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SB 93: Employers in Airport, Hotel, Janitorial, Event Space, and Other Industries Have New Lay-Off Rehire Obligations

| Apr 22, 2021 | Covid-19, Employment Law |

As vaccination rates increase exponentially, and on promises of the economy reopening come June 15, 2021, California employers are starting to increase their staffing levels by hiring. The legislative response to COVID-19 in California is marked by a patchwork of statewide statutes and local ordinances, and the “right to recall” issue is no different. Businesses that are ready to rehire should be cautious before proceeding with a “business as usual” approach, as they may be impacted by one or more of these laws. In addition, they may be impacted by SB 93, effective on April 19, 2021, which creates a right to recall for certain industries statewide.

City and County Right to Recall Legislation

In 2020, various cities and counties enacted industry-specific ordinances that give laid off employees a right to recall. In general, these ordinances require certain employers to give preference to certain former employees. For example, the City of Los Angeles, City of Long Beach, City of Oakland, City of San Diego, and City of Santa Clara ordinances require certain industries to offer available positions, in order of seniority, first to employees who previously held the same or similar position, and who had been laid off after the start of the pandemic. The City of San Francisco’s ordinance applies to a broader class of employers, focusing on size (100+ employees), rather than industry. However, the mechanics of that ordinance generally mirror other local ordinances. California’s lawmakers attempted statewide legislation last session, however, the Governor vetoed that effort in September 2020.

Senate Bill 93

Fast forward to April 2021. On April 8th, the Assembly Budget Committee amended a budget trailer bill (SB 93) to require employers to rehire certain workers. The fact that this is a budget trailer bill is significant – it would take effect immediately, and only require a majority vote to get to the governor’s desk. Faced with a percolating recall effort, Governor Newsom is in a materially different position than when he vetoed the last recall bill. Some speculated that political pressure would cause him to sign this effort into law. On April 19, 2021, Governor Newsom did just that, and SB 93 is now in effect.

SB 93 impacts employers operating a hotel, private club, event center, airport hospitality operation, airport service provider, or offering janitorial, maintenance, or security services to office, retail, or other commercial buildings. Such employers are required to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system.

What Kind of Industries Need to Comply?

  • Hotels with at least 50 rooms;
  • Private clubs which offer at least 50 rooms for overnight lodging to members;
  • Large event centers;
  • Airports (including hospitality operations and service providers); or
  • Employers offering janitorial, maintenance, or security services to office, retail, or other commercial buildings.

These terms are all defined specifically by the statute, so employers falling into these categories generally should consult with counsel to determine whether they have compliance obligations.

Does an Employer With Changed Ownership or Location Need to Comply?

Yes.Employers that have had a change in ownership or have sold all or substantially all their assets must still comply if they are conducting the same or similar operations. Similarly, if the form of the employer organization has changed, compliance with SB 93 is required. Finally, if an employer relocates operations, SB 93 still applies.

When Do Employers Have Recall Obligations and to What Employees?

As soon as they establish an open position. Within five business days, a covered employer must offer in writing to the last known address and via text message and via email (to the extent available) a laid-off employee off all positions for which they are qualified. A “Laid-off Employee” is one who was employed for six months or more in the 12 months preceding January 1, 2020, and who was separated due to COVID-19 related reasons. “Qualified” means that they held the same or similar position at the time of the last layoff. Employers must give the employee five business days to respond. Employers are permitted to make several simultaneous conditional offers to see who responds, but the final offer must be in accordance with the preference system, discussed below.

In What Order Must an Employer Offer Positions to Laid-Off Employees?

Unclear, as the statute mandates offering in order of preference, but does not define preference. The statute states that if more than one person is entitled to “preference,” then the employer must use greatest length of service when determining to whom it should offer the position to first.

What if the Employer Declines to Recall an Employee Based on Lack of Qualifications?

If someone else is hired instead, the employer must provide a written notice within 30 days, including the length of service of whomever is hired instead, and a statement of the reasons for the decision.

Other Important Items to Note

Employers are required to keep the following records for at least three years from the date of the written notice of layoff:

  • The employee’s full legal name;
  • Job classification at the time of separation from employment;
  • Date of hire;
  • Last known address of residence;
  • Last known email address;
  • Last known telephone number; and
  • A copy of the written notices regarding the layoff provided to the employee and all records of communications between the employer and the employee concerning offers of employment made to the employee.

As a final note – don’t forget about city and county ordinances! To the extent that those ordinances are more protective of an employee or impose greater standards, SB 93 does not supersede those ordinances. For example, San Francisco’s right to recall ordinance remains intact for those larger employers who are not in the industries impacted by SB 93.