Hunton Employment & Labor Perspectives

On April 16, 2021, Governor Newsom approved S.B. 93, a statewide COVID right-to-recall law that faltered on its first attempt last October.  In the interim, a number of counties and cities (including the Cities of Los Angeles, Oakland, San Francisco, San Diego, and Pasadena, and Los Angeles County) passed almost identical measures, which will remain in effect to the extent they are more generous than the state law.

Like the local ordinances, the state law is time-limited and directed to the industries with workforces most decimated by COVID: hotels, event centers, private clubs, airport hospitality operations, airport service providers and janitorial, maintenance and security services for commercial buildings. Through December 31, 2024, employers in those industries are required to notify those laid off because of COVID about newly-available positions, and offer them to the laid-off employees based on a qualification-based preference system. Post-layoff changes in ownership, the form of the organization, or the location of the business will not excuse an employer from these recall protocols, as long as the business conducts the same or substantially similar operations as it did before the pandemic.

A “laid off employee” is someone who was employed by the employer for six months or more in the twelve months preceding January 1, 2020, and whose most recent separation was attributable to the COVID-19 pandemic, because of a public health directive, a government shutdown order, lack of business, a reduction in force, or another pandemic-related economic reason. Those terminated for disciplinary reasons do not have recall rights under this law.

Within five days of establishing the availability of an open position, affected employers must contact laid-off employees by mail, email and text message (to the extent the employer possesses that information), to let them know of the availability of positions for which they are qualified, meaning that they either held that position at the time they were separated, or held a similar position. Positions must be offered in this order of preference.  If more than one employee is entitled to a preference for a position, the offer goes to the person with the most seniority based on date of hire.

Laid-off employees have five business days from receipt of an offer to accept or decline it, which means employers should have a means of proving the date the offer was delivered. Fortunately, employers may make simultaneous, conditional offers of employment to laid-off employees, which may help to expedite the hiring process.  Final offers must be made based on the experience-related preference scheme created by the law.  If an employer ultimately declines to hire a laid-off employee due to lack of qualifications, and instead hires outside the pool of laid-off employees, then within 30 days the employer must provide the laid-off employee with a notice that explains the reasons for the decision, including the length of service of the employee selected for the position.

The law sets forth a three-year recordkeeping requirement that is consistent with that prescribed by Labor Code § 1198.5 for personnel records, but specifically identifies the following items that must be maintained: the employee’s full legal name, job classification at the time of separation, date of hire, last-known residence address, last-known email address and telephone number, and copies of the written notices regarding layoff and subsequent communications concerning recall.

The law is supported by robust enforcement provisions. Although enforcement is assigned to the DLSE and there is no private right of action (in contrast to a number of the local right-of-recall ordinances, including Los Angeles City and County), remedies include hiring and reinstatement rights, back and front pay for each day during which the violation continues (calculated at the highest rate of pay possible), the value of lost benefits, and civil penalties of $100 for each employee whose rights allegedly were violated. In addition, employers found in violation of this law may be assessed “liquidated damages” of $500 per employee for each day that the violation continues until it is cured. The Labor Commissioner may issue orders for “appropriate temporary relief” after an investigation, and may seek injunctive relief in a court action to enforce the law. The law specifically provides, “The remedies, penalties, and procedures provided under this section are cumulative.”

Hospitality industry and other affected employers should prepare for these new obligations by readying forms for recall offer letters and notices of explanation for a decision not to recall, and ensuring that personnel records are updated with all the information required to be maintained for a three-year period.