California’s “Right to Recall” Law: What You Need to Know

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On April 16, 2021, California Governor Gavin Newsom signed Senate Bill (SB) 93 into law, a rehiring and retention law which requires employers in certain industries to make written job offers to employees who were laid off because of the impact of COVID-19. The law takes immediate effect and will remain in effect until December 31, 2024. Previously, some California cities adopted their own versions of local ordinances providing for a right to be recalled, including Carlsbad, Long Beach, Los Angeles, Oakland, Pasadena, San Diego, San Francisco and Santa Clara.

SB 93 is limited in application to certain industries and to certain covered employees. The bill gives California’s Division of Labor Standards Enforcement (DLSE) the right to enforce the law and the DLSE may remedy a violation by ordering hiring and reinstatement, granting front or back pay, as well as benefits the employee would have received under the employer’s benefit plan. The DLSE is also given authority to impose penalties and liquidated damages. As such, covered employers will want to immediately put a system in place for complying with the law’s requirements. The law applies equally to unionized covered employers unless the collective bargaining agreement in “clear and unambiguous terms” waives all or any part of the requirements.

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WHICH EMPLOYERS ARE COVERED?

Under SB 93, covered employers include:

  • Hotels with 50 or more guest rooms or suites of rooms. A “hotel” also includes contracted, leased or subleted premises which provide services at the building.
  • Private clubs operating a building or a complex of buildings which contain at least 50 guest rooms or suites of rooms that are offered for overnight lodging to members.
  • Businesses providing janitorial, building maintenance or security services to office, retail or other commercial buildings.
  • Event centers of more than 50,000 square feet or 1,000 seats which are used for the purpose of public performances, sporting events, business meetings or other similar events. An “event center” also includes contracted, leased or subleted premises which are connected to or operated with the event center’s purpose, such as food preparation facilities, concessions, retail stores, restaurants, bars and structured parking facilities.
  • Airport hospitality operations, which are defined to mean businesses that prepare, deliver, inspect or provide other service in connection with preparing food or beverage for aircraft crews or passengers at an airport or operations that provide food and beverage, retail or other consumer goods to the public at an airport. Airport hospitality operations does not include an air carrier that is certified by the Federal Aviation Administration.
  • Airport service providers, which are defined to cover those providing services directly related to the air transportation of persons, property or mail and includes businesses related to security, airport ticketing and check-in functions, ground handling of an aircraft, aircraft cleaning and sanitization functions and waste removal. Airport hospitality operations does not include an air carrier that is certified by the Federal Aviation Administration.

WHICH EMPLOYEES ARE COVERED?

SB 93 only extends the right to recall to certain employees. In order to be entitled to this right, the employee (1) must have worked for two or more hours per week for a covered employer, (2) was employed by the covered employer for six months or more in the 12-month period preceding January 1, 2020, and (3) was separated because of a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force or for other economic and non-disciplinary reasons related to the pandemic.

WHAT IS REQUIRED?

If a covered employer establishes an open position for which a covered employee is qualified for, within five business days, that employer must make a written offer to the covered employee at the employee’s last known physical address (either by hand or mail) and by email and text message if the employer has this information available. A covered employee is deemed to be qualified for an open position if the employee held the same or a similar position with the employer at the time of the layoff.

If more than one covered employee qualifies for the vacancy, the employer can send out conditional offers of employment to those employees. If more than one qualified covered employee accepts the position, the employer must rehire the employee with the greatest seniority.

In addition, if the employer declines to make an offer to a laid off employee because that employee was not qualified for the position, the employer is required to provide written notice within 30 days to the unqualified employee. That notice must also specify the reasons for the decision and include the length of service of the employee who was hired instead of the laid off employee.

WHAT ARE THE RECORD KEEPING OBLIGATIONS?

SB 93 requires employers to maintain certain records for three years from the date of layoff for each laid off employee. Those records are:

  • The employee’s full legal name
  • The employee’s job classification at the time of separation from employment
  • The employee’s date of hire
  • The employee’s last known address of residence
  • The employee’s last known email address
  • The employee’s last known telephone number
  • A copy of the written notice regarding the layoff provided to the employee
  • All records of communications between the employer and employee regarding offers of employment made under this law

WHAT IS THE PENALTY FOR NONCOMPLIANCE?

Penalties for noncompliance are steep. The law allows for the DLSE to impose a civil penalty of $100 for each person whose rights were violated and gives the DLSE the discretion to impose liquidated damages of $500 per day (until the employer cures the violation) for each person whose rights were violated.

In addition to the penalties, an employee may file a complaint with the DLSE, which may award the complainant (1) hiring and reinstatement rights, (2) front or back pay, (3) the value of benefits the laid off employee would have received and (4) interest on the amount due and unpaid.