Good morning, welcome to my latest edition of my Monday Morning Briefing. Congratulations to the Los Angeles Rams, the home team, and to the Cincinnati Bengals, the official underdog of the year, for giving us two new fresh QB faces for this year’s Super Bowl in brand new SoFi Stadium in two weeks.
California COVID Pay is Making a Come Back for 2022 – But Not Quite Yet
Well, I gave you one week without any real new COVID related updates, anyway. This past week, Governor Newsom and state lawmakers announced that they had reached an agreement in principle to reinstate California’s Supplemental COVID pay. The previous law, which had required California employers provide 80 hours of pay for COIVD related absences, expired last September 30, 2021.
The new COVID pay, COVID pay Part Deux, is due to have some interesting twists and turns. The new law covers employers of 26 or more employees. First off, employees can get up to 40 hours of leave, and can receive an additional 40 hours, if necessary, with proof of an actual positive COVID test (note that under the isolation/quarantine rules, these timelines are dramatically reduced now). It’s unclear from the summaries, but it appears that there is no separate pay set aside for vaccination pay, and that the law presumes that employees can use existing state and local sick pay for this purpose.
Most important – California is looking to have these payments offset by state taxes, much like how the FFCRA worked with federal tax credits in 2020. Also, while this COVID-22 is not even final law yet, the plan is for this new COVID pay to be retroactive back to January 1, 2022, and extend once again through to September 30, 2022.
Sacramento is still applying the finishing touches, so stay tuned. Remember, once final, the accrual balance for COVID-pay must be reflected on your wage statements/paystubs, just like California or local sick pay. Failure to designate the accurate amount of available COVID pay and sick pay on your paystub is a violation of the California Labor Code and can subject you to a class action or PAGA lawsuit! (this is a side issue, but a VERY IMPORTANT ONE!) If you are not 100% sure that your paystubs show your running sick leave balances, run, do not walk, and confirm this TODAY.
A Follow Up On Regular Rate of Pay
I was so impressed that so many of you paid attention to my discussion on regular rate and reached out with questions. It did remind me of an important point which many of you raised. Under the Fair Labor Standards Act (FLSA), the regular rate includes “all remuneration for employment paid to, or on behalf of, the employee.” However, the FLSA also goes on to provide a detailed list of payments that can be EXCLUDED from the regular rate when calculating overtime (and in California, break pay, sick pay, etc). Not all of the following has been blessed by California law, but most of it has been. These types of exclusions include payments for (1) true gifts (like a holiday or anniversary gift), (2) payment for non-work pay, like holiday or vacation time, or break pay, (3) reimbursement for tools, business supplies or expenses, (4) employee discounts, (5) wellness programs or EAPs, (6) parking benefits, (7) profit-sharing and employer contributions to benefit plans.
Federal and state law technically also exclude “discretionary bonuses” that are not made according to any contract, agreement or promise causing the employee to expect the payments regularly. The way this has been interpreted, if you have any kind of a bonus program that pays out in any form or fashion on a regular basis, even if you have discretion to pay or not pay a sum certain, that bonus better be included in the regular rate. I don’t care if you have total discretion on how you get to the numbers. My bottom line – If you are paying out a bonus with any kind of consistency, include it in the regular rate or call me and try to convince me why you aren’t doing it.
Okay, next week if we have time, I want to talk about ADA-website cases. We are still seeing them being filed. If you know what I am talking about and KNOW your website is compliant with the specific criteria required in these cases, great. If you are reading this and thinking “what the ___ is she talking about?,” we need to catch you up. I know; it’s always something.
Congratulations, you’ve made it to the end of January. Yes, only January. Keep breathing.