The policy, which state lawmakers approved earlier this week, requires businesses with more than 25 employees to provide at least 40 hours of COVID-related paid sick leave to workers that get infected or care for another person who is sick.
Workers who present proof of their positive COVID test result are eligible for an additional 40 hours of paid leave. The policy is retroactive and applies to all workers who have or will contract the virus through Sept. 30, 2021.
"Businesses cannot thrive in a world that's failing," Newsom said during a signing ceremony at Nido's Backyard in Oakland. "And that's why sick leave is foundational: Keeping people healthy, keeping people safe is so important."
While California's employers are required to provide general paid sick leave to their workers, the state's paid sick leave policy specifically for workers exposed to COVID-19 or those exhibiting symptoms expired Sept. 30 last year.
That policy, which Newsom signed into law in March 2021, required employers with more than 25 employees to provide an additional 80 hours of paid leave, ensuring workers could avoid working when sick.
Also included in the legislative package Newsom signed is $6.1 billion in relief funding that includes some $500 million in tax relief for restaurants and venues that have received federal relief grants, $150 million in small business grants and $5.5 billion in tax credits and deductions for employers.
"This much-needed tax relief is not only essential for the immediate health of employers, but it also creates a pathway and lays the foundation for long-term economic recovery for our employers," California Chamber of Commerce President and CEO Jennifer Barrera said.
The state has previously dispersed roughly $3.56 billion in pandemic relief grants to more than 300,000 businesses, Newsom said, and estimated that an additional 13,500 businesses would benefit from the funding package he signed Wednesday.
Newsom said that the state intends to make additional funding available, if necessary, to help business owners afford the cost of providing paid sick leave to COVID patients.
He added that state legislators have been highly cooperative about supporting the state's small businesses throughout the pandemic.
"There's no convincing or coercing this Legislature -- quite the contrary -- on helping our small businesses," he said. "And I would expect, as needs present themselves, we will indeed do more."