A Complete Guide to California Employee Benefits During COVID-19

Gusto Editors

Workers in all 50 states are entitled to certain benefits, and California is no exception. While each state varies in terms of which employee benefits are required and at what levels, California regulations require companies of certain sizes and in certain industries to provide benefits related to unemployment, paid vacation and sick leave, health coverage, disability insurance, retirement, and more.

California is not alone in feeling the impact of the novel coronavirus on its local economy. The global pandemic is one of the most catastrophic events to hit the small business community, and many in the Golden State are looking to its programs for support. Those who work for larger companies, too, may be feeling the pinch as furloughs and layoffs take hold across the state.

What sort of employee benefits are available to California workers? Here, we’ll review some key provisions in California’s employee benefits requirements and how they have changed in response to COVID-19.

Unemployment insurance benefits in California

General guideline

The State of California maintains an unemployment insurance (UI) benefits system for workers who have lost their jobs and meet certain eligibility standards. To meet those standards, employees must:

  • Earn enough wages in a 12-month period to qualify, at least $1,300 in the last three months or $900 in base pay in the last three months
  • Be totally or partially unemployed
  • Be physically able to work
  • Be available for work
  • Be ready and willing to accept work immediately

The typical weekly UI benefit amount available to qualified Californians ranges from $40 to $450. You can enter your info on the Employment Development Department (EDD) website to calculate your benefit amount.

To apply for UI benefits, file an unemployment insurance claim with the EDD. Here’s how to file an unemployment claim step by step:

  • Access the UI Online portal during hours of operation. You can also file by phone or mail.
  • Create a Benefit Programs Online account.
  • Register for UI Online. Enter your name, date of birth, social security number, and EDD customer account number.
  • File a claim by providing all relevant information, including your previous employer, the last date you worked, reason for unemployment, and gross earnings for the last week you worked.

Once you’re approved for unemployment benefits, you must certify for benefits with the EDD every two weeks by logging in to your account and answering a series of certification questions. If you stop claiming benefits, even for one week, you will need to reopen your claim with the EDD or file a new claim if your previous claim has expired.

As part of the federal Worker Adjustment and Retraining Notification (WARN) Act of 1988, California employers with 100 or more employees are required to provide 60 calendar-day advanced notice if a workplace is scheduled for closure, or if mass layoffs of employees are planned.

How has COVID-19 impacted California unemployment benefits?

Due to the impact of the COVID-19 pandemic, the State of California is waiving the normal seven-day waiting period for unemployment insurance claims made on or after January 19, 2020. In addition, the state also waived the requirement that you must be looking for work each week to remain eligible for benefits.

Finally, an additional $600 in weekly benefits, financed by the federal government, has been added to the regular state distribution of unemployment benefits as part of the Federal Pandemic Unemployment Compensation (FPUC). The additional payments are scheduled to continue until July 25, 2020. Payments of the additional $600 are automatic for those already receiving unemployment benefits, but it may come as a separate weekly payment on top of regular unemployment benefits.

Another portion of FPUC allows unemployed Californians who are business owners, self-employed, or independent contractors, who might otherwise be ineligible for UI benefits, to be eligible for regular state unemployment insurance benefits, retroactive to February 2, 2020. This is in addition to the extra $600 per week. The FPUC is scheduled to end for Californians on December 26, 2020.

Paid time off in California

General guideline

In California, there are currently no laws requiring employers to provide paid or unpaid vacation time. However, employers must offer paid sick leave to employees who work at least 30 days per year. Under California law, employees earn one hour of sick leave for every 30 hours worked.

Paid sick leave accruals must roll over from year to year, but employers can cap an employee’s accrued paid sick time at 48 hours, or six days of paid leave. 

Additionally, California maintains an Annual Leave Program, which can replace traditional vacation and sick leave programs and allow for more discretionary leave. Annual leave can be used for any management-approved absence that would be covered by traditional vacation or sick time off. Employees who participate in the Annual Leave Program can accrue a maximum of 640 hours of annual leave as of January 1 each year. 

