New California COVID-19 “Rehiring and Retention” Law Provides Recall Rights to Laid-off Employees

Certain California employers looking to fill available job positions are now legally required to make written job offers to qualified employees previously laid off due to COVID-19. On April 16, 2021, California Governor Gavin Newsom signed Senate Bill (SB) 93 into law, which took effect immediately and expires on December 31, 2024. The new law creates California Labor Code Section 2810.8.

The following “enterprise” employers are covered under the new law:

  • Hotels that have 50 or more guest rooms,
  • Certain private clubs (including membership-based businesses and nonprofit organizations), as defined under Labor Code § 2810.8(a)(13);
  • Certain private and public event centers, as defined under Labor Code § 2810.8(a)(8);
  • Certain airport hospitality operations, as defined under Labor Code § 2810.8(a)(2);
  • Certain airport service providers, as defined under Labor Code § 2810.8(a)(3); and
  • Building service employers that provide janitorial, building maintenance, or security services to office, retail, or other commercial buildings.

Within five business days of establishing an available job position, a covered employer must offer its laid-off employees job positions that become available for which the laid-off employees are qualified.  The written offer must comply with specific notice requirements of the new law.

The laid-off employee has five business days to either accept or reject the offer. Employers may be required to make simultaneous, conditional offers of employment to multiple laid-off employees. If more than one qualified, laid-off employee accepts the position, the employer “shall offer the position to the laid-off employee with the greatest length of service based on the employee’s date of hire for the enterprise.”

A qualified, laid-off employee means an employee who:

  • “in a particular week performs at least two hours of work for an employer,”
  • “was employed by the employer for 6 months or more in the 12 months preceding January 1, 2020,”
  • was “most recent[ly] separate[ed] from active service . . . due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic,” and
  • “held the same or similar position at the enterprise at the time of the employee’s most recent layoff with the employer.”

The new law contains numerous additional obligations and required notices under some circumstances. The California Department of Labor Standards Enforcement (DLSE) enforces the new law, and laid-off employees can file a complaint directly with the DLSE. Failure to comply can result in significant liability and penalties.

Laid-off employees may be awarded:

  • hiring and reinstatement rights,
  • front pay,
  • back pay, and
  • the “value of benefits the laid-off employee would have received under the employer’s benefit plan.”

Violators may also face:

  • civil penalties of $100 for each laid-off employee whose rights were violated,
  • liquidated damages of $500 for each laid-off employee for each day the laid-off employee’s rights were violated until the violation is cured, and
  • “interest on all amounts due and unpaid” at a rate of 10 percent.

Given the immediate effect of the new law and the potential for significant liability for failure to comply, it is imperative that covered employers understand their obligations. The California Legal Services team at Employers Council is available to answer your questions about this new law and assist with the logistics of complying. Please contact us at CAInfo@employerscouncil.org.