California Enacts “Right-To-Recall” Law For Employees In Specified Industries Laid Off Due To Covid-19
On April 16, 2021, California Governor Gavin Newson signed SB 93 into law, which requires certain hospitality industry and commercial business service provider employers, and other related business employers, to offer available positions to qualified, former employees that were laid off for reasons related to COVID-19. The law takes effect immediately and expires on December 31, 2024.
The obligations for covered employers under the new law are substantial and detailed, and potential penalties for noncompliance are significant. California employers should immediately determine if this statewide “Right-To-Recall” law applies to their enterprise and if so, take steps right away to implement the required procedures.
Employers Covered By SB 93
SB 93 applies to the following employers:
- Hotels with 50 or more guest rooms.
- Any contracted, leased, or sublet premises connected to or operated in conjunction with a hotel or providing services at the hotel. This might include, for example, a restaurant, gift shop, snack stand or other retail shop that leases space at a hotel, or other businesses that provide services at the building or to guests of the hotel.
- Event centers of more than 50,000 square feet or 1,000 seats used for public performance, sporting events, business meetings or similar events, which include concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.
- Any contracted, leased, or sublet premises connect to or operated in conjunction with an event center, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.
- Private clubs that operate a building or complex of buildings containing at least 50 guest rooms that they offer to members for overnight lodging.
- Airport service providers which contract with a passenger air carrier, airport facility management, or airport authority, to perform functions at the airport directly related to the air transportation of persons, property, or mail. This includes loading and unloading of property on aircrafts; security, ticketing, and check-in ground handling; assistance to passengers; aircraft cleaning and sanitization functions; and waste removal.
- Building service providers (janitorial, building maintenance, or security services) to office, retail, or other commercial buildings.
Air carriers certified by the Federal Aviation Administration are not included in the definitions of airport service providers or airport hospitality operations and are, thus, not covered by SB 93.
Successor businesses are also covered, for example, when (1) under new ownership that conducts the same or similar operations; (2) the form of the organization changes, e.g., LLC to Inc.; (3) substantially all assets are acquired by another entity that conducts the same or similar operations; and/or (4) the business relocates to a different location.
In unionized workplaces, the provisions of this law may be waived by a specific waiver in a valid collective bargaining agreement.
Employees Covered By SB 93
A laid-off employee who is eligible for preferential recall and rehire pursuant to SB 93 must meet all of the following criteria:
- The employee was employed by a covered employer for six months or more in 2019, including vacations and leaves of absence;
- The employee worked two hours or more in a particular week; and
- The employee was separated from active service for a reason related to the COVID-19 pandemic, including:
- Public health directive;
- Government shutdown order;
- Lack of business;
- Reduction in force; or
- Other economic, non-disciplinary reason due to the COVID-19 pandemic.
Recall and Written Notice Obligations
Within five business days of establishing a position, a covered employer must, in writing, offer its covered, laid-off employees all job positions for which the employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employee’s most recent layoff.
A laid-off employee must be given at least five business days from receipt to accept or decline the offer. If more than one laid-off employee is qualified for a position, preference goes to the individual with the greatest seniority (length of service). An employer can make simultaneous, conditional offers of employment to multiple laid-off employees. If more than one accepts, the laid-off employee with the greatest seniority receives preference.
An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and, instead, hires someone other than a laid-off employee is required to provide the laid-off employee with a written notice within 30 days setting forth the length of service of those individuals hired in lieu of the laid-off employee and all reasons for the employer’s decision.
Enforcement and Penalties
SB 93 does not create a private right of action by employees. This means that laid-off employees cannot bring civil actions in court to enforce the law. Instead, the California Division of Labor Standards Enforcement (“DLSE”) has exclusive enforcement jurisdiction. A laid-off employee can file a complaint with the DLSE, and the agency has authority to award relief including job reinstatement, front pay, back pay, and the value of any lost benefits. The DLSE can also award civil penalties of $100 for each employee whose rights have been violated plus liquidated damages of $500 per employee per day. In addition, the DLSE may obtain court-issued injunctions to vindicate employee rights under this law.
Employers covered by SB 93 must, for three years, maintain: records of specific information about all covered laid-off employees, including their full name, job classification, date of hire, last-known residence and email addresses, and telephone number; a copy of written notices provided to the employee regarding their layoff; and records of all communications concerning offers of employment made pursuant to this new law.
Interaction With Local Ordinances
SB 93 is similar to the Right-To-Recall ordinances passed by Los Angeles City and County at the onset of the COVID-19 pandemic. Several other cities passed similar ordinances, including Long Beach, San Francisco, San Diego, Pasadena, Oakland, and Sacramento. SB 93 does not preempt these laws; rather, it states that any local government agency can adopt its own ordinances that create greater employee rights or additional enforcement provisions.
Contact your SFSS&W attorney if you have any questions about whether SB 93 applies to your business or how to implement its requirements.
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