Late last week, California enacted SB 93, requiring specific hospitality employers to offer employees laid-off due to COVID-19 preference for new positions between now and December 31, 2024. The new law is similar to a bill the governor vetoed last year, AB 3216.

Hospitality employers should read below to determine whether this new law applies, and, if so, the requirements to implement a compliant preference system.

What Employers are Covered by SB 93?

SB 93 applies to the following “enterprises”:

  • Hotels containing 50 or more guest rooms.
  • Any contracted, leased, or sublet premises connected to or operated in conjunction with a hotel or providing services at the hotel. This might include, for example, a restaurant that leases space at a hotel.
  • Private clubs that have 50 or more guest rooms offered as overnight lodging to members.
  • Event centers of more than 50,000 square feet or 1,000 seats, including concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.
  • Any contracted, leased, or sublet premises connect to or operated in conjunction with an event center, including food preparation facilities, concessions, retail stores, restaurants, bars, and parking structures.
  • Airport hospitality operations which prepare, deliver, inspect, or provide any other service in connection with the preparation of food or beverage for aircraft crew or passengers at an airport, or that provide food and beverage, retail, or other consumer goods or services to the public at an airport.
  • Airport service providers which contract with a passenger air carrier, airport facility management, or airport authority, to perform functions at the airport directly related to the air transportation of persons, property, or mail. This includes loading and unloading of property, security, ticketing, aircraft cleaning and sanitization functions, and waste removal.
  • Providers of building service (janitorial, building maintenance, or security services) to office, retail, or other commercial buildings.

The airport-related enterprises do not include air carriers certified by the FAA, and do not apply to military bases or federally operated facilities.

SB 93 applies even to successor employers, including in circumstances where there has been a change in ownership, sale of the business, or relocation of operations. The law applies to all qualifying employers, regardless of size.

What Employees are Eligible?

For a laid-off employee to qualify, the following conditions must be met:

  1. The employee was employed by the employer for 6 months or more in 2019, working at least 2 hours a week during that time.
  2. The employee’s most recent separation from active service was due to a reason related to the COVID-19 pandemic, including:
    1. Public health directive;
    2. Government shutdown order;
    3. Lack of business;
    4. Reduction in force; or
    5. Other economic, nondisciplinary reason due to the COVID-19 pandemic.
  3. The employee must be qualified for the position. An employee is qualified if the employee held the same or similar position at the time of layoff.

How Does the Process Work?

Within 5 business days of establishing a job position, an employer must offer all job positions that become available to qualified laid-off employees. The offer must be in writing, either by hand or to the last known physical address, and by email and text message if the employer has that contact information. The laid off employee must be given at least five business days from receipt to accept or decline the offer.

If more than one laid-off employee is qualified for a position, preference goes to the individual with the greatest length of service. An employer can make simultaneous, conditional offers of employment to multiple laid-off employees; if more than one accepts, the one with the greatest length of service prevails.

If an employer declines to recall a laid-off employee and instead hires a non-qualifying individual, the employer must provide written notice to the laid-off employee within 30 days containing (1) the length of service of the individual hired; and (2) all reasons for the decision.

How is SB 93 Enforced?

The Division of Labor Standards Enforcement (DLSE) has exclusive enforcement jurisdiction. If a laid off employee files a complaint that an employer refused to employ, terminated, reduced the compensation of, or otherwise took any adverse action against an employee for asserting rights under SB 93, the DLSE can award relief including reinstatement, front and back pay, and compensation for benefits lost. The DLSE can also impose civil penalties of $100 plus liquidated damages of $500 per employee per day.

Liability is not limited to the employer, but can be extended to any person, including corporate officers and executives, who owns or operates an enterprise and exercises control over the wages, hours, or working conditions of employees.

Anything Else?

Yes, there are record-keeping requirements! For at least three years, measured from the date of written notice of an employee’s layoff, the employer must retain specified information about the employee, contact information, written layoff notices, and records of communications with the employee regarding job offers.

This state law does not restrict localities from implementing their own “right of recall” ordinances. Several have, particularly in the Los Angeles area.

The above is just a summary of the basic provisions of the new law. If you believe your business may be subject to SB 93, you should consult legal counsel to make sure you fully understand and implement these new requirements.