What California Employers Should Know About Law on Right to Recall

The signing of Senate Bill 93 establishes a right of recall for qualified employees laid off by covered employers in certain industries due to reasons related to the COVID-19 pandemic. The law took effect immediately upon its signing on April 16, 2021 and will sunset Dec. 31, 2024.

The law (SB 93) applies to covered employers, which includes hotels, private clubs, event centers, airport hospitality operations, airport service providers and building service providers including janitorial, building maintenance or security to office, retail or other commercial buildings. The state Labor commissioner published FAQs in July 2021 to further address the law and an employer's obligations. (see Resources below)

The following is a summary of law.

Who is a Covered Employer Under SB 93?

Covered employers under SB 93 include:

• Hotels, defined as residential buildings designated or used for public lodging and other related services with 50 or more guest rooms or suites. It also includes contracted, leased or sublet premises connected to or operated in conjunction with the building’s purpose including those providing services at the building.
• Private clubs that are private, membership-based businesses or nonprofit organizations that operate a building or complex of buildings with at least 50 guest rooms or suites offered as overnight lodging to members.
• Events centers include public or private space of more than 50,000 square feet or 1,000 seats for public performances, sporting events, business meetings or similar events, and includes concert halls, stadiums, sports arenas, racetracks, coliseums and convention centers. This also includes any contracted, leased or sublet premises connected to or operated in conjunction with the event center’s purpose, including food preparation facilities, concessions, retails stores, restaurants, bars and structured parking facilities.
• Airport hospitality operations are businesses that prepare, deliver, inspect or provide any other service in connection with the preparation of food or beverage for an aircraft crew or passengers at an airport or that provide food, beverage, retail or other consumer goods or services to the public at an airport.
• Airport service providers are businesses contracted to provide services directly related to the air transportation of persons, property or mail. This also includes businesses providing security, airport ticketing and check-in functions, ground-handling of aircraft, aircraft cleaning and sanitization functions, and waste removal.
• Building service providers covers businesses providing janitorial, building maintenance or security services to office, retail or other commercial buildings.

Additionally, businesses that have changed ownership or structure also must comply with the law:

• A business whose ownership has changed but the company is conducting the same or comparable operations as before the COVID-19 state of emergency
• The corporate structure of the organization has changed
• Another entity has substantially acquired a business and conducts the same or comparable operations as before the COVID-19 state of emergency.
• Employers who have relocated their operations

Who is a Covered Employee Under SB 93?

The law applies to qualified laid-off employees, defined as those who were employed by the employer two or more hours a week for six (6) months or more in the 12 months prior to Jan. 1, 2020. “Qualified” means that the employee held the same or similar position with the employer at the time of employee’s lay off and employee was laid off for a COVID-19-related reason. While not an exclusive list, reasons could be:

• Business closure or slowdown due to a public health directive
• Government shutdown order
• Economic impacts on an employer due to the COVID-19 pandemic

What are a Covered Employer’s Obligations?

A covered employer is required to offer to covered employees all job positions available that the employee is qualified to hold. The offer must be made in writing, by hand delivery or mail, as well as by email or text message to the extent the employer has this contact information. A covered employee is deemed qualified if the individual held the same or similar position at the time of the lay-off.

The employer has five (5) business days from the time the job position is created or becomes available to contact all qualified, covered employees. Since an employer is allowed to offer an available position to more than one qualified employee, if more than one individual responds, the qualified, covered employee with the longest term of service based on hire date is entitled to the position first. Once offered a position, a laid-off employee must be given five (5) business days to accept or decline the offer.

Additionally, if an employer determines that an eligible employee is not qualified, and therefore declines to recall a laid-off employee, the employer must provide a written notice within 30 days of the employer’s decision that includes the length of service of the individual(s) hired by the employer, as well as all reasons that went into the decision not to recall the laid-off employee.

Required Recordkeeping

Covered employers must retain records related to a laid-off employee for at least three (3) years starting from the date of the written notice regarding the employee’s layoff, including:

• Employee’s full legal name
• Employee’s job classification at time of separation
• Employee’s date of hire
• Employee’s last known residence address
• Employee’s last known email address
• Employee’s last known telephone number
• A copy of the written notice of layoff
• All records of communications concerning offers of employment made to the employee

Penalties for Noncompliance with SB 93

An employee can file a complaint with the California Division of Labor Standards Enforcement (DLSE), which solely was granted exclusive jurisdiction to enforce the law. An employer potentially could face penalties that include:

• Potential reinstatement of the laid-off employee
• Compensation for front pay, back pay, lost benefits
• A $100 fine for every employee whose rights were violated and a $500 per employee per-day penalty for each day of the violation until the violation is cured.

Helpful Tips for Covered Employers

Covered employers could develop a process around employee recall that includes compliance with SB 93, as well as any applicable city or county ordinances in effect to ensure their obligations are met.

Looking Forward

Ensuring your business understands its compliance obligations should be at the forefront, especially with the risk financial penalties. Paychex HR Services can help you develop effective strategies and provide guidance that can save you time on the front end and potentially money on the back end. Paychex is here to support your business in California.

Additional Resources

• FAQs from Labor Commissioner's Office