When the COVID-19 pandemic hit, it hit hard. Economic activity in California nearly came to a halt, and many employers had no choice but to lay off their workers, causing California’s unemployment rates to soar.

Only months ago, Gov. Gavin Newsom (D) vetoed AB 3216, a bill that would have required certain employers to offer preferential hiring to employees laid off due to the pandemic. In his veto message, he declared that the requirements of AB 3216 would “place too onerous a burden on employers” and found that tethering the bill’s provisions to a state of emergency was problematic.

Well, the Governor's reluctance apparently did not last long. On April 16, he signed a strikingly similar measure called SB 93. SB 93 requires businesses in certain hospitality and service sectors to rehire employees who had been laid off due to the pandemic before hiring new employees. SB 93 adds section 2810.8 to the California Labor Code. 

Here is what you need to know about the new law’s provisions:

Who is a covered employer?

The law does not apply to all California employers but focuses on certain industries such as hospitality, airport, event, and building maintenance or security services. It applies generally to hotels, private clubs, event centers, airport hospitality operations, and airport service providers. It also applies to janitorial, building maintenance, and security services provided to office, retail, and other commercial buildings.

Who is a “laid-off” employee?

A “laid-off employee” is any employee (1) who was employed by a covered employer for six months or more in the 12 months before January 1, 2020, and (2) whose most recent separation from the employer was due to a reason related to the pandemic. Pandemic-related reasons include a public health directive or government shutdown order, or a lack of business, reduction in force, or other economic, non-disciplinary reason due to the COVID-19 pandemic.

What must covered employers do?

Before a covered employer can hire a new employee, it must first offer the position to laid-off employees who are “qualified for the position.” A laid-off employee is qualified for the position if he or she held the same or similar position at the business at the time of the employee’s most recent layoff with the employer.

This requirement applies to all positions that become available on or after April 16, 2021.

The employer must extend the offers within five business days of “establishing a position.” The offers must be in writing, and must be delivered by hand or to the laid-off employee's home, and by email and text. The employer may offer the position to all qualified laid-off employees at the same time.

The laid-off employees have five business days to accept or reject the position. If more than one qualified laid-off employee accepts the position, the employer must hire in order of seniority.

If an employer declines to recall a laid-off employee on the ground that the employee is not qualified, and hires someone else, the employer must provide the laid-off employee written notice within 30 days, which must include the following information:

• A list of all employees hired for the position, including their length of service with the employer, and
• An explanation as to why the employer did not hire the previously laid-off employee.

What recordkeeping requirements are there?

Covered employers must retain the following records about each laid-off employee for at least three years:

• Full legal name
• Job classification at the time of separation
• Date of hire
• Last known residence address
• Last known email address
• Last known telephone number
• A copy of the employee’s notice of layoff

Is there an anti-retaliation provision?

Yes. SB 93 forbids employers from refusing to employ, terminating, reducing compensation, or taking any other “adverse employment action” against laid-off employees for attempting to enforce their rights under this new law.

Some good (and not-so-good) news for covered employers

Good news: California’s Division of Labor Standards Enforcement has exclusive jurisdiction to enforce this law. It cannot be enforced through a private right of action or the Private Attorneys General Act, also known as PAGA. All of the provisions of SB 93 may also be waived through collective bargaining in union workplaces.

Not-so-good news: A covered employee may file a complaint with the DLSE seeking hiring and reinstatement rights, front pay or back pay for each day during which the violation occurred, the value of the benefits the employee would have received under the employer’s benefit plan, and interest on unpaid amounts due. And although no criminal penalties may be imposed, any employer who violates this law will be subject to a civil penalty of $100 for each employee whose rights under these provisions are violated, plus $500 per employee, for each day the rights of an employee under this section are violated, and continuing until the violation is cured.

Recommendations

Covered employers should look carefully at the employees they laid off since January 1, 2020, and whose separations may have been related to the COVID-19 pandemic. Employers should make sure that they have complete and accurate records, and ensure that the laid-off employees receive first consideration when it comes time to fill vacancies in positions for which those laid-off employees are qualified.

The new law’s mandates took effect April 16, and are set to last through December 31, 2024.

If you have any questions, please contact the Constangy attorney with whom you usually work.