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Hospitality and Business Service Employers Subject to New Recall Law in the Wake of COVID-19

APRIL 26, 2021

As California continues to lift pandemic-related restrictions on businesses, and the state continues to emerge from the COVID-19 public health crisis, the hits keep on coming for employers in the hospitality space. While already reeling from the devastating impact of the novel coronavirus upon their businesses, California hospitality and business service employers are now subject to SB 93—a vague and restrictive right of recall law recently signed by Governor Gavin Newsom that is inconsistent with multiple local ordinances already in place.

By way of this alert, Michelman & Robinson, LLP answers many of the questions raised by impacted employers about the newly enacted law.

Q. What is a right of recall ordinance in the employment context?

A. A right of recall ordinance requires certain delineated employers to call back members of their prior workforces—those that have been laid off—and give them a first chance to fill their former positions as they become available again. SB 93 does just that.

Q. What employers are covered under the SB 93?

A. Covered employers include:

  • Hotels with 50 or more rooms/suites
  • Private clubs that operate a building or complex that has 50 or more guest rooms for overnight lodging of members
  • Event centers of more than 50,000 square feet or 1,000 seats, including certain related premises, services, and parking structures
  • Airport hospitality operations that provide food, beverage, or retail at airports
  • Airport service providers such as businesses related to security, airport ticketing and check-in functions, ground-handling of aircraft, aircraft cleaning and sanitization functions, and waste removal, but excluding FAA-certified air carriers
  • Building services such as janitorial, building maintenance, or security services to office, retail or other commercial buildings

Q. When rehiring, what is a covered employer required to do under SB 93?

A. Within five business days of establishing an open position, a covered employer must offer its laid off employee(s) the job(s) that become available for which the employee is qualified. Notably, SB 93 is not retroactive and only applies to job positions that became available after the effective date of the law. The offer must be made in writing and may be delivered by hand, mail to the last known address, e-mail, or text message. Employees are deemed to be qualified if they held the same or similar positions at the time of the most recent layoff. The covered employer must give employees at least five business days from the date of receipt of an offer to accept or decline the job offer(s) in question. 

Q. What if more than one employee is entitled to preference for an available position?

A. SB 93 states that seniority applies and the employee with the greatest length of service must be given the job. That being said, jobs can be made available to multiple employees, but if more than one qualified laid off employee accepts the position, the employer must rehire the individual with the most seniority.

Q. Are there special rules that apply to hiring employees that were not laid off?

A. Yes. SB 93 requires covered employers to provide a written notice within 30 days to any laid off employee that it declines to recall based on lack of qualification. The written notice must include a list of all employees hired for the position, with their length of service with the employer, and the employer’s explanation as to why the employer did not rehire the employee being notified.

Q. What are the effective dates of SB 93 and what body is charged with enforcing the law?

A. SB 93, which creates Labor Code section 2810.8, is effective immediately and is to remain in place until December 31, 2024. The law is to be enforced by the Division of Labor Standards Enforcement (DLSE).

Q. Does SB 93 apply to all employees working for covered employers?

A. Almost, though there are some parameters. SB 93 applies to employees who have worked two hours or more per week for a covered employer. The employee must have been employed by the covered employer for 6 months or more in the 12 months preceding January 1, 2020 and have been separated from active service due to a reason related to COVID-19, including a public health directive, government shutdown order, lack of business, a reduction in force, or another economic, non-disciplinary reason related to the pandemic.

Q. Can the right to recall under SB93 be waived?

A. At this time, it is unclear whether laid off employees who signed severance agreements have waived their respective rights to recall under SB 93. What we do know is that SB 93 does allow for its waiver by a collective bargaining agreement if the waiver is set forth in clear and unambiguous terms. Also, employers should note that some cities have adopted their own ordinances prohibiting waiver of recall rights. 

Q. What is a covered employer to do about related local ordinances?

A. When considering recalling employees, covered employers should be mindful of local recall ordinances. In the event such an ordinance contradicts SB 93, the new law specifically states, “nothing in this section shall prohibit a local government agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those proscribed by this section.” Thus, employers should follow the law or ordinance that is most favorable to the employee.

Q. Are there any recordkeeping requirements associated with SB 93?

A. Yes. SB 93 contemplates a recording requirement by which covered employers must keep records of any communications with laid off employees concerning offers of employment made for three years from the date of their written notice of layoff.

Q. What should covered employers do in the wake of the enactment of SB 93?

A. It may be prudent for covered employers to begin compliance preparations. Toward that end, they should (1) list their laid off employees by classification and (2) create the forms now required by law, including a conditional offer of employment and written notice in the case a laid off employee is not being rehired for a particular position.

Of course, M&R’s employment attorneys are available to answer any of your employee recall-related questions or any others regarding COVID-19 and its impact upon the workplace.

We are working diligently to keep our clients up to date on coronavirus-related developments. Nevertheless, these developments are changing daily and, in some cases even hourly, so it is important that you make sure you are dealing with the most current information. That being said, this alert is not offered, and should not be relied on, as legal advice. You should consult an attorney for guidance and counsel regarding any specific concern or situation.