Effective immediately, most California businesses with more than 500 workers nationwide must comply with AB 1867. This “urgency statute” mandates up to 80 hours of paid sick leave for reasons related to COVID-19 illnesses.

The law’s intent is to cover California businesses and workers outside the ambit of the Families First Coronavirus Response Act’s paid sick leave provisions. That federal law applies only to employers of fewer than 500 employees.

AB 1867 is effective as of September 19. It requires covered employers to take certain administrative actions to comply, including distributing notices and making payroll changes. Here are the main provisions.

Covered Businesses and Workers

AB 1867 in part codifies Governor Gavin Newsom’s Executive Order N-51-20, which applied only to specific food-related industries and workers.  The new law covers most private sector businesses with 500 or more workers.  The new law defines covered businesses as “hiring entities,” rather than “employers.” The term is defined broadly to capture “gig economy” companies that may argue workers are “independent contractors.”

The FFCRA covers most public sector employers, but allows them to exclude certain health care workers and emergency responders. To fill the gap, AB 1867 covers public sector “ health care providers or emergency responders”  as defined under FFCRA regulations, if public sector employers exclude them from FFCRA sick leave.

Whether an entity has 500 employees nationwide is measured as of the day an employee requests time off.  Entities with close to 500 workers must assess whether FFCRA or AB 1867 applies, because the requirements differ.

Workers need not be employed for a certain period of time to be eligible. Apart from working for a covered “hiring entity,” the primary eligibility requirement is that the worker leaves “home or other place of residence to perform work for or through the person’s hiring entity.”  Therefore, teleworkers are not entitled to the leave benefit.

Reasons for Leave

Supplemental paid sick leave is available for three reasons: (1) a COVID-19-related quarantine or isolation order issued by a government body; (2) a health care provider “advises” the worker to “self-quarantine” or “self-isolate”; or (3) the hiring entity prohibits the worker from working due to concerns about potential transmission. Under the third criterion, for example, employers conducting health screenings must offer sick pay, if available, for time during which the employee is excluded from the workplace.

Amount of Leave

AB 1867 provides a maximum of 80 hours, or two full-time weeks, of paid sick leave. However, the statute includes special provisions allowing greater leave for certain firefighters.

With respect to part-time workers, those who work irregular schedules under 40 hours per week, or who have not worked for the hiring entity for long, the law includes several different methods to calculate the leave entitlement.

This paid sick leave is separate and apart from California’s existing “Healthy Families” paid sick leave, as well as local sick leave ordinances. The entire amount of leave is immediately available for use.

Unlike the FFCRA, this law does not authorize hiring entities to ask workers for medical documentation. Workers may request the time verbally or in writing.  And, workers may decide how much of the available leave time to use.

Sick Pay

The law requires hiring entities to pay supplemental sick leave at the higher of state or local minimum wage, or at the worker’s “regular rate of pay” for the “last pay period,” presumably the pay period before the worker took sick leave. For firefighters, special rules may apply. However, as under FFCRA, supplemental sick pay is capped at $511 per day and a total outlay of $5,110.

Coordination

AB 1867 allows for the possibility that workers will have received supplemental sick leave under the Governor’s Executive Order, a local ordinance, or FFCRA.  The new law permits hiring entities to reduce the paid sick leave benefits conferred by AB 1867 to reflect any supplemental sick leave benefits awarded under these programs.

Similarly, employers voluntarily offering COVID-related, paid, sick leave after March 4, 2020, may “credit” that paid leave towards the obligations imposed under AB 1867. However, employers must retroactively pay any amount necessary to ensure the previously paid amounts were was as generous as AB 1867 mandates.

Other than the above, employers cannot “substitute” for supplemental sick leave other forms of paid leave, including standard paid sick leave or state disability benefits.  Nor may employers require workers to use other forms of leave before taking supplemental paid sick leave.

Notices and Enforcement

The State Division of Labor Standards Enforcement has issued model notices, which must be posted at worksites and/or distributed electronically for workers who are not reporting to a worksite. There are different notices for foodservice and non-foodservice workers.

Because AB 1867 incorporates existing paid sick leave provisions contained in Labor Code sections 246-249, employers must provide workers with their available supplemental paid sick leave balance every pay period.  Fortunately, the balance may be provided in a separate document, rather than on the periodic wage statement.

AB 1867 requires the Labor Commissioner to enforce the law. It does not appear the law creates a private right of action. It remains to be seen whether the Private Attorneys General Act will allow for private enforcement.

Sunset

The supplemental sick leave available under AB 1867 is scheduled to “sunset” on December 31, 2020. However, if Congress extends FFCRA’s paid sick leave applicable to employers of under 500 employees, AB 1867’s supplemental sick leave applicable to larger employers likewise will be extended.