of members secured a PPP loan and this change would help reduce surprise taxes imposed on borrowers after the fact. The NTMA successfully lobbied to overturn the IRS in Washington, D.C. to allow the deduction of expenses on federal returns.
The measure would also exclude from taxation advance grants provided under the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program. The bill, AB 80 introduced by Assemblymember Autumn Burke, was held out of the larger COVID-19 relief legislation passed by the state last month to allow for amendments. Following Committee action, it is expected to immediately move to the floor of the Assembly for consideration.
DFEH Releases COVID-19 Vaccine Guidance
The California Department of Fair Employment and Housing (DFEH) has released updated COVID-19 guidance. The updated guidance, released on March 4, 2021, includes new information addressing vaccination-related issues.
In the new guidance, DFEH says that employers can require employees to get vaccinated so long as the employer complies with the Fair Employment and Housing Act (FEHA). The DFEH makes clear that it is not providing guidance on whether an employer should mandate vaccinations of their employees. Rather, DFEH only addresses how an employer should comply with the FEHA if it decides to require employees to be vaccinated.
Should employees object to getting vaccinated due to disability or religious beliefs, employers must reasonably accommodate those employees as well as engaging in the interactive process to identify the accommodation. This could include job restructuring, reassignment or modification of work practices. Employers do not have to provide accommodations that result in “undue hardship,” but can exclude the employee from the workplace in those instances.
Absent a disability or religious belief, an employer is not legally required under the FEHA to accommodate the employee and thus an employee cannot object to the requirement of a vaccine just because they don’t “trust that the vaccine is safe.” Employers may also enforce disciplinary policies and practices for employees that refuses to be vaccinated but does request a reasonable accommodation due to disability or religious beliefs. However, employers should be cautious that their actions do not qualify as retaliation against someone who alleges that the employer’s vaccination policy discriminates or has a disparate impact on a protected group. As always, it is advised employers consult labor counsel or an HR professional prior to ensure compliance.
To review the full DFHE updated guidance click here: https://www.dfeh.ca.gov/wp-content/uploads/sites/32/2020/03/DFEH-Employment-Information-on-COVID-19-FAQ_ENG.pdf
Paid Sick Leave to be Heard in Committee Next Week
Extended COVID-19 supplemental paid sick leave legislation is set to be heard in both the Senate and Assembly Budget committees next Monday, March 8, 2021.
Amendments to the bill are close to being finalized and final language should be releases shortly. Sources indicate that the final language for both versions of the bill will not include a state tax credit to provide financial support to employers for the cost of providing COVID sick leave to employees due to the extension of federal tax credits through September 2021 included in the relief package currently being considered in Congress. That credit, however, is not expanded to include the additional 80 hours of paid sick leave provided under AB 84/SB 95. There is discussion though that the bills do include an exemption for businesses with 25 or less employees.
While staff in the Senate have indicated that the bill is finalized and they are not accepting or considering any additional amendments, it is possible that the Assembly bill could still be amended. We are working with our coalition partners who continue to reach out to leadership and staff to ask that the bill:
- Limit who the employee can take the sick leave for to themselves or family members under California Family Rights Act
- Change calculation of how sick leave is paid to mirror calculation for existing paid sick leave under 246(l);
- Identify the amount of sick leave available based on hours employee is generally scheduled to work, not the week the employee takes the leave OR fix wage statement requirement so employer does not have to calculate this out every week for employees who have variable schedules;
- State that it does not go into effect until the date it is signed. Right now the language proposes to reach back to January 2021 – meaning employers could get hit with lawsuits/demands for back pay, derivative penalties, PAGA, etc.
The bills (AB 84/SB 95) could quickly move towards a final vote following committee consideration.
COVID Liability Protection Bill Introduced
After a federal proposal failed to move in 2020, states are pushing forward with proposals to shield businesses from lawsuits due to workplace exposure of COVID-19. Legislation has been introduced in the Assembly to provide businesses COVID-19 civil liability protection. The bill (AB 1313), introduced by Assemblymember Bigelow (R), provides businesses who have substantially complied with all health and safety laws, protocols and guidance, with protection from frivolous lawsuits alleging a consumer contracted COVID-19 while on the businesses premises.
Liability protection has been a significant issue at both the state and federal level to provide protection to businesses that are following the rules and providing protection to employees while they operate during the global pandemic.
While California has considered legislation to provide schools with liability protections, supporters of liability protection for businesses argue that COVID liability protection should be provided to entities in all industries that are following all relevant safety laws and guidance.
February 27 Update
Paid Sick Leave Legislation Moving
Legislation to extend paid sick leave is now moving in the California State Legislature. Official language was introduced this week in both the Senate and Assembly, AB84/SB 95. The legislation will extend COVID-19 supplemental paid sick leave for covered workers, if those workers are unable to work or telework due to reasons related to COVID through September 30, 2021.
While there has been some support for small businesses from the State, such as the currently proposed $2 billion grants program (SB 86), the funding level is not enough for sustained support for businesses to continue operating, much less afford to continue to provide supplemental paid sick leave. Any proposal to impost a new COVID-19 leave mandate on employers must include a funding from the State to pay for the costs of that leave.
The legislation is expected to move late next week or early the following week. While Labor is pushing hard for passage, legislators and staff seem open to the possibility of amending the legislation.
