UPDATED – On September 11, 2020, the San Francisco mayor approved a temporary emergency ordinance, protecting employees, contractors, and job applicants from adverse employment action if they test positive for coronavirus, or choose to isolate, or quarantine, due to COVID-19 exposure or symptoms. The ordinance expires on November 10, 2020 unless it is reenacted by the San Francisco Board of Supervisors.

The San Francisco Board of Supervisors recently passed the Public Health Emergency Leave Ordinance (PHELO) which became effective April 17, 2020. PHELO addresses the emergency paid leave coverage gap created by the Families First Coronavirus Response Act (FFCRA) by extending paid leave to employees in San Francisco (City) who are employed by businesses with 500 or more employees and therefore are not covered by the FFCRA.

For additional information about the FFCRA, please visit our blog post.

Which Employers Does PHELO Apply to?

Employers with 500 or more employees worldwide must provide leave under the PHELO. For the purposes of counting employees, all persons performing work for the employer are counted, whether or not the employee works in San Francisco.

The Office of Labor Standards Enforcement (OLSE) has clarified that if the number of employees fluctuates above or below 500 employees over the course of a year, business size for the current calendar year should be calculated based on an average number of employees per pay period during the preceding calendar year. For more information see the OLSE guidance on PHELO.

Employers covered under the federal FFCRA are NOT subject to PHELO.

Who is Eligible to take PHELO leave?

PHELO applies to any person who is an employee under California law, including part-time and temporary employees who perform work as an employee in San Francisco.

“Employee” includes someone who performs limited work within the geographic boundaries of the City if the individual is considered an employee under the rules implementing San Francisco’s existing Paid Sick Leave Ordinance (PSLO). This means that someone will also be considered an employee under PHELO if the worker: 1) lives in the City and performs work from home for 56 or more hours within a calendar year; or 2) performs work outside of the City, but stops in the City to perform work, for a total of 56 or more hours within a calendar year.  For additional information, see Rule 6 of the OLSE rules implementing San Francisco PSLO.

PHELO is available for immediate use, regardless of how long the employee has been employed by the employer.

The guidance released by the OLSE clarifies that PHELO does not cover the following:

  1. Private-sector employees at San Francisco International Airport (SFO);
  2. Private-sector employees who work at businesses located in federal enclaves within San Francisco (e.g., the Presidio, Fort Mason, Golden Gate National Recreation Area); and
  3. Independent contractors.

What Amount of PHELO Leave Must be Provided to Eligible Employees?

The amount of leave provided under the PHELO differs depending on whether an employee worked full-time or part-time as of February 25, 2020 as follows:

  • Full-time employees: are entitled to the full 80 hours.
  • Part-time employees: are entitled to receive the number of hours equal to the average number of hours over a two-week period that the employee was scheduled to work over the previous six months ending on February 25, 2020, including hours the employee took any leave.

For employees hired after February 25, 2020, the leave provided under PHELO is equal to the average number of hours that the employee worked over a two-week period between the date of hire and the date upon which the leave is taken. This average includes hours for which the employee took leave of any other type.

How is Rate of Pay Calculated under PHELO?

Employers should calculate the rate of pay the same way it does under San Francisco PSLO. Employers have the following options:

  • Non-exempt employees:
    • Employers may calculate using the regular rate of pay for the workweek in which the employee uses PHELO leave, whether or not the employee works overtime in that week.
    • Alternatively, the employer may calculate by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
  • Exempt employees:
    • Must be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

Are Businesses that have Temporarily Closed or Suspended Operations covered by PHELO?

Yes. PHELO is intended to cover employees who are unable to work (including telework) due to illness, exposure to others with the coronavirus, business closures, and family caregiving obligations related to closures of schools and care facilities and an inability to secure caregiving assistance due to the public health emergency related to COVID-19.

If an employer elects to furlough employees (rather than terminate their employment) due to a temporary closure or lack of work, those employees would be eligible to receive benefits under the PHELO. Employers should note that is a significant departure from the FFCRA requirements for businesses that have temporarily closed operations or furloughed employees. Under the FFCRA, employees are not entitled to paid sick leave if an employer furloughs them because it does not have enough work or business.  For additional information, see section 3 in our blog post.

