Notwithstanding increased vaccination rates and greatly reduced COVID infections, California continues to swim upstream as relates helping businesses recover from pandemic restrictions and survive the challenging economy.  Early this week, the California legislature caved in to union leader demands and passed legislation mandating that businesses with 26 or more employees provide workers with up to two weeks paid time off for COVID issues retroactive to January 1 and extending through September 30! The new policy allows the employee to take paid leave up to two weeks for the purpose of recovering from COVID-19, caring for a sick family member, or for up to three days to attend a vaccination appointment, recover from immunization or take care of a child who cannot attend school because of virus-related closures or quarantines. To ease the impact of the law’s provision on business operation, the state’s business community negotiated some additional concessions including a requirement that an employee seeking to take COVID supplemental paid leave must produce a valid positive COVID test. Furthermore, other legislation passed in conjunction with the sick leave policy provides for the early removal of a $5-million cap on most business tax credits as well as the suspension of net operating loss deductions for corporate and individual taxpayers with business income of more than $1 million in tax years 2020 through 2022 which had been imposed in 2020. It allows businesses to receive a refund for any amounts in excess of the aforementioned $5 million cap that could not be used in 2020 or 2021. Still other legislation passed along with the paid sick leave resurrection creates tax conformity in California with federal Restaurant Revitalization Fund grants made to assist individual restaurants during the pandemic.