Businesses ponder the cost of extending Covid sick pay

Covid case snapshot

As of Sept. 6:

• Sonoma County has had 105,162 confirmed cases.

• Napa County 31,799 confirmed cases.

• Marin County 44,394 confirmed cases.

• Solano County 103,457 confirmed cases.

• More than 10.3 million people in the state have reported testing positive for the virus.

• Between July 5-Aug. 29 the daily average number of cases was 7,071 in the state.

• On average in California 30 people die every day from Covid.

• Statewide Covid death toll is 94,351.

Source: California Department of Public Health

Even with the state offering grants to some businesses to help pay for It, a bill on the governor's desk extending employee Covid-related mandated sick leave to year's end is not being greeted with applause by some in the business community.

“It’s hard to imagine these types of laws will be sustainable on small businesses going forward,” said Karen Alary, managing partner of Santa Rosa-based The Personnel Perspective.

The Personnel Perspective is a management consulting firm specializing in human resources, leadership development and training, and recruiting; with clients throughout the Bay Area and beyond.

Passing Assembly Bill 152, the Legislature voted to continue the mandated sick leave for Covid, which has been state law since Jan. 1. It awaits a decision by month’s end by Gov. Gavin Newsom whether to sign or veto it. The idea leaves some weighing concern from employees versus the bottom line.

“Like other laws before this we want to keep sick employees home and with a paycheck and income,” Alary told the Business Journal. On the flip side, she added, “To some businesses this is hitting them very hard.”

Even though daily case numbers and deaths from Covid-19 rarely make headlines, plenty of people continue to contract the deadly virus. As of early September the state reported Sonoma County was averaging 74 Covid cases a day, Napa County 17, Marin County 31, and Solano County 75.

Changes to the legislation

As a new part of the proposed extension, the Legislature added a provision allowing companies with 26 to 49 employees to apply for a grant to reimburse them for some of the costs of the sick pay. Experts say this is a boon because these paid sick days might not be in a company’s original budget. Covid time off could also go beyond what an employee would normally be entitled to.

GO Biz, short for Governor’s Office of Business and Economic Development, will oversee the grant program for small businesses and nonprofits.

“Small businesses are the backbone of our economy, so any relief we can give them is good. The GO Biz program allowing them to get a grant to help support them in that paid sick leave is well received as long as the application is not onerous. A lot of time these very small businesses don’t have the bandwidth to apply for the money, which is really sad,” Joanne Webster, president and CEO of the San Rafael Chamber of Commerce, told the Business Journal. She is also co-chair of Marin Council of Chambers, which is comprised of the 11 chambers of commerce in Marin County.

Some of the entities not qualifying for the grant include sole proprietors, businesses or nonprofits without a physical presence in the state, governments, financial institutions, and cannabis enterprises.

The largest sum a company could apply for is $50,000.

Individual employees could be awarded up to 80 hours in supplemental sick pay. That total is cumulative from Jan. 1. At most the bill says an employer will have to pay $511 a day to a single employee, with a total of $5,110. All is based on the person’s regular rate of pay.

The additional sick time kicks in if a family member of a worker tests positive, too.

Under the extended statute employers can also request proof of positive Covid tests before the sick pay is awarded.

Opinions about the law

“I see the pros and definitely see the cons to it,” Tawny Miranda, human resources manager at Eagle Vines Vineyard & Golf Club in American Canyon, said of AB 152. “It will continue to affect us as long as it’s in effect.”

She said a few of the Napa County club’s 60-plus employees have used the Covid sick leave. Because of the number of employees at Eagle Vines it won’t be able to apply for a grant going forward.

Miranda admitted the unbudgeted expense was noticeable, but added it was not problematic.

“We are a privately owned company. Fortunately, our owners are financially stable so we were able to absorb the brunt of the hit,” she said without revealing numbers.

Jordan Shields with Arrow Benefits Group in Petaluma isn’t surprised lawmakers extended AB 152, but he also isn’t sure it was warranted.

“Given the limitations upon qualifications it doesn't seem to have applications to most people. It seems to affect non-telecommuting employees,” the partner in the Sonoma County-based health benefits group said.

He likes that employers will have to document positive test results, but he believes the law should have gone further so workers had to prove they could not telecommute while contagious or recovering.

Shields also questions why a large swath of companies—those with 50 or more employees—are left out of the grant process.

“This is a lot of noise about a lot of nothing,” is how Shields summed up the law.

Labor attorney Lisa Ann Hilario, a partner with Spaulding McCullough & Tansil law firm in Santa Rosa, also was not surprised by the extension of AB 152 because of how contagious the latest variants of the virus have been. She would not speculate on whether she foresees the law being extended again to cover some or all of 2023, saying it all depends on what the virus does.

“If you are looking at it from an employer’s perspective, it is one more hoop you have to jump through after almost three years of very trying times,” Hiolario told the Journal. “However, keeping people out of the workplace who are sick is good for employees and employers. If you get other employees sick, it will have a larger impact on a business than one person who is out.”

With that said, she noted, “Employers in California are hit with a lot of laws that employers in other states are not. It’s just one more aspect that makes doing business in California very challenging.”

Covid case snapshot

As of Sept. 6:

• Sonoma County has had 105,162 confirmed cases.

• Napa County 31,799 confirmed cases.

• Marin County 44,394 confirmed cases.

• Solano County 103,457 confirmed cases.

• More than 10.3 million people in the state have reported testing positive for the virus.

• Between July 5-Aug. 29 the daily average number of cases was 7,071 in the state.

• On average in California 30 people die every day from Covid.

• Statewide Covid death toll is 94,351.

Source: California Department of Public Health

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