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Pay employees under the California COVID-19 Supplemental Paid Sick Leave

SOLVED•by QuickBooks•38•Updated 1 year ago

Learn how to pay your employees California COVID-19 Supplemental Paid Sick Leave if they’ve been affected by COVID-19.

On February 9, 2022, Governor Newsom signed Bill 114, which requires California employers with more than 25 employees to provide up to 80 hours of COVID-19 supplemental paid sick leave to employees retroactive to January 1, 2022, until September 30, 2022.

Step 1: Determine your employee’s eligibility

The latest bill creates two separate 40-hour buckets of COVID-19 Supplemental Sick Leave. If you have more than 25 employees, you’re required to provide paid sick leave if they're unable to work or telework due to any one of the following reasons:

  • Your employee is caring for self and:  
    • Subject to a quarantine or isolation period related to COVID-19 (see note below)
    • Advised by a healthcare provider to quarantine due to COVID-19
    • Experiencing symptoms of COVID-19 and is seeking a medical diagnosis
    • Tests positive for COVID-19
  • Your employee is caring for a family member who is: 
    • Subject to a quarantine or isolation period related to COVID-19 (see note below) 
    • Advised by a healthcare provider to quarantine due to COVID-19 
    • A child whose school or place of care is closed or unavailable due to COVID-19 on site
    • Providing care to a family member who has tested positive for COVID-19 
  • Vaccine-related:
    • Your employee is attending a vaccine appointment 
    • Your employee cannot work or telework due to vaccine-related symptoms
NOTE: The quarantine or isolation period related to COVID-19 is the period defined by an order or guidelines of the California Department of Public Health, the federal Centers for Disease Control and Prevention, or a local health officer with jurisdiction over the workplace.

Learn more about the new CA COVID-19 Supplemental Paid Sick Leave from the California Department of Labor

Step 2: Set up CA COVID-19 Supplemental Paid Sick Leave in your payroll product

Select your product to get started. 

Note: Not sure which payroll service you have? Here's how to find which payroll service you have.

You have two options to track and pay eligible employees.

  1. Set up a Time Off Policy. If you have an available time off policy, you can track available and used hours for CA Covid-19 Supplemental Paid Sick Leave with this option.  If not, see Set up an Other Earnings item.
  2. Set up an Other Earnings item. If you’re already using all sick and vacation time off policies, you’ll need to create an Other Earnings item.  You’ll need to manually track available and used hours for your employees.

Note: You can’t rename the time off policy.  It’ll show on the employees’ pay stubs as Sick, Vacation or PTO.  Let your employee know which one you use for CA COVID-19 Supplemental sick time. 

  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Under Paid time off select the ▼ dropdown and choose Add new paid time off policy.
  5. Complete the on-screen fields to create your policy, then select Save twice.
  1. Go to Payroll, then Employees.
  2. Select your employee.
  3. From Pay types, select Start or Edit.
  4. Select Additional pay types to expand the menu, and select Other Earnings.
  5. Select Edit ✎ and rename the item CA COVID Sick Pay
  6. Select Save.

You'll need to set up a CA Covid addition pay item to ensure you're paying your employees correctly according to the CA COVID-19 Supplemental Paid Sick Leave.

You’ll need to manually track your employees’ available and used hours and provide this info to them. QuickBooks won’t track or stop at the allowed 80 hours.  CA COVID-19 Supplemental Paid Sick Leave balances won’t appear on the employees’ pay stubs or in QuickBooks Workforce.  

Note: Don't use a wage payroll item (including Sick or Vacation Pay). This will impact existing sick or vacation balances.

Set up a CA COVID addition item

  1. Download the latest payroll tax table update.
  2. Go to Lists, then select Payroll Item List.
  3. Select Payroll Item, then select New.
  4. Select Custom Setup, then select Next.
  5. Select Addition, then select Next.
  6. Enter a name for the pay item (such as CA COVID Sick Leave), then select Next. 
  7. Choose the Expense account where you want to track this addition.
  8. Choose the tax tracking type, Compensation.
  9. Select Next.
  10. Select Calculate this item based on quantity, then select Next.
  11. Leave the rate blank, enter $5110.00 as the limit, and then choose One-time limit.
  12. Select Finish.

Step 3: Pay your eligible employee

Create your paycheck as normal.  

  • If you set up a time off policy, add the CA COVID-19 Supplemental Sick Leave hours used on the sick, vacation, or PTO item 
  • If you set up an Other Earnings (CA COVID-19 Supp Sick) item, enter the amount of pay for the CA COVID-19 Supplemental Sick Leave on the item

Create your paycheck as normal:

  1. Add the addition payroll item you created in Step 2 to the paycheck.
  2. In the Rate column, enter the employee's pay rate.
  3. In the Quantity column, enter the number of hours.

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