Right to Recall Law Hits Hospitality Industries

With More Industries to Soon to Be on the Hook

Last week, Gov. Gavin Newsom signed into law Senate Bill No. 93, which mandates a right of recall for employees in certain industries who were laid off due to the COVID-19 pandemic, effective immediately.

SB 93 enacts Labor Code Section 2810.8 and requires certain hotels, event centers, airport providers, private clubs, and commercial janitorial and building services companies to offer any open position to their “laid-off” employees who are “qualified” for the job before searching for new employees. Companies must leave that offer open to laid-off workers for five (5) business days before it hires another worker.

Will All Laid-Off Employees Be Rehired?

Not necessarily. The new law yields some uncertainty because it only requires the employer to offer the open position to the laid-off employee with the greatest “length of service.” If the employee who has been the most active with the employer declines the position, the employer can hire someone new – even if there is a larger list of laid-off employees who qualify for the job.

If the laid-off employee with the longest length of service accepts the job offer within five (5) days, then the law works as intended. If the laid-off employee does not accept the job, however, the employer can freely hire any applicant it would like – even if other laid-off employees are waiting to be rehired.

How Will the New Law Work in Real Life?

Many people have questions about how SB 93 will work in practice.

For instance, if a laid-off employee does not accept the job, does the employer have to keep them on the recall list, or should they be removed?

What if the laid-off employee does not respond? Can an employer avoid hiring anyone else on the recall list as long as it keeps checking with the most senior candidate to no avail? If the laid-off worker is employed elsewhere but needs two (2) weeks before they can start, does the employer have to wait for them? Surely, many more questions will abound when the law is applied to the real world.

At JRG Attorneys at Law, we will be here to answer them!

What If the Employee Is Not Qualified for the New Position?

SB 93 also contains a provision that requires any employer that declines to recall a laid-off employee on the grounds of lack of qualifications to provide the laid-off employee a written notice within 30 days. The notice must identify the workers hired in the laid-off employee’s place, as well as all the reasons for the employer’s decision. This provision presumably means that employers must keep track of employees who have expressed interest in a job they are not qualified for and notify them of their replacement (and the reasons for that replacement) within 30 days.

What Happens if Employers Violate the Right to Recall Law?

The penalties for violating SB 93 are stiff, as an employer may be subject to a civil penalty of $500 per employee for each day the employee can prove their rights were violated, along with an initial, one-time penalty of $100.

Additionally, laid-off employees may be awarded reinstatement, front or back pay, and lost benefits. For now, it appears that enforcement is under the exclusive jurisdiction of the Division of Labor Standards Enforcement (DLSE).

When Does the Law Go Into Effect?

This statewide law takes effect immediately with Newsom’s signature on April 16, 2021, and remains in effect until December 31, 2024. Further, many local jurisdictions, including the County of Monterey, have proposed similar “right to recall” ordinances that expand the scope of the new state law.

The County of Monterey’s proposed ordinance includes certain restaurants along with hospitality employers as defined under the ordinance. The proposed ordinance creates a private right of action for those affected laid-off employees to sue their former employers in the Superior Court of Monterey (not just with the Labor Commissioner) for damages, reinstatement, attorneys’ fees, and punitive damages.

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