Employment Law Alert: San Jose Adopts New COVID-19 Paid Sick Leave Ordinance

On April 7, 2020, the City Council of San Jose adopted the COVID-19 Paid Sick Leave Ordinance (the “Ordinance”), which became effective immediately and will remain in effect through December 31, 2020. San Francisco’s Board of Supervisors has also adopted an emergency paid sick leave ordinance that is awaiting signature by the Mayor.

San Jose’s new ordinance applies to all employers covered by the San Jose Minimum Wage Ordinance (i.e., employers subject to the Business License Tax or that maintain a facility in the City) that are also not required-in whole or in part-to provide paid sick leave benefits under the federal Emergency Paid Sick Leave Act (“EPSLA”). The Ordinance would generally apply to employers with 500 or more employees. However, employers with fewer than 500 employees may also be covered under the Ordinance to the extent they come under any of the EPSLA’s applicable exemptions.

The Ordinance exempts from its coverage employers that already provide their employees, on the effective date of the Ordinance, with some combination of paid personal leave at least equivalent to the emergency paid sick time required by the Ordinance. An employer that provides some combination of paid personal leave less than the paid sick time required by the Ordinance is required to comply with the Ordinance to the extent of such deficiency.

Employers subject to the Ordinance must provide paid sick leave benefits to employees who leave their residence to perform Essential Work as defined in the Santa Clara County Public Health Officer’s Shelter-in-Place Order (“Shelter Order”). The Ordinance explicitly provides that the requirement to provide emergency sick leave does not apply to employees who can work from home. Confusingly, the Ordinance refers to the March 16, 2020 Shelter Order rather than the March 31, 2020 Shelter Order, which superseded the earlier order and includes a more restrictive list of essential work activities and services for which an employee may leave his or her residence to perform.

The Ordinance covers employees who have worked two hours or more within the geographic boundaries of San Jose for a covered employer.  Full-time employees are entitled to 80 hours of paid sick leave.  Part-time employees are entitled to sick leave hours equal to the number of hours they work on average over a two-week period.

An employee can use emergency paid sick leave for any of the following purposes:

(1)  The employee is subject to quarantine or isolation by federal, state or local order due to COVID-19, or is caring for someone who is quarantined or isolated due to COVID-19.

(2) The employee is advised by a health-care provider to self-quarantine due to COVID-19 or is caring for someone who is so advised by a health-care provider.

(3) The employee experiences symptoms of COVID-19 and is seeking medical diagnosis.

(4) The employee is caring for a minor child because a school or daycare is closed due to COVID-19.

Employers must pay employees for use of emergency sick leave for personal reasons at the employee’s regular rate of pay, up to $511 a day not to exceed an aggregate of $5,110. Employers must pay employees using sick time to care for another person at the rate of at least two-thirds of the employee’s regular rate of pay, up to $200 a day not to exceed an aggregate of $2,000. Notably, unlike the federal EPSLA, no tax credits are available under the Ordinance.

For a part-time employee, the amount of paid sick leave used is calculated based on the average number of hours the employee worked per day during the six months immediately preceding the effective date of the Ordinance. If an employee has worked for the employer less than six months, then the employer must calculate the amount of sick leave used based on the average hours the employer expected at time of hire to have the employee work.

Under the Ordinance, an employer cannot require an employee to find a replacement as a condition of using sick leave. An employee is not entitled to carry over sick leave at the end of the year and is not entitled to be paid for unused sick leave. The Ordinance provides that unused sick leave will not be available after December 31, 2020, and ceases to exist.

The Ordinance provides that the San Jose Office of Equality Assurance can establish reasonable requirements to inform employees of their rights, including requiring employers to post notices, and may implement and enforce the Ordinance.

We recommend that employers immediately prepare new policy publications to supplement their employee handbooks to comply with the Ordinance. Such policy supplements should include discussion on how the emergency sick leave integrates with other paid leave/benefits and pay rates (including whether the employer will utilize any of the caps on pay rates). Employers should continue to monitor further developments as to this Ordinance, including any required postings and any guidance from the City as to interpretation and implementation of the Ordinance.