Deal aims to revive sick pay for COVID
New state law would restore tax credits to businesses that must carry the cost of paid time off for workers.
SACRAMENTO — Gov. Gavin Newsom and state lawmakers reached an agreement Tuesday to again require employers to provide workers with up to two weeks of supplemental paid sick leave to recover from COVID-19 or care for a family member with the virus.
The legislation, which lawmakers would likely fasttrack to the governor in the coming weeks, would apply to all businesses with 26 or more employees.
A similar law from 2021 that provided 80 hours of supplemental paid sick leave expired Sept. 30.
Labor unions pushed the proposal at the Capitol as California grapples with the rapid spread of the Omicron coronavirus variant. State officials hope the deal will encourage workers who have contracted the virus to stay home and help slow transmission.
Companies across California would have to absorb the costs of additional paid time off for workers. In an attempt to help some of these businesses, the agreement includes separate proposals to restore tax credits that were suspended and capped two years ago, when state officials feared that the pandemic would cause the collapse of California’s economy.
“By extending sick leave to front-line 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,” Newsom, Assembly Speaker Anthony Rendon (D-Lakewood) and Senate Pro Tem Toni Atkins (D-San Diego) said in a statement. “We will continue to work to address additional needs of small businesses through the budget — they are the backbone of our communities and continue to be impacted by COVID-19.”
The proposal would require employers to provide up to 40 hours of f lexible paid leave to full-time workers who are sick or caring for an ill loved one; to qualify for an additional 40 hours of paid time off, workers would have to provide proof of a positive coronavirus test.
Part-time workers would be eligible for sick leave equal to the number of hours they typically work in a week or twice that amount with a positive test.
Under the deal agreed upon Tuesday, the sick leave would be retroactive to cover coronavirus-related absences since Jan. 1 and would extend until Sept. 30. That provision is likely to be especially helpful to workers since cases linked to the Omicron variant have surged over the past several
weeks, increasing interest in ensuring that sick employees are able to take time off.
Last year’s paid leave plan did not require a positive test to use all of the benefit. When it expired in September, workers were left with a state minimum of three paid sick days.
Labor groups have been lobbying to add back additional days for this year, arguing that three days is not enough time to recover or to quarantine and forces lowwage workers to chose between going to work sick or falling behind on paying bills.
“California’s unions are fighting tooth and nail to ensure that no worker has to choose between going to work sick or feeding her family,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation. “The labor movement supports the proposal announced by the governor and legislative leadership to extend COVID paid sick leave, providing muchneeded relief to essential workers and their families. Not only does this measure protect workers, it’s vital to tamping down the surge and keeping schools and businesses open.”
The paid time off allows parents to stay home from work when their children are sent home from school due to illness or after being exposed to COVID-19. The Omicron variant has been spreading rapidly through schools over the past three weeks after students returned from winter break.
Employees could use up to three days of the sick leave to attend a vaccination appointment for themselves or a family member and to recover from any symptoms after vaccination — a provision intended to make it easier for parents to immunize their children against the virus.
Workers in the state first qualified for an additional two weeks of COVID-related sick leave in 2020 through a combination of state and federal laws and tax credits.
“This supplemental paid
leave is what has allowed workers to stay home while sick and keep sick children at home without having to worry about being fired or losing their income,” said Katherine Wutchiett, a staff attorney at San Francisco’s Legal Aid at Work.
During the first two years, workers in the state did not have to show a doctor’s note or positive COVID-19 test result in order to access paid leave, a policy that allowed for necessary flexibility during the pandemic, Wutchiett said.
“People need COVID leave for so many reasons
right now — for themselves, for vaccination or to care for kids who are sent home following an exposure or school closure,” she said.
Business interests at the Capitol lobbied for the requirement of a positive test to qualify for 40 additional hours as insurance that workers do not take more time than they need. The test could be taken by the worker or by a family member in their care.
“Businesses have invested hundreds of millions of dollars to keep employees and customers safe through the pandemic,” said Rob
Lapsley, president of the California Business Roundtable. “While we still need to see the details for this new sick leave policy, the reality is that this is yet another expense paid for by the business community, which is struggling to recover from the recession. This new and expensive mandate is on top of existing COVID exclusion pay, increased testing and increased masking — all paid for by employers without any existing support from the state.”
The agreement between lawmakers and the governor includes several proposals
Newsom introduced earlier this month under his 2022-23 budget plan that might help some businesses as they shoulder the cost of providing sick leave to workers.
The agreement would restore net operating loss deductions for corporate and individual taxpayers with business income of $1 million or more; the deduction had been paused for tax years 2020, 2021 and 2022. Additionally, the state would lift a $5-million limit on several other business tax credits for the same tax years.
The governor’s budget also calls for tax conformity
with federal grant programs that helped keep restaurants afloat during the pandemic and provided assistance to venues that were forced to shutter.
Lawmakers agreed to another Newsom budget proposal that called for the state to quickly authorize $1.4 billion for testing, vaccinations and COVID-19 response in state prisons. Newsom’s advisors said the governor is asking the Legislature to increase that funding by $400 million and to authorize an additional $600 million for COVID-19 response as needed.