Governor signs additional COVID relief for businesses, employees

Governor Gavin Newsom signs SB 113, SB 114 giving employees access to supplemental paid sick leave through Sept. 30, $6.1 billion in tax credits, grants for small business relief

SACRAMENTO –  Governor Gavin Newsom signed a duo of COVID relief bills at a small business in Oakland on Feb. 9, a prelude to the anticipated “endemic” plan to be unveiled next week.

“As California continues to lead the nation’s economic recovery, today’s action deepens our commitment to supporting the workers and businesses that have sustained us all during this unprecedented pandemic and are driving our economy,” Newsom said. 

He added that the bills are intended to ensure that workers have the time they need to take care of themselves and their loved ones, in addition to expanding California’s small business relief grant program.

Newsom signed SB 113, which includes $6.1 billion in tax credits, grants and other relief for small businesses, including nearly $500 million in tax cuts for restaurants and shuttered venues and $5.5 billion in restored tax deductions and tax credits. 

The tax cuts come from conforming state tax policy for the federal Restaurant Revitalization Fund—emergency grants provided from President Joe Biden’s $1.9 trillion American Rescue Plan Act for up to $10 million in pandemic-related revenue loss and $5 million per physical location—and federal Shuttered Venue Operators grant programs. Grants received from these programs will not be considered taxable by the state. 

The relief comes at an opportune time for local restaurants like Chapala Grill, who’ve been suffering from the effects of the prolonged pandemic and unstable economy. In January, Chapala Grill owner Pedro Mendez told the Sun-Gazette that inflation, worker shortages and higher wages are making it harder than ever to run a small business. 

“Even when we’ve increased our prices, when I’m making more money, we’re still losing money because everything is so expensive,” Mendez said. “Not even through the whole 2008 recession did I feel like it was this stressful.”

Employees out sick or caring for family members was also a big issue for the workforce in January during the Omicron wave that has recorded the highest COVID numbers since the start of the pandemic. 

Newsom also signed SB 114 to ensure Californians have access to up to 80 hours of COVID-19 supplemental paid sick leave at companies with more than 25 employees. 

Valley Republican Vince Fong (R-Kern County) sounded off that SB 114 and SB 113 are two completely different measures—one is funded, the other isn’t. 

“The Governor’s press release brings on confusion by implying that the unfunded mandate to require employers to give two paid weeks of sick leave is offset by the restoration of tax credits,” Fong said in his own press release. “SB 114 is an unfunded mandate that could bankrupt a struggling mom-and-pop shop, restaurant or nonprofit, and the Governor must acknowledge the difficulties they face caused by this law.” 

A slew of business associations, including the California Retailers Association, the California Hotels & Lodging Association, the California Restaurant Association and the California Farm Bureau—penned a letter to State Senate and Assembly members in opposition of supplemental paid sick leave before the bill was signed, but to no avail. 

Fifteen State Assembly Republicans tried to end the COVID-19 state of emergency—and the Governor’s emergency powers— on Feb. 10, but the resolution failed on party lines 15-44. 

Newsom is expected to release the state’s “endemic” plans as the Omicron wave begins to show signs of receding. He has already said the mandatory indoor mask mandate will expire Feb. 15 and has alluded to more local control, but unvaccinated people will still be required to wear masks indoors. Updates to COVID school guidelines are also expected next week. 

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