On Friday, April 16, 2021, Senate Bill 93 was signed into law and became effective immediately. With COVID-19 cases on the decline and many California businesses beginning to ramp up operations, employers are now faced with yet another legal compliance hurdle. The new statute requires covered employers to offer available positions to qualified former employees laid off due to the pandemic, allow them 5 business days to respond, and to award the position based on seniority. These requirements will remain in effect through December 31, 2024.
The new law only applies to certain California employers:
Hotels and private clubs with 50 or more guest rooms or suites (as of December 31, 2019 or at the opening of the facility);
- Including, contracted, leased, or sublet premises connected to, operated in conjunction with, or providing services at a covered hotel or private club;
Building service businesses providing janitorial, maintenance or security in commercial buildings;
Event centers of more than 50,000 square feet or with more than 1,000 seats;
- Including, contracted, leased, or sublet premises connected to, operated in conjunction with the event center’s purpose (e.g., concessions, food preparation facilities, retail stores, restaurants, bars, parking facilities);
Airport hospitality operations and service providers that provide any service in connection with the preparation of food or beverage for aircraft crew or passengers, retail, or other consumer goods or services to the public at an airport (e.g. restaurants and shops), and businesses that perform functions on the property of the airport directly related to air transportation (e.g. loading and unloading of property on aircraft, ticketing, ground-handling, aircraft cleaning, and waste removal; and
Successor employers to any of the covered establishments if the business is conducting the same or similar operations as it did before COVID-19.
What must Covered Employers do?
The new statute requires all covered establishments to comply with the following rehire and retention:
Must offer in writing to laid-off employees all job positions that become available after the effective date of the law for which the employee is qualified. Laid-off employees will be deemed qualified if the employee held the same or similar position at the time of separation due to a COVID-19 related reason.
The laid-off employee must be given at least 5 business days from the date of receipt to respond to the offer.
If more than one laid-off employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service (seniority) based on the employee’s date of hire. The employer may make simultaneous, conditional rehire offers to multiple laid-off employees who are qualified for the position (i.e., offers which are conditioned on whether the employee has the longest length of service as compared to other laid-off employees who accept the conditional offer).
- An employer that declines to recall a laid-off employee on the grounds of lack of qualifications must provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired for the position, along with all reasons for the decision.
The offer must be communicated to laid-off employees in all of the following ways:
- A written offer either delivered by hand or sent to the laid-off employee's last known address;
An email to the laid-off employee's last known email address; and
- A text message to the laid-off employee's last known phone number.
Who qualifies as a Covered Employee?
Covered employees include all workers who:
- Work for an employer for at least two hours within a week;
- Were employed by the employer for 6 months or more in calendar year 2019; and
- Were most recently separated from the employer for a reason related to the COVID-19 pandemic, including:
- Because of a public health directive or government shutdown order;
- Because of a Covid-19-related downturn in business; or
- Any other economic, non-disciplinary reason resulting from the pandemic.
Covered employers must maintain the following records of rehire offers for at least 3 years following the offer:
- The employee's full legal name;
- The employee's job classification at the time of separation;
- The employee's (original) date of hire;
- The employee's last known address, email address and phone number;
- A copy of all written rehire offers; and
- Copies of all communications between the employer and the laid-off employee pursuant to these requirements.
Does this law apply to unionized businesses with existing recall rights?
Yes. The recall rights created by the statute can be waived in the context of a collective bargaining agreement, but only if the CBA explicitly waives the provisions of the statute in clear and unambiguous terms.
Stricter Local Standards and Remedies not Preempted
A similar bill was passed by the State Legislature last summer but was vetoed by Governor Newsom. In the interim, a number of local jurisdictions, including the City and County of Los Angeles, Oakland, San Francisco, and San Diego enacted right-to-rehire ordinances with their own requirements, which also remain in effect. The statute has a non-preemption provision whereby local ordinances that impose additional requirements and/or provide additional remedies are not preempted by the statute and must continue to be followed.
Enforcement and Remedies/Penalties
The statute will be enforced exclusively by the Labor Commissioner and Division of Labor Standards Enforcement (DLSE), through complaints filed by employees, inspections and citations issued by the DLSE and/or litigation initiated by the Labor Commissioner.
Potential remedies for violations are severe and include:
- Laid-off employee who is not rehired in compliance with the statute may recover "front pay or back pay" for each day during which a violation continues;
- The laid-off employee will also be entitled to recover the value of any benefits he or she would have been entitled to under the employer's benefits plan(s); and
- The employer will be subject to a $100 civil penalty plus $500 in liquidated damages per day for each employee it fails to rehire in accordance with the statute, with those penalties and damages continuing to accrue until the violation is "cured".
Actions Covered Employers Should Take Immediately
Because SB-93 became effective immediately when signed into law on April 16, covered employers must act promptly to ensure that any subsequent hiring is compliant with the statute, including developing appropriate rehire procedures and training hiring managers about the new legal requirements.
The statute authorizes the DLSE to issue rules and regulations interpreting these requirements. To date, the DLSE has not published any guidance regarding the statute. The statute leaves many important practical applicable questions unanswered.
We will continue to monitor major COVID-19 related developments that impact the workplace. If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at 818-508-3700 or visit us online at www.brgslaw.com.
Eric W. Mueller
Philip L. Reznik
Ballard Rosenberg Golper & Savitt, LLP