California Establishes Right to Rehire For Certain Workers Laid Off During Pandemic

On April 16, 2021, Governor Gavin Newsom signed SB 93 into law. The bill requires employers in specified hospitality and business services-related industries to offer to rehire certain workers who were laid off during the pandemic, before offering those positions to new hires, and to notify individuals not being rehired due to lack of qualifications about the employer’s decision to hire another worker.

SB 93 is a revised version of last year’s AB 3216 (which the governor vetoed), modified in a (successful) effort to obtain the governor’s approval this time around. The bill takes effect immediately, and will remain in effect through the end of 2024. 

Covered Employers

SB 93 applies only to employers operating the following businesses:

•  Hotels containing 50 or more guest rooms or suites of rooms

•  Private clubs, defined as a “private, membership-based business or nonprofit organization that operates a building or complex of buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members”

•  Event centers of more than 50,000 square feet or 1,000 seats

•  Airport hospitality operations, defined as a business that prepares, delivers, inspects or provides any service related to food and beverage preparation for aircraft crew, passengers or the public at airports

•  Airport service providers, defined as businesses providing facility management or airport authority functions at an airport related to air transportation

•  Janitorial, building maintenance or security services providing services to office, retail, or other commercial buildings

Notably, the bill specifies that its requirements apply even where the ownership or form of organization of the employer has changed, or where the employer has relocated the operation at which a laid-off employee was previously employed.

 Covered Employees

The bill applies to “laid-off employees,” meaning: any employee (1) previously employed by the employer for at least six months during calendar year 2019; and (2) whose most recent separation from active service was due to a reason related to the COVID-19 pandemic, including a health directive, government shutdown order, lack of business, reduction in force, or other economic, non-disciplinary reason related to COVID-19.

 Requirements for Covered Employers

Rehire Offer Requirements

Within five days of establishing a position, covered employers are required to offer a laid-off employee any position for which they are qualified (any position the same as or similar to the position held by the laid-off employee at the time of layoff). The offer must be made in writing, delivered by hand to the individual’s last known physical address, and by email and text message to the extent the employer has such information for the individual. 

 In the event there are more qualified laid-off employees than available positions, the employer is required to give preference to the laid-off employee with the greatest length of prior service time based on date of hire. The employer may make simultaneous conditional offers to multiple employees (with a final offer conditioned on the length-of-service preference requirement).  Individuals receiving offers of re-hire must be given five business days from the date of receipt to accept the offer.

 Notification of Decision Not to Rehire

If an employer decides an employee is not qualified for a particular position, and accordingly decides not to recall that individual, within 30 days the employer must provide the individual  with written notice of that decision. The notice must identify the length of service of the individual(s) hired in lieu of the laid-off employee, and all reasons for the decision to not hire the laid-off employee. 

The new law provides no clear guidance as to how employers should determine whether an available position is similar enough to a laid-off employee’s previous position to trigger this notification requirement. Unless and until this provision is clarified, employers should err on the side of notifying laid-off employees of decisions to hire other individuals.

 Recordkeeping

The bill requires employers to maintain records for three years (from the date of written notice of the layoff of each laid-off employee), reflecting: the individual’s full legal name; job classification at time of layoff; date of hire; last known physical address, email address and telephone number; and copies of all written notices regarding layoff and communications between the employer and the individual regarding offers of rehire pursuant to SB 93.

Disclaimer: Laws, regulations, and guidance on matters related to COVID-19 change rapidly. Please contact your Payne & Fears attorney for current guidance.