On April 16, 2021, Governor Gavin Newsom signed Senate Bill (“SB”) 93 into law, enacting Labor Code section 2810.8. This new law, which is effective immediately, provides employees in certain hospitality industries the right-to-recall if they were laid-off due to COVID-19. This right-to-recall is effective through December 31, 2024. Employers who fail to provide employees with these recall rights face substantial consequences.
What Employers Are Subject to SB 93?
SB 93 applies to certain employers in the hospitality industry or connected to the hospitality industry. These employers include:
• Airport Service Provider: An airport service provider is defined as “a business that performs, under contract with a passenger air carrier, airport facility management, or airport authority, function on the property of the airport that are directly related to the air transportation of persons, property, or mail, including but not limited to, the loading and unloading of property on aircraft, assistance to passengers…security, airport ticketing and check-in functions, ground-handling of aircraft, aircraft cleaning and sanitization functions, and waste removal. The term ‘airport service provider’ does not include an air carrier certified by the Federal Aviation Administration.”
• Airport Hospitality Employer: An airport hospitality employer is defined as “a business that prepares, delivers, inspects, or provides any other service in connection with the preparation of food or beverage for aircraft crew or passengers at an airport, or that provides food and beverage, retain, or other consumer goods or services to the public at an airport. The term airport hospitality operation does not include an air carrier certified by the Federal Aviation Administration.”
• Hotel Employers: A hotel employer is defined as owners, managers, or operators of a “residential building that is designed or used for lodging or other related services for the public, and containing 50 or more guest rooms, or suites of rooms (adjoining rooms to not constitute a suite of rooms).” The number of rooms is to be calculated based on the room count at the opening of the hotel or on December 31, 2019, whichever is greater. Importantly, employers also include any “contracted, leased, or sublet premises connected to or operated in conjunction with the building’s purpose, or providing services at the building.” This means, for example, a hotel or bar leasing space connected to a hotel would likely be subject to these provisions.
• Event Center Employers: An event center employer is an owner, manager, or operator of “a publicly or privately owned structure of more than 50,000 square feet or 1,000 seats that is used for the purposes of public performances, sporting events, business meetings, or similar events, and includes concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.” Similar to the hotel employers, event center employers broadly includes “contracted, leased, or sublet premises connected to or operated in conjunction with the event center’s purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.”
• Private Club Employers: A private club employer is “a private, membership-based business or nonprofit organization that operates a building or complex or buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members.” As with hotel employers, the number of rooms is based on the opening of the private club or the number of rooms as of December 31, 2019, whichever is greater.
• Building Service Employer: A building service employer is an employer that provides “janitorial, building maintenance, or security services” for office, retailer, or other commercial buildings.
What Employees are Covered by SB 93?
SB 93 applies to employees who were laid-off dues to COVID-19. For employees to qualify, they must have: (1) performed at least two hours of work for a covered employer; (2) worked for six months or more with the employer, including leave and vacation times; and (3) the most recent lay-off was related to the COVID-19 pandemic. This includes lay-offs related to a “public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason due to the COVID-19 pandemic.”
What Are the Employers’ Responsibilities Under SB 93?
SB 93 requires employers to offer laid-off employees an open position within five-days of the position being open. A laid-off employee is qualified for an open position if the employee held the same or similar position with the employer prior to being laid-off. The employer is obligated to contact the laid-off employee at the last known mailing address (by hand or mail), email address, and text message phone number.
If there is more than one laid-off worker who would qualify for the position, the worker with the greater length of service must be offered the position first. The employer, however, is permitted to simultaneously make conditional offers to multiple laid-off workers, with the most senior worker getting the final offer of employment. A worker has at least five business days to accept or decline an offer of employment under SB 93.
As mentioned, the requirements under SB 93 continue through the end of 2024. As such, SB 93 also requires employers covered under this section to retain employee information for at least three years, measured from the date of the written notice of layoff. This information includes: “the employee’s full legal name; the employee’s job classification at the time of separation from employment; the employee’s date of hire; the employee’s last known address of residence; the employee’s last known email address; the employee’s last known telephone number; and a copy of the written notice regarding the layoff provided to the employee and all records of communications between the employer and the employee concerning offers of employment made to the employee pursuant to this section.”
If an employer declines to recall a laid-off employee on the grounds of lack of qualifications and, instead, hires someone other than the laid-off employee, the employer must provide the laid-off worker a written notice within 30 days that includes “the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.”
SB 93 also applies in the following situations: (1) where the ownership of the employer changed after the employee was laid-off, but the new owner is conducting the same or similar operations; (2) the form of the organization changed; (3) substantially all of the employer’s assets were acquired by another entity that conducts the same or similar business using substantially the same assets; and (4) the employer relocates its operations to a different location.
Unfortunately, SB 93 is silent as to an employer’s obligations when the employer has multiple locations.
What are the Penalties for Non-Compliance?
The penalties for employers who violate SB 93 are substantial. An employer may be liable for a civil penalty of up to $100 for each employee whose rights are violated under SB 93, as well as an additional payment of liquidated damages of $500 per employee for each day the employee can prove their rights were violated until the violation has been cured. Laid-off workers may also be awarded reinstatement, as well as front or back pay while the violations continue. Importantly, enforcement of SB 93 is under the exclusive jurisdiction of the Division of Labor Standards and Enforcement (“DLSE”). That means that employees who feel their SB 93 rights have been violated must file a complaint with the DLSE. The DLSE may issue citations against employers or may institute civil actions on behalf of the aggrieved employees.
Gibbs Giden can assist you with questions about compliance with SB 93.
For more information contact:
Matthew Wallin is a senior associate in the Los Angeles office where he practices labor and employment law. He has extensive experience defending private business and public entities in litigation and advising clients on labor compliance issues.
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