California to Require Businesses to Rehire Employees Laid Off During COVID-19 Downturn

CA Health and Government COVID-19 Guidance: Week in Review

On Friday, April 16, 2021, Governor Newsom signed into law Senate Bill 93, requiring employers in several hospitality sectors to rehire workers laid off during the pandemic before filling positions with new workers.

The new law applies to employers in a variety of sectors, including:

  • Airport hospitality operations and service providers (e.g., businesses that provide consumer services such as food and beverage and retail, as well as airport facility management and support functions such as loading and unloading aircraft, security, ground-handling of aircraft, aircraft cleaning, ticketing, and check-in functions)
  • Building services (including “janitorial, building maintenance, or security services”)
  • Event centers (including publicly or privately owned structures of more than 50,000 square feet or 1,000 seats used for public performances, sporting events, meetings, etc., such as concert halls, sports arenas, racetracks and convention centers)
  • Hotels and private clubs (including hotels and clubs with 50 or more guest rooms)

SB 93 requires employers in covered sectors to offer a laid-off employee a position that becomes available if the employee held the same or a similar position when their employment was most recently terminated. Covered employers must provide at least five business days’ notice of a job offer to an eligible former employee before filling it. If multiple former employees are entitled to be rehired for a position, the employer must adhere to a preference system such as seniority to determine who will be offered the position. If an employer declines to recall a laid-off employee based on the employee’s lack of qualifications for a position, the employer must provide the laid-off employee written notice of its decision within 30 days and include the reasons for the decision in the notice.

The requirements of the new law apply to any employee who was employed for six months or more in the 12 months preceding January 1, 2020, and whose most recent separation from active service was due to a reason related to the COVID-19 pandemic. The law contains a nonexhaustive list of reasons for termination that could be “related to the COVID-19 pandemic.”

California’s Labor and Workforce Development Agency is primarily responsible for enforcing the new law. The law provides for civil sanctions for non-compliance, not criminal penalties.

The new law may be challenged in court, although a statement by the California Hotel & Lodging Association offers relatively muted criticism of the law.

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