What Must Covered Employer’s Provide?

Covered employers must provide up to 80 hours of paid PHELO leave to each employee who performs work in San Francisco.  Employees may use this leave when they are unable to work (or telework) due to specified reasons related to COVID-19 (see question below for more). The leave is in effect only during the local public health emergency (and at least through June 17, 2020).

What are the Specific COVID-19 Related Reasons under PHELO?

 PHELO leave may be used if an employee:

  1. Is subject to an individual or general federal, state or local quarantine or isolation order related to COVID-19, including the Shelter-in-Place Executive Order issued by the California Governor;
  2. Has been advised by a health care provider to self-quarantine;
  3. Is experiencing symptoms associated with COVID-19 and seeking a medical diagnosis;
  4. Is caring for a family member who is subject to an order as described above, has been advised to self-quarantine or is experiencing symptoms associated to COVID-19;
  5. Is caring for a family member whose school or care provider is closed or unavailable due to COVID-19; 
  6. Is experiencing other substantially similar conditions specified by the Local Health Officer.

Are Employers Required to Provide PHELO Leave in addition to Paid Sick Leave under the San Francisco PSLO?

Yes. PHELO leave must be made available to employees in addition to any paid time off, including paid sick leave under the San Francisco PSLO, that the employer offered or provided to employees on or before April 17, 2020.

Are Employers Permitted to Offset other COVID-19 Related Leave?

Employers that provide additional paid leave in response to the COVID-19 outbreak are permitted to offset that leave from the 80-hour requirement. The amount of PHELO leave that an employer must provide is reduced for every hour of paid leave or paid time off consistent with PHELO that the employer allowed an employee to take, not including previously accrued hours or hours accrued under the PSLO, on or after February 25, 2020.

How Long is PHELO Effective?

The PHELO took effect on April 17, 2020 and will expire on June 17, 2020 unless reenacted by the San Francisco Board of Supervisors, or upon the termination of the Public Health Emergency, whichever occurs first.

Can Employers Require a Doctor’s Note?

Employers may require employees to identify the basis for requesting Public Health Emergency Leave, but may not require the disclosure of health information or other documentation such as a doctor’s note.

Is there an Employer Notice Requirement?

Yes. Covered employers are required to provide the official PHELO Poster in a manner calculated to reach all employees (posting at job site, sending electronically, and/or posting to web-based or app-based platform). The notice must also be provided Spanish, Chinese, and any language spoken by at least 5% of the employees who are, or prior to the Public Health Emergency were, at the workplace or job site.

What Records do Employers need to Retain under PHELO?

Employers must retain records documenting work schedules, hours worked, and PHELO leave taken by employees. In the case of exempt employees, employers must maintain records of work schedules and days worked, but do not need to maintain records of actual hours worked.

Employers must retain employee records for a period of four years even if the employee ceases to perform work in San Francisco or if there is a separation of employment. Employers must allow OLSE access to these records upon request.

Can an Employer Reduce its Non-mandated Paid Time Off Policies in Response to the PHELO?

No. An Employer may not change any paid time off policies on or after April 17, 2020 except to provide additional paid leave.

Are Employers Required to Pay Out Unused Leave at Separation?

Employers are not required to pay out any unused leave upon separation of employment.

Are there any other Prohibitions under PHELO?

PHELO includes anti-retaliation protections that prohibit an employer from interfering with any right provided or protected under the ordinance. Employers may not take any adverse action against an employee for exercising their rights under PHELO.

What are the Penalties for Noncompliance?

The City can investigate possible violations, shall have access to employer records, and can enforce the paid leave requirements by ordering reinstatement of employees, payment of paid leave unlawfully withheld, and payment of penalties.

Employers may call (415) 554-6271 or e-mail PSL@sfgov.org with further questions.

Additional Resources

PHELO Poster

Office of Labor Standards Enforcement

City and County of San Francisco – PHELO FAQs

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Lizet Ramirez – Lizet is a Client Compliance Manager for Sequoia One, where she works with our clients to optimize and streamline benefits compliance. In her free time, Lizet enjoys live music, travel, hiking and spa days.