California workers would get up to two weeks of paid time off if they get sick from the coronavirus while businesses would get up to $6 billion in tax cuts and other assistance under a proposal endorsed Tuesday by Gov. Gavin Newsom and the state’s top legislative leaders.
California had a similar law in place last year, but it expired in September as the spread of the virus slowed significantly. But since then, a more contagious version of the virus has spread quickly through California and the rest of the world. Labor unions—major donors to Democratic politicians in California—have pressured state officials to bring the paid sick leave law back.
Business groups have opposed the extra sick leave as many industries are already struggling to retain workers during the pandemic. Last year, businesses could get a federal tax credit to offset some of the costs. But that tax credit is not available this year.
Instead, Newsom and legislative leaders have agreed to end some tax increases on businesses. These tax increases were imposed in 2020 at the start of the pandemic when state officials feared they were headed toward a major budget deficit. Instead, state revenues have soared during the pandemic.
Those tax increases were scheduled to expire at the end of this year. Now, Newsom and legislative leaders have agreed to end them one year early. They’ve also agreed to spend more money on a state grant program for businesses and not charge state taxes on some federal grants. It all adds up to about $6 billion for businesses.
The proposals were announced Tuesday by Newsom and the state’s top two legislative leaders: Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon, both Democrats. The Legislature still has to approve the proposals before they could become law. But endorsements from the state’s top Democrats ensure it will pass, as Democrats hold large majorities in both chambers.
“California’s ability to take early budget action will protect workers and provide real relief to businesses reeling from this latest surge,” Newsom, Atkins and Rendon said in a joint statement.
The proposal calls for workers to get one week of paid time off. Workers would get a second week off if they or their family members test positive for the virus. Companies would have to provide the coronavirus test and pay for it. Workers who either refuse to be tested or won’t share the results with their employers would not get the extra week off.
“We know we can’t wait for employers to keep us safe—we have to advocate for ourselves, and Governor Newsom and legislators listened,” said Bob Schoonover, president of the California chapter of the Service Employees International Union. “SEIU members feel proud to have been a part of this critical decision that protects our communities.”
The proposal would only apply to companies with at least 26 workers. If it becomes law, it would expire in September, as business groups have pushed for any sick leave law to be limited in duration.
Jennifer Barrera, president and CEO of the California Chamber of Commerce, said businesses “are committed to the safety of their employees and the workplace.”
“But elected leaders must ensure a balanced policy so that private sector employers, who are also struggling to remain afloat during these surges and the broader pandemic, are not unfairly shouldering the cost of COVID-19,” she said.
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