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Posted on February 10, 2022 | Employment Law
On Monday, February 7, 2022, California adopted a policy that should benefit most of the state’s workforce. This new legislation provides supplemental paid sick leave for as long as two weeks when an employee misses work due to COVID-19.
Since many individuals must work to make ends meet, regardless of whether they are ill, legislators hope this will be an incentive to stay home and avoid potentially spreading the coronavirus to others. Senator Nancy Skinner, among others, feels that this legislation may help stop the surge of cases brought on by the Omicron variant and maintain a safe workplace environment.
The state of California had a sick leave mandate throughout much of 2021, but it expired in September, leaving many with no choice but to go to work and risk exposing their co-workers to the COVID-19 virus. Labor unions spent months lobbying Governor Gavin Newsome and other legislators in hopes of getting this provision passed.
The 2021 law had a few flaws that opened the door for some to abuse the system, so members of the business community negotiated for new rules. This resulted in a new law that is very similar to the previous mandate, with the addition of several new provisions to avoid such snags.
California Labor Federation Secretary-Treasurer, Art Pulaski, feels that California is leading the nation in mitigating the spread of COVID-19 and protecting workers. He has stated that workers desperately needed the paid sick leave due to the very contagious Omicron variant and that the legislature and governor acted urgently to meet their needs.
In addition to the paid COVID-19 sick leave, lawmakers also passed several bills related to state-imposed business tax limits that were put in place at the beginning of the pandemic. These laws aim to provide relief to businesses by releasing $1.9 billion from the state budget to meet COVID-19 emergency needs such as hospital surges, vaccinations, and testing.
Millions of workers could benefit from the new legislation, as it applies to all employees of companies that have at least twenty-six people on payroll. The law mandates paid time off for the following individuals:
The other legislation that passed gives companies the ability to require employees to show a positive COVID-19 test if they need more than the initial 40 hours off to recover. Time off for employees to receive a COVID-19 vaccine or recover from side effects related to the immunization is limited to 24 work hours, or three days. These measures satisfy the interests of the business leaders who negotiated with legislators on the provisions.
According to the president and CEO of the California Chamber of Commerce, Jennifer Barrera, companies in California are using these measures in a positive way, accepting the burden of paid time off to contribute to the protection and health of the greater public. The legislation will be retroactive to January 1, 2022, when the governor signs it and will remain in effect until September 30, 2022.
There were strong opinions on both sides of the decision to enact the mandate, including those of Assembly Member Vince Fong. His vote against the measure was based on his belief that it would be harmful to small businesses. He would have preferred that California offer a new exemption or tax credit for businesses to offset the cost of the paid sick leave mandate for companies, as the tax credits offered by the federal government expired in 2021. Representative Fong felt that the new legislation was rushed. From his perspective, it warranted a great deal more discussion and debate, stating his belief that the additional costs of the law will further burden current business difficulties.
The agreement between the legislature and the governor includes related proposals in last month’s 2022-2023 budget plan, in which Governor Newsome aims to renew suspended tax credits that ended in 2020. These measures were dropped due to fears the state’s economy would be damaged as a result of the pandemic.
Deductions for net operating loss were halted two years ago for both individual taxpayers and corporations whose income from business exceeded $1 million in the tax years between 2020 and 2022. The lawmakers passed an additional bill on February 7, 2021, to end this suspension a year ahead of time.
On top of the paid sick leave and suspension of this tax credit, a $5 million cap was removed on many other tax credits for businesses. This cap would have been in place through the current year, but the new bill allows companies access to a refund for any figures beyond the cap that they were unable to use in the previous two years. As an alternative, businesses are now given the option to apply the unused credits to their tax burden through 2027.
Many types of businesses stand to benefit from the new legislation, as it offers tax conformity in the state with federal Shuttered Venue Operators and Restaurant Revitalization Fund grants. Funds from these programs have helped bars, restaurants, and other businesses through their COVID-19 struggles.
In the deal the lawmakers passed, $1.9 billion is also allotted for the state’s COVID-19 emergency fund. $1.6 billion of this figure goes towards information technology, vaccine administration and distribution, COVID testing, state response, hospital surge, and contact tracing offered by the Department of Public Health. The California Department of Corrections and Rehabilitation will also receive $205.5 million to increase testing, mitigate exposure, and provide healthcare for inmates affected in state prisons.
If the new law affects you as an employee, and you feel that you were not provided the benefits you are entitled to, your legal advocates at The Law Office of Omid Nosrati are here for you. Visit our website today to see how we can help.