California Legislature OKs expansion of paid sick leave for about 10.4 million workers

SACRAMENTO, Calif. - The California Legislature on Thursday voted to expand paid sick leave for about 10.4 million workers, sending a bill to Gov. Gavin Newsom that mandates up to two weeks of paid time off for things like having coronavirus symptoms, scheduling a COVID-19 vaccine or caring for a child who is doing school at home.

The bill, if it is signed into law, applies to companies with at least 25 employees. The rules would expire on Sept. 30, but are retroactive to Jan. 1. Some companies would have to pay their workers for time off they have already taken.

But many companies can get that money back from the federal government. The federal government offers companies a payroll tax credit of up to $511 per day for each employee that takes the paid sick leave. The tax credit is enough to cover workers who make $60 an hour or less, according to Democratic state Sen. Nancy Skinner, the bill’s primary author.

But it only applies to companies with more than 500 employees.

"The absolutely best way to contain the spread (of the virus), beyond the fact of wearing masks as we are and keeping our distance, is to ensure people who have COVID or who are asymptomatic with COVID are not going to work," Skinner said.

While California has gotten billions of dollars in federal coronavirus aid in the past year, the state’s Democratic-controlled Legislature has been adding to that in recent weeks. State lawmakers have OK’d more than $14.2 billion in aid for businesses, schools and individuals while redirecting some federal stimulus dollars to pay off unpaid rent for struggling tenants.

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The money has come from a significant state surplus, estimated at about $15 billion, which will soon be augmented by an another $26 billion in federal aid.

But California’s small businesses have not fared as well while weathering multiple government-ordered shutdowns throughout the ups and downs of the pandemic. Small business revenue is down 29% since January 2020, while the number of small businesses open has fallen by more than 34%, according to data from Opportunity Insights, an economic tracker based at Harvard University.

"At a time when California is flush with cash, policymakers should not ask employers to become the state’s social safety net," said Jennifer Barrera, executive vice president of the California Chamber of Commerce, who opposed the bill.

Businesses were particularly concerned about the rules applying retroactively, with the Chamber of Commerce calling it "an administrative nightmare" for employers who did not keep track of the reasons why an employee took time off from work.

"This is a horrible, horrible piece of legislation," said Sen. Shannon Grove, a Republican from Bakersfield.

California has been generous to businesses lately, approving more than $2 billion in grants for small businesses that don’t have to be paid back. They’ve also waived millions of dollars in licensing fees for businesses. And lawmakers are still negotiating a bill that would offer businesses $2.3 billion in tax breaks.

Still, the bill was a tough vote for some moderate Democrats seeking a balance between helping small business owners and the people they employ.

"To add more burdens to small businesses, this is another big blow right now and so I was torn on this," said Sen. Dave Min, a Democrat from Irvine who voted for the bill. "On the other hand, it is good policy. We don’t want sick workers coming into work or facing that tough decision between missing a paycheck and losing their jobs."

Other Democrats lamented the limitations of the bill. Sen. Maria Elena Durazo said the bill wouldn’t apply to about 4 million workers because they work for companies with fewer than 25 employees. State Employment Development Department data shows about 90% of employers have less than 20 employees, she said.

"Essential workers are being left out," she said.

Companies with fewer than 25 employees can offer the paid leave and claim the federal tax credit. But they would not be required to do so under the bill.

Newsom has not said whether he will sign the bill into law. But he signed a similar law last year that expired on Dec. 31.