Finally, public employees in California (and some private employees, depending on their employer’s calendar) enjoy 12 paid public holidays each year. The 12 holidays in California can include:

  • New Year’s Day
  • Martin Luther King Jr. Day
  • Lincoln’s birthday
  • Washington’s birthday
  • Memorial Day
  • Independence Day
  • Labor Day
  • Columbus Day
  • Veterans Day
  • Thanksgiving Day
  • The day after Thanksgiving
  • Christmas 

Employers are not required by law to extend paid holidays or holiday pay to employees.

 How has COVID-19 impacted paid time off in California?

Due to the federal Families First Coronavirus Response Act (FFCRA), as of April 1 all private employers with less than 500 employees must extend 10 days of paid sick leave to employees with an 80-hour cap for full-time employees. Additionally, the law requires the provision of up to 10 weeks expanded family and medical leave, which would be available to employees with tenure of 30 days or more who have already taken two weeks of paid sick leave.

Small businesses with fewer than 50 employees may be eligible for exemptions if extending required paid leave to employees would jeopardize the viability of the business.

Health insurance benefits in California

General guideline

Health care requirements for employers in California are primarily governed by the federal Affordable Care Act (ACA) and California State Insurance Regulations. On the federal level, the ACA requires employers with 50 or more full-time equivalent employees to provide affordable medical insurance benefits.

The minimum essential benefits a California employer is required to offer through health plans include:

  • Outpatient care in a doctor’s office
  • Emergency room evaluation and treatment
  • Inpatient care in a hospital
  • Pre- and post-natal care
  • Mental health and substance abuse counseling
  • Prescription medication
  • Physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and other services to help recover from an injury, disability, or chronic condition
  • Lab testing
  • Preventive services, including screenings, counseling, and vaccines
  • Pediatric services, including dental and vision care, for children under the age of 19

While federal law includes guidelines for “association plans,” which allow small businesses to buy coverage together as a single entity, state legislators have banned the use of association plans in California. 

California state law also mandates that the rate paid for health insurance benefits must remain the same for a full year, unless employees are added to or subtracted from an existing plan.

There are 19 different regions in California where rates are standardized. Employers must contribute at least 50% of the employee premium under the health plan they offer. There are, however, some insurance companies that allow employers to make a “defined contribution,” which is often a lower amount per employee per month. 

How has COVID-19 impacted California health insurance benefits?

During the coronavirus pandemic, the State of California has waived all co-pays, coinsurance, and deductibles for patients with full-service Medi-Cal or commercial insurance who seek COVID-19 testing and screening. Additionally, California has required insurance companies to cover telehealth and telemedicine services, including consultations and treatment via video conference.

 Disability insurance benefits in California

 General guideline

The California State Disability Insurance (SDI) program offers both short-term disability and paid family leave wage replacement benefits to many employees. Eligible employees can earn between 60% and 70% of their income earned between five and 18 months before the date of their disability claim. Benefits are payable for up to 52 weeks. 

To apply for disability benefits, an employee must first file a claim using the SDI online portal or by submitting a paper claim. There is a seven-day waiting period before benefits for an approved applicant will arrive. Applicants must also have earned at least $300 in wages subject to SDI deductions, as well as have a doctor certify their disability. 

Employers are not required to pay into the SDI fund under California law. Instead, benefits under disability insurance and paid family leave are funded by workers through SDI deductions on their paychecks. Employers are, however, required to withhold SDI contributions from employees’ paychecks and send them to the EDD. Employers are also required to respond to the EDD regarding employee disability claims.

How has COVID-19 impacted California disability insurance?

Due to the coronavirus pandemic, workers in California who have either contracted COVID-19 or who have been exposed to COVID-19 may be eligible for workers’ compensation benefits, like temporary disability (TD) payments.

TD payments would begin from a date of overnight hospitalization or from the day a doctor says you can’t work for more than three days. Employees could be entitled to temporary disability payments for up to 104 weeks. To be eligible for disability insurance benefits, an employee must:

  • Be unable to do their regular work for at least eight days
  • Be employed or actively looking for work at the time disability begins
  • Have lost wages due to disability
  • Have earned at least $300, from which SDI deductions were withheld
  • Be under the care or treatment of a doctor during the first eight days of disability
  • Complete form DE 2501 no earlier than nine days after first day of disability
  • Have a doctor certify disability through medical certification portion of form DE 2501

Governor Gavin Newsom issued an executive order that waives the seven-day, non-payable waiting period for state disability insurance benefits. Instead, approved applicants will be able to receive disability insurance payments retroactive to the first week that they are out of work. 

