San Francisco Offers “Right to Reemployment” For Local Workers Laid-off Due to COVID-19

Orrick - Global Employment Law Group

In an unprecedented move, on June 23, 2020 the San Francisco Board of Supervisors voted in favor of legislation that requires San Francisco employers with 100 or more employees to “offer a right to reemployment” to certain workers whom the employer laid off due to the COVID-19 pandemic and its resulting shelter-in-place orders. According to the city’s rules, this ordinance goes into immediate effect upon signature by San Francisco Mayor London Breed, which must occur within 10 calendar days of receipt of legislation. Unless reenacted, the ordinance will expire on the sixty-first day after its enactment.

Employees eligible for the “right of reemployment” include those employed for at least 90 days before the notice of a “layoff,” which is defined as a “separation from employment of 10 or more eligible employees due to the emergency” and which occurred “within a 30-day period commencing on or after February 25, 2020” – the day Mayor Breed proclaimed a state of emergency. Additionally, the layoff must have been due to lack of funds or lack of work due to COVID-19 or related shelter-in-place orders.  Employers who initiated covered layoffs after February 25, 2020 and subsequently want to replace the same or “substantially similar” positions of eligible laid off workers must first offer the workers an opportunity for reemployment to their former position(s). If multiple workers were laid off in the same job classification, employers should make reemployment offers based on seniority, defined as the earliest date of hire.

The ordinance excludes from coverage employers who work in healthcare operations (as defined by the ordinance), as well as federal, state, and local public agencies.

Other key provisions for employers include:

  • Notice Requirements:
    • Existing eligible employees must receive a notice of any COVID-19-related layoff in a language they can understand, at or before the effective date of the layoff. Any eligible workers laid off due to COVID-19 before the effective date of the ordinance must also be notified within 30 days of its enactment. These notices must include:
      • date when employee was notified of layoff;
      • date when layoff became effective;
      • a summary of the right to reemployment under the emergency ordinance; and
      • a hotline number for the Office of Economic and Workforce Development (“OEWD”), that can advise workers of their rights and provide local resources.
    • Employers must also notify the OEWD of layoffs within 30 days of the date the layoff is initiated, with some exceptions. This notice must include:
      • total # of laid off employees located in San Francisco;
      • job classification at the time of separation for each employee;
      • original hire date for each employee; and
      • date of separation from employment for each employee.
  • Retention of Records: Employers who initiated a layoff after February 25, 2020 must retain the following records for at least two years (measured from the date of the written layoff notice given to the employee) regarding each affected employee’s:
    • full legal name;
    • job classification at the time of separation;
    • date of hire;
    • last known address of residence;
    • last known email address;
    • last known telephone number; and
    • copy of the written layoff notice provided to the employee.
  • Offer and Acceptance of Reemployment: employers must “engage in good faith efforts” to notify eligible employees of reemployment offers via telephone and email, each of which have separate contact and consent requirements under the ordinance. If those methods are unavailable to the employer or otherwise unsuccessful, an attempt by certified mail or courier delivery is required.
  • Exceptions: Employers may withhold an offer of reemployment for:
    • misconduct;
    • a severance agreement executed prior to enactment of the ordinance; or
    • if the employer already rehired to the position prior to enactment of the ordinance.
  • Employees with Family Care Hardships: Eligible employees with “family care hardships” include those who are unable to work due to caring for a child whose school or place of care is either closed or unavailable due to COVID-19, and/or those using the San Francisco Paid Sick Leave Ordinance to care for a covered individual. The ordinance prohibits discrimination or adverse employment actions against such employees, and requires employers to offer reasonable accommodations upon request.
  • Employee Remedies: Eligible employees may seek recourse for violations of the ordinance in California Superior Court and be awarded:
    • Hiring and reinstatement rights;
    • Back pay for each day of the violation, calculated either by:
      • i) the average regular rate during the worker’s employment (for workers employed less than 3 years prior to layoff);
      • ii) average regular rate in the last three years (for those employed more than 3 years prior to layoff); or
      • iii) the most recent regular rate received by the employee.
    • Front pay for each day during which the violation will continue, calculated as above;
    • Value of the benefits the eligible employee would have received;
    • Reasonable attorneys’ fees and costs.

Notably, the ordinance does not limit employees’ ability to pursue any rights and remedies afforded to them under the law, including but not limited to wrongful termination and discrimination claims.

The ordinance states it is intended to address the City’s 12 percent unemployment rate, public health concerns, and other potential long-term consequences imposed by the pandemic to the City’s economic and financial health.  It further states it is intended to “support the reemergence of all non-essential businesses operating in the City . . . [,] provide economic relief directly to the affected employees and their families, . . . strengthen[] and provide[] continuity for the communities in which they live . . . . [and] aid in the revitalization of the City’s economy and the greater local economy.” Additionally, workers’ rights organizations have expressed support for the bill, the final version of which also includes amendments supported by the San Francisco Chamber of Commerce.

The ordinance is not without controversy, however.  In the days and weeks leading to its passage, the business community in San Francisco voiced strong opposition to the legislation, and in the public comment period, multiple businesses heavily criticized the ordinance on the basis that it “places a significant administrative, bureaucratic and legal burden on businesses during a time when they are struggling to stay open.” Companies admonished the Board to consider the pressures they continue to face in “keeping their staff safe and surviving the adverse economic impact that the pandemic has had on them.” Many letters suggested relieving the burden this law places on businesses by instead requiring health insurers to provide discounts or reduced premiums to impacted workers, making government funds available to workers for COBRA premiums, and/or expanding access or reduced premiums to Healthy SF, a subsidized medical care program, for impacted workers.

Although the suggestions described above were not incorporated into the ordinance, the Board did make some compromises.  First, it exempted small businesses.  As initially drafted, the ordinance would have applied to employers with 10 or more employees. Second, it removed the requirement that employers maintain the employment relationship for at least 90 days following reemployment.

The final vote in favor of the ordinance was 10-1 among the Board of Supervisors. The ordinance will now go to Mayor Breed’s desk for signature. She has the option to sign it within 10 days, return it unsigned, or veto it (although any veto may be overturned by the Board). Stay tuned for further details.

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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