California workers are eligible for up to two weeks of supplemental paid sick leave after Gov. Gavin Newsom on Wednesday signed new protections into law, marking a major victory for labor unions and a pivotal step that policymakers hope will continue the state's decline in coronavirus cases.

"Businesses cannot thrive in a world that's failing," Newsom said during a news briefing at Oakland restaurant NIDO's BackYard. "That's why sick leave is foundational, and keeping people healthy, keeping patrons safe is so important."

The move comes after labor unions and their employees spent months pressuring the California Legislature and Newsom to reinstate the state's COVID sick pay amid the rapid spread of the omnicron variant. The state's previous policy expired last September, leaving workers with only the minimum requirement of three paid sick days.

The new law, which will expire Sept. 30, applies to businesses with 26 or more employees and will be retroactive to Jan.1, benefitting workers who were infected at the height of the omicron surge. Though it contains many of the same provisions as the 2021 policy, it also features several new rules negotiated by business leaders, including the requirement of a positive test result before an employee is eligible for the second week of paid leave.

"The governor and Legislature heard frontline workers loud and clear, and we appreciate them acting with urgency to get this done," California Labor Federation Executive Secretary-Treasurer Art Pulaski said in a statement. "Once again, California shows it's a national leader on worker protections and COVID mitigation."

Under the new law, employers are required to provide up to 40 hours of paid leave to full-time workers for a wide range of coronavirus-related needs, including COVID-19 symptoms, taking care of a sick family member, watching a child who cannot attend school because of school closures or mandated quarantines. If an employee exhausts the initial 40 hours, companies must give them an additional 40 hours if they — or a loved one whom they are caring for — can demonstrate proof of a positive coronavirus test.

The new policy limits workers to up to three days — or 24 work hours — to recover from vaccine-related side effects and secure a vaccination appointment.

About 1 in 4 workers across the state will not have access to the new paid sick leave benefits because they work for an employer with 25 or fewer workers, according to data from California's Employment Development Department.

Christopher Martinez, a bartender at NIDO's BackYard, was among the staff who kept the bar running when others were out sick during the recent omicron surge. Paid sick leave is an important safety net when cases rise, he said, but not the only benefit workers need.

"It's still a struggle to get through this," Martinez said, reflecting on the lack of additional federal stimulus payments during the latest holiday season.

Since companies across the state will be asked to absorb the costs of providing workers with the additional time off, Newsom also signed legislation to restore small business tax credits suspended at the start of the pandemic and set aside more funding for small-business grants.

The new law provides more than $6 billion in economic relief for businesses, according to policymakers. The legislation reinstates an estimated $5.5 billion in tax reductions that were suspended in 2020 for businesses that suffered significant net operating losses and provides an additional $150 million in grants for small businesses that were put on waitlists during previous relief-funding rounds.

Additionally, the new law establishes that funds received by businesses under the federal Restaurant Revitalization Fund and Shuttered Venue Operators grant programs will not be considered taxable by the state.

"This much-needed tax relief is not only essential for the immediate help for employees but it also creates a pathway and lays the foundation for long-term economic recovery for our employers," said Jennifer Barrera, CEO of the California Chamber of Commerce.

Over the past month, the average number of coronavirus cases reported daily in California has plunged 75% — dropping from about 152,000 during the height of the omicron surge in early January to about 38,000 cases on Wednesday, according to data from the California Department of Public Health.

State Senator Nancy Skinner called the series of new laws a "big win for all who were involved," including labor unions, employees and businesses.

"California is acting and we're getting it done because none of us need to have any worker show up to work and be sick," she said. "We are trying to end this pandemic, and the way that we end it is to stop the spread of COVID."

Staff writer Shomik Mukherjee contributed to this story.