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California Offers Guidance on Wage and Hour Issues and COVID-19

Complying with California’s wage and hour rules can be hard in ordinary times. Now, along with the many challenges that the COVID-19 emergency poses, California employers may face new situations and issues. The California Labor Commissioner offered some notable guidance with its interpretation of various issues that may arise during the current emergency. Along with some other notes, this guidance warrants attention, especially on paid sick leave issues.

California Paid Sick Leave

More recently, most focus has been on the new federal paid sick and emergency family and medical leave, now available through the Families First Coronavirus Response Act (FFCRA). However, for several years, California already had its own paid sick leave mandate. As the Labor Commissioner noted, an employee must be allowed to use available California paid sick leave for illness related to the COVID-19 virus and be compensated at the rate that California law requires. The same requirements also would apply to Paid Time Off (PTO) provided in lieu of separate paid sick leave.

The Labor Commissioner reminded employers that California paid sick leave may be used for absences because of illness, diagnosis, care, or treatment of an existing health condition, as well as for preventative care, for the employee or certain family members. The family members for whom an employee may use paid sick leave include a child or stepchild (regardless of age or dependency status), spouse, registered domestic partner, parent or stepparent of an employee’s spouse or registered domestic partner, grandparent, grandchild, and sibling.

Significantly, in the Labor Commissioner’s view, preventative care under California’s paid sick leave law may include “self-quarantine as a result of potential exposure to COVID-19 if quarantine is recommended by civil authorities.” The agency also identified other situations that possibly may qualify for paid sick leave use under the law as including “where there has been exposure to COVID-19 or where the worked has traveled to a high-risk area.”

If an employee does not qualify to use paid sick leave or does not have any paid sick leave available, the Labor Commissioner noted that other paid leave (e.g., vacation or floating holidays) may be available under an employer’s policy. But, as the Labor Commissioner also noted, the use of such other paid leave depends on whether the employer’s policy allows for use of such paid leave in the particular circumstance (or, as in some cases, the law otherwise may allow the employee to use it).

Can an employer require an employee to use paid sick leave for an absence? Here, the Labor Commissioner said no. Using the example of a quarantined employee, the agency stated that an employer cannot require the employee to use or exhaust paid sick leave because “that is the worker’s choice.” This position thus would require an employer to allow an employee who cannot work, or who needs to be off work for covered reasons, to let an employee be absent without pay – a position seemingly inconsistent with the fact that California law entitles an employee “to paid sick days” and protects an employee for “using accrued paid sick days.” (Cal. Labor Code § 246(a)(1), § 246.5(c)(1), italics added.) If the employee chooses to use paid sick leave, California law allows the employer to require a minimum use of at least two hours. Otherwise, the agency reiterated its position that “[t]he determination of how much paid sick leave will be used is up to the employee.”

The Labor Commissioner did not address the FFCRA. Importantly, though, the new federal paid sick leave under the FFCRA is in addition to paid sick leave that California state law or local ordinances require, or that an employer provides under its policies. Several local jurisdictions in California, including San Francisco, Los Angeles, San Diego, Oakland, and Berkeley, have their own paid sick leave ordinances that differ in some ways from California’s state law. The FFCRA’s paid sick leave also differs, including in its qualifying uses and the required rates of pay. The federal FFCRA also provides that it is the employees’ choice – not the employer’s – with respect to which type of paid leave the employee may wish to use or to use first.

Employee Absences for Closed School or Day Care

The FFRRA allows for emergency family and medical leave under federal law for when an employee must miss work to care for a child whose school or daycare closed because of COVID-19. As the Labor Commissioner noted, California has its own law protecting a certain amount of leave for employees who must be absent for these same reasons.

California Labor Code section 230.8 allows an employee, who works for an employer with 25 or more employees at the same location, to take up to 40 hours a year for school- or childcare-related activities, as well as to “address a child care provider or school emergency.” In addition to parents, the law also covers stepparents, foster parents, and grandparents. An “emergency” that the law covers includes “[c]losure or unexpected unavailability of the school or child care provider” and a “natural disaster.” The Labor Commissioner determined that “the closure of a child’s school or daycare by civil authorities” falls within the law so that an absence to care for a child in the current COVID-19 emergency qualifies an employee for at least 40 hours of protected law.

Leave under this law is unpaid. But, an employer can require that an employee use accrued and available vacation, PTO, or other types of paid leave other than paid sick leave. The Labor Commissioner noted that some of these absences also may qualify for use of paid sick leave, such as to be with a child as preventative care. Again, though, the agency emphasized its view that employers “cannot mandate that employees use paid sick leave.”

Reporting Time Pay

California is one of a few states requiring that employees be paid for a certain minimum amount of time if the employee reports to work and the employer sends him or her home early. The Industrial Welfare Commission wage orders generally require payment of at least half of the scheduled shift, with a minimum of two hours and a maximum of four hours. Reporting time pay does not apply when “[o]perations cannot commence or continue . . . when recommended by civil authorities.”

According to the Labor Commissioner, reporting time pay requirements still may apply under the current state of emergency declarations. It only does not apply if the declaration “include a recommendation to cease operations.” As a result, employers do not owe reporting time pay if they send employees home under an order to close. Otherwise, if allowed to continue operations, employers still must consider whether they may owe reporting time pay if they do not put employees to work or send them home early for lack of work. As a further note, employers who expect employees to work less during the emergency should schedule employees for shorter shifts in the first instance.

Paying Salary to Overtime Exempt Employees

Finally, the Labor Commissioner addressed salary pay requirements for overtime-exempt employees. This issue is important in light of the fact that exempt employees also may work less during this time, either because of a lack of work or for personal reasons.

California generally follows the federal Fair Labor Standards Act salary basis test for an employee to qualify as overtime-exempt. Thus, an employee must pay an exempt employee who performs any work in a workweek his or her full salary for the workweek, as long as any absence or missed time during part of the week was because the employer failed to make work available. On the other hand, an exempt employee who performs no work in a workweek is not due any salary for that workweek.

Further, according to the Labor Commissioner, an employer cannot take deductions from salary for partial-day absences “for personal reasons or for sickness.” Thus, if an exempt employee “works any portion of a day, there can be no deduction from salary for a partial day absence for personal or medical reasons.” Deductions may be taken from an employee’s available paid leave, including paid sick leave, for partial-day absences. Here, though, the Labor Commissioner did not address whether an employer can require the use of paid sick leave, which, as discussed above, the agency takes the position otherwise cannot be done.

An employer may reduce an employee’s salary in full-day increments when an exempt employee is absent for one or more full days “for personal reasons other than sickness and accident, so long as work was available for the employee, had they chosen to work.”

A final important point that the Labor Commissioner did not address is California’s minimum salary amount. Even when an employer pays an employee less in salary as allowed, in order to preserve the overtime exemption, the employer still must pay the exempt employee enough in salary for each month to satisfy California’s minimum monthly salary rule. At twice the state minimum wage for employees with more than 25 employees, that minimum monthly salary currently is $4,506.67, or $4,160 for employers with 25 or fewer employees.

Takeaways

Especially at this time, California employers faced with questions concerning paid sick leave, the FFRRA, reporting time, or other wage and hour issues, should consult with counsel as they consider how best to comply with applicable federal and state requirements.

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