New California Law Requires Certain Employers to Offer Jobs to Previously Laid-Off Employees

On April 16, 2021, California Gov. Gavin Newsom signed Senate Bill 93 into law. The law requires certain employers, such as those in the hospitality industry, to offer open job positions to employees who were previously laid off due to COVID-19-related reasons and adds records retention and notice requirements. The law takes effect immediately and is effective until December 31, 2024.  

At the outset, the new measure requires that certain employers offer their “laid-off employees” all job positions that become available for which they are qualified. The law defines “employer” as any person who directly or indirectly owns or operates an “enterprise” and employs or exercises a certain amount of control over the wages, hours, or working conditions of any employee. Enterprise is further defined as “a hotel, private club, event center, airport, hospitality operation, airport service provider, or the provision of building service to office, retail, or other commercial buildings.” Additionally, the law defines a “laid-off employee” as “any employee who was employed by the employer 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, including a public health directive, government shutdown, lack of business, reduction in force, or other economic, nondisciplinary reason due to the COVID-19 pandemic.” An employee is “qualified” if the employee held the same or similar position at the time of their most recent layoff.

If an employer meets the definition above and is therefore subject to the new requirements, the law also details how these employers should give notice to employees, the timeline for employees to respond to the written notice and how these employers should handle an acceptance. The employer must notify laid-off employees of an open position for which the employee is “qualified” within five business days of establishing the position. The notice must be in writing and by email and/or text if the employer possesses that information. Employees have five business days (from the date of receipt) to accept or decline the written offer. Upon receiving an acceptance, employers must offer the positions in order of preference. If more than one employee accepts a certain position, the employer must offer the position to the employee with the longest length of service based on the employee’s hire date. 

Although the law indirectly encourages employers in certain industries to hire or reinstate laid-off employees, employers may choose to hire an individual who was not laid off. If the employer chooses to hire someone besides a laid-off employee due to lack of qualification, the employer must send written notice to the laid-off employee within 30 days detailing the reasons for the decision. 

In addition to notice requirements, the new law requires records retention as well. Employers must retain certain employee records for three years, including but not limited to the layoff notice and any offers of employment. 

At a time when employers are navigating a safe return to work and/or implementing new business policies, certain employers should be mindful that the law provides for front pay, back pay and hiring and reinstatement rights, as well as potential civil penalties if specific employers fail to comply. Civil penalties include $100 per employee whose rights were violated, plus an additional $500, payable as liquidated damages, per employee for each day the rights of an employee were violated until the violation is cured. Although the new law adds front-end work for specific employers, such as those in the hospitality industry, these employers have the ability to get ahead of these requirements by implementing a system for notice and records retention (if not already in place) when a new position becomes available. Further, as California is often at the forefront of employment law developments, certain employers outside the Golden State should be on alert for similar COVID-19-related employee protections going forward.

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