Reminder: Pay Data Reporting Due to DFEH By March 31
Pay data reporting is due to California Department of Fair Employment and Housing (DFEH) by March 31, 2021. New this year, all employers with 100 or more employees who file an annual Employer Information Report (EEO-1) under federal law must now file a report with DFEA on pay and hours works data by establishment, job category, sex, race, and ethnicity.
The information required closely mirrors that which must be reported on the annual EEO-1. Reports must include all employees who are assigned to California locations or who work or live in California. If an employee is assigned to a California location but works at a client site or teleworks outside of California, then that employee should also be included in the report. Employers must also include all California employees who telework from California to a non-California location. This requirement means that California employers must track where an employee resides, in addition to where the employee works or reports. Employers may also report on non-California establishments or employees, if doing so reduces the reporting burden.
The information, which will be aggregated and used by DFEH to give the agency a better understanding of any areas of concern that need to be addressed, will be kept confidential. To file visit the DFEH Pay Reporting Portal at https://pdr.dfeh.ca.gov/.
SF Court Upholds California Emergency Standard
On February 25, a San Francisco Superior Court Judge declined to block California’s COVID-19 Emergency Temporary Standard (ETS), allowing the state to move forward with its workplace regulation. The judge said he, did not want to block “emergency public health orders intended to curb the spread of COVID-19, and the illnesses, hospitalizations, and deaths that follow in its wake.” The court stated that the plaintiffs opposing the ETS were unlikely to win their case and declined to issue an injunction blocking the standards. The California ETS is in effect through September 2021 and the federal OSHA in Washington, D.C. is scheduled to release its own national ETS by March 15.
Action on Paid Sick Leave Delayed
The Senate Budget Committee will no longer be considering COVID-19 paid supplemental sick leave as an early action budget item on Monday, February 22, 2021. While it has been temporarily pulled from the agenda, we are hearing that organized labor has been given assurances that it will be coming in the near future, specifically the next time a group of budget items move. The California Labor Federation is continuing to push for action on paid leave immediately. The withdrawal came after the California chapters of the NTMA and dozens of other business groups filed a letter in opposition to sweeping action. The letter, attached here, was coordinated by the California Chamber of Commerce and employer groups who are concerned about the expansion of mandatory paid sick leave and disruptions to operations without improving workplace safety.
Cal/OSHA Receives Public Comments on COVID-19 Emergency Temporary Standards
Cal/OSHA has concluded the Advisory Committee meetings on possible changes to the COVID-19 Emergency Temporary Standards (ETS) to prevent infection in the workplace. The discussion draft ETS released by the Advisory Committee makes changes to how an outbreak is triggered in the workplace as well as changing several definitions under the standard.
One issue discussed by the Advisory Committee, that was not included in the discussion draft, is the impact of vaccinated employees in the workplace and how vaccinations can be incorporated into the scope of the COVID-19 prevention regulations. As the ETS is currently written, when an instance of workplace exposure or a positive test occurs, all employees with COVID-19 exposure must be excluded from the workplace and provided with exclusion pay. The Advisory Committee is now evaluating how the exclusion procedures as well as other precautions required by employers to prevent the spread of COVID-19 should be altered if one or more employees has been vaccinated. The Advisory Committee did bring up some concerns due to the lack of concrete data on transmission of the virus from individuals who are vaccinated. The Advisory Committee will be accepting comments from the public through February 26, 2021, after which a formal proposed rule is expected to be released.
February 17 Update
LANTMA Supporting Cal Chamber Effort to Oppose Emergency Paid Sick Leave Supplemental.
The LA/NTMA will join forces with many other associations and businesses to oppose this legislation unless the Government is going to help pay for this effort versus having the entire burden fall on employers. You can read our letter of support here.
February 12 Update
Biden Administration Asks for Pause on CA Vehicle Emission Court Actions
Litigation has been paused by a federal appeals court in Washington D.C. on the Trump Administration’s rule revoking California’s authority to set its own vehicle emissions standards, following a request from the Biden Administration.
The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule’s “One National Program Rule,” issued by the Trump Administration in September 2019, withdrew the waiver provided to California to regulate vehicle greenhouse gas emissions and to implement a zero-emission vehicle program under the Clean Air Act and gave the federal government the sole authority to set emission standards. Shortly after California and numerous other states filed suit against the National Highway Traffic Safety Administration (NHTSA) and the Environmental Protection Agency (EPA).
The U.S. Court of Appeals for the D.C. Circuit granted an order from the Biden administration on February 8, 2021, to stay litigation in the cases on the waiver until further notice while the new administration reviews the Trump administration’s actions.
Organized Labor Seeking to Extend Emergency Paid Sick Leave
Labor organizations in California are circulating a letter to legislative offices asking for the approval of a proposal to extend COVID-19 specific emergency paid sick leave, which expired on December 31, 2020, as an early budget action item. The letter does not specify if they are seeking to extend the timeline to use the originally granted 80 hours of emergency paid sick leave or require an additional 80 hours of emergency paid sick leave.
The Federal Family First Coronavirus Response Act (FFCRA) and California’s AB 1867 required employers to provide up to 80 hours of paid sick leave and while the COVID response bill passed by the U.S. Congress in December extended the ability for employers to claim a payroll tax credit for providing the emergency paid sick leave through March 31, 2021, it did not extend the requirement to provide leave. While it is unclear at this time regarding the willingness of the legislature or the Governor to support this proposal, many local governments have already taken action to continue their local supplemental sick leave ordinances such as the City of Oakland; Los Angeles County; the City and County of San Francisco; and the City and County of Sacramento.