Workers’ compensation benefits in California

 General guideline

California law requires employers to pay workers’ compensation benefits when an employee experiences certain work-related illnesses or injuries. Workers’ compensation is comprised of four different components:

  • Medical care: Employers are required to cover the costs of employee medical care.
  • Disability benefits: Temporary and permanent disability benefits are available to eligible employees who are unable to return to their jobs.
  • Supplemental job displacement benefits: Job displacement benefits are vouchers that can be used for retraining and educational programs if an employee is unable to return to their previous line of work.
  • Death benefits: Death benefits are payable to a deceased employee’s spouse, children, or other dependents.

To file a workers’ compensation claim, an employee must request a DWC 1 form from their employer within one working day after learning about their injury or illness. The form is also available via the Department of Workers’ Compensation website. An employee must complete the form and submit it to their employer to initiate a workers’ compensation case.

How has COVID-19 impacted California workers’ compensation?

The State of California considers exposure to and contraction of COVID-19 an eligible reason for workers’ compensation benefits. These benefits include temporary disability payments from the time your doctor says you cannot work up to 104 weeks.

Temporary disability covers two-thirds of an employee’s lost gross wages while recovering from an illness or injury. Temporary disability benefits cease when you return to work or your doctor reports your illness or injury has improved as much as it is going to. 

Childcare benefits in California

General guideline

In California, employers are required to extend certain types of leave to working parents. For example, employers with 25 employees must extend at least 40 hours off each year (and up to eight hours per month) to employees for school-related activities. These could include school plays, awards ceremonies, graduations, emergencies, and even finding a school and enrolling a child. Employees are required, however, to provide employers with proof of participation upon request. They can also be required to use paid time off for planned leave for this purpose. 

Additionally, California state law requires employers to provide leave to employees to attend disciplinary meetings related to their child at school. For example, if a child is potentially being suspended and a teacher requires a parent meeting, employers must permit their employees to attend. Moreover, employees are eligible to recover any forfeited wages or benefits if an employer refuses to offer the required leave.

How has COVID-19 impacted California child care benefits?

During the COVID-19 pandemic, Governor Newsom issued an executive order that established Emergency Child Care vouchers. Those vouchers will be made available to essential workers and families in at-risk groups to receive free, temporary childcare services.

All essential workers who require child care to go to work and who have less than $1 million in assets are potentially eligible. Essential workers must be unable to work remotely or not have another parent or guardian available to care for the child in order to be eligible. Here is the application to apply for Emergency Child Care vouchers.

Retirement benefits in California

General guideline

Under California law, all employers with five or more employees are required to offer some form of retirement plan for workers, with compliance deadlines based on the size of the company. If employers choose not to offer their own plan, they must register for the state-managed CalSavers program and facilitate employee contributions.

CalSavers is a government-run option for private employers similar to the retirement savings plan for state employees, known as the Savings Plus plan, which includes 401(k) and 457(b) retirement savings accounts. As of July 2019, private employers can register to offer the CalSavers program to their employees

How has COVID-19 impacted California retirement benefits?

Due to the COVID-19 pandemic, the CalSavers Retirement Savings Program oversight board extended the registration deadline for employers with more than 100 employees from June 30 to September 30. 

The California Public Employees’ Retirement System (CalPERS) serves as the pension fund for state employees. A public worker who retires under the CalPERS system and returns to work with a CalPERS employer is known as a “retired annuitant.” The CalPERS call center remains open and operational thus far during the coronavirus pandemic.

Times are tough right now for employers and employees alike, but it’s important to know that you’re not alone. For more information on helpful benefits and relief programs, visit Gusto’s COVID-19 resource hub.

Gusto Editors Gusto Editors, contributing authors on Gusto, provide actionable tips and expert advice on HR and payroll for successful business management.
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