California Enacts COVID-19 Right of Recall Law in Certain Sectors

Ervin Cohen & Jessup LLP

Ervin Cohen & Jessup LLP

Governor Newsom has signed into law Senate Bill 93, a state-wide right of recall, intended to assist California workers in sectors that have been especially hard hit by the COVID-19 pandemic. This new law, which is similar to earlier Los Angeles County and Los Angeles City COVID-19 ordinances, goes into effect immediately and will remain in effect through December 31, 2024. 

California’s new right of recall law applies to certain hotels, private clubs, event centers, airport hospitality operations and providers of janitorial, maintenance or security services to office, retail or other commercial buildings. “Hotels” are defined as residential buildings that are designated or used for public lodging or other related services with at least 50 guest rooms or suites.

The workers protected by the new law are those with at least six months of service in the 12 months preceding January 1, 2020, and whose most recent separation from active service resulted from a lack of business, reduction in workforce, a public health directive, government shutdown or other economic, non-disciplinary, COVID-19-related reasons.

When rehiring, covered employers must offer jobs to all qualified laid-off workers in order of seniority. Those workers who previously held the same or similar position who have satisfied the six month service requirement are considered qualified. The rehire offer must be in writing and workers must be given at least five business days in which to accept or decline the offer. The written offer must be sent to the last known address, email address and text message number. An employer may make simultaneous, conditional offers of employment, with the final hiring decision made based on seniority.

An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee must provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all the reasons for the decision.

All or any part of the new law may be waived by a valid collective bargaining agreement containing clear and unambiguous waiver language.

The law also applies in certain cases where ownership of an employer changes including where: (i) ownership of the employer changed after the employee was laid-off, but the new business is conducting the same or similar operations as before the COVID-19 state of emergency; (ii) the form of organization of the employer changed after the COVID-19 state of emergency; (iii) substantially all of the assets of the employer were acquired by another entity that conducts the same or similar operations using substantially the same assets; and (iv) the employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.

A claim under the new law may only be brought by the California Division of Labor Standards Enforcement. Remedies include reinstatement and damages including front and back pay and the value of lost benefits. Additionally, a violation of the law will expose the employer to a civil penalty of $100 for each employee and liquidated damages in the amount of $500 for each employee, per day an employee’s rights are violated. In an action brought by the Labor Commissioner, the court may issue preliminary and permanent injunctive relief. Employers should note that SB 93 also imposes liability on any corporate officer or executive who owns or operates an enterprise and employs or exercises control over the wages, hours or working conditions of any employee. No criminal penalties will apply for violations of the law. 

Employers are prohibited from refusing to employ, terminating or otherwise taking any adverse action against any laid-off employee for seeking to enforce their rights established, or opposing any practice prohibited by, SB 93. This prohibition also applies to any employee or laid-off employee who mistakenly, but in good faith, alleges noncompliance.

The new law permits local governments to enact ordinances that impose greater standards or establish additional enforcement provisions. Unlike the Los Angeles City and County worker recall laws, the state law does not require notice to the employer by an employee in advance of bringing a claim, and time for the employer to “cure” or fix the violation. As this provision would not impose greater employee rights, the local ordinances’ employer notice and right to cure rights would not supersede the state law.

California employers subject to the law should take care to abide by its terms; the statute allocates $6 million to the Labor Commissioner for staffing resources to implement and enforce the provisions related to the rehiring and retention of workers.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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