AB 152 COVID-19 relief: Supplemental Paid Sick Leave

On August 27, Assembly Bill 152, authored by the Assembly Committee on Budget, was gutted-and-amended to provide supplemental paid sick leave. The bill would add and repeal Article 9.1 (commencing with Section 12100.96) of Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code, to amend Sections 248.6 and 248.7 of the Labor Code, and to amend Sections 17158 and 24312 of, and to add and repeal Article 8.1 (commencing with Section 19295.1) of Chapter 5 of Part 10.2 of Division 2 of, the Revenue and Taxation Code.

AB 152 would establish the California Small Business and Nonprofit COVID-19 Relief Grant Program within the Governor’s Office of Business and Economic Development (GO-Biz) to assist qualified small businesses or nonprofits that are incurring costs for COVID-19 supplemental paid sick leave. The bill would require GO-Biz to provide grants to qualified small businesses or nonprofits, as defined. The bill would repeal these provisions on January 1, 2024.

Current state law, until September 30, 2022, provides for COVID-19 supplemental paid sick leave for covered employees who are unable to work due to certain COVID-19 reasons and entitled a covered employee to 40 hours of COVID-19 supplemental paid sick leave. This provision would be extended to December 31, 2022.

This bill would provide that an employer has no obligation to provide additional COVID-19 supplemental paid sick leave if the employee refuses to submit the required tests. The bill would authorize an employer to require, if the diagnostic test is positive, the employee to submit to a second diagnostic test within 24 hours. Tests must be paid for by the employer.  This provision would be extended to December 31, 2022.

This bill would also extend to December 31, 2022 the COVID-19 supplemental paid sick leave for certain in-home supportive service providers and waiver personal car service providers who are unable to work due to certain COVID-19 reasons.

This bill would also exclude from gross income. for tax years beginning January 1, 2020 through December 31, 2029, any grant allocation received by a taxpayer under the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program.

Section 1 of the bill would add Article 9.1 to Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Governor Code. Article 9.1 would be titled, “California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program.”

The following terms would be defined: “advocate,” “applicant,” “California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program,” “CalOSBA,” “Director,” “fiscal agent,” “GO-Biz,” and “qualified small business or nonprofit.” A grant may be recaptured by GO-Biz if it determines that the grantee has failed to meet the criteria for a qualified small business or nonprofit.

The Program would be created within GO-Biz to be implemented by CalOSBA. The purpose of this program is to assist qualified small businesses and nonprofits that incur costs for COVID-19 supplemental paid sick leave. CalOSBA would allocate grants to qualified small businesses and nonprofits that meet specified requirements.

The grant moneys awarded would only be for reimbursement of COVID-19 Supplemental Paid Sick Leave between January 1, 2022 and December 31, 2022. Applicants would have to provide proof of employee payroll records that verify all the paid sick leave provided by the applicants. The grants cannot exceed the actual costs incurred for supplemental paid sick leave provided with a maximum grant per applicant of $50,000.

If state General Fund savings are achieved due to increases in federal funds, then the Department of Finance is required to increase the appropriation to this fund by up to $70 million. CalOSBA is required to conduct marketing and outreach for equitable awareness and the distribution of grants that include specified requirements. CalOSBA is required to report to the Legislature the number of grants and dollar amounts awarded for each of the eight categories.

This article would remain in effect until January 1, 2024 and then is repealed.

Section 2 of the bill would amend Labor Code Section 248.6 to provide that, if a diagnostic test is positive, then the employer may require the employee to submit to a second diagnostic test within 24 hours. It would also specify that the employer would not have to provide the additional paid sick leave if the employee refuses to submit to the required diagnostic tests. And, the current September 30 expiration date of the total amount of paid sick leave not exceeding 80 hours would be extended to December 31, 2022.

Section 3 of the bill would amend Labor Code Section 248.7 to extend the 80-hour paid sick leave limitation from September 30 to December 31, 2022.

Section 4 of the bill would amend Revenue and Taxation Code Section 17158 to provide that, for taxable years beginning on or after January 1, 2021, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program are not included in the definition of gross income.

Section 5 of the bill would add Article 8.1 to Chapter 5 of Part 10.2 of Division 2 of the Revenue and Taxation Code. Article 8.1 would be titled, “Collection of Recaptured California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grants.” The following terms are defined: “California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program,” “GO-Biz,” and “recaptured grant amount.”

GO-Biz would be required to provide the Franchise Tax Board a list of grantees and their recaptured grant amounts. The recaptured grant amount is payable to the State of California and must be collected from the grantee by the FTB. This article would remain in effect until December 1, 2030 and then is repealed.

Section 6 of the bill would amend Revenue and Taxation Code Section 24312 to provide that, for taxable years beginning on or after January 1, 2021, and before January 1, 2030, grant allocations received by a taxpayer pursuant to the California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program are not included in the definition of gross income.

Section 7 of the bill provides a severability clause. Section 8 of the bill contains a finding and declaration that the program serves the public purpose of preventing revenue decreases, closures, and higher unemployment across the state in the small business and nonprofit sectors due to the COVID-19 pandemic and does not constitute a gift of public funds.

Section 9 of the bill would appropriate $10,000 to the Labor Commissioner to implement the provisions of this act. Section 10 of the bill provides that this bill is related to the Budget Bill and would take effect immediately.