SB 723: Employment: rehiring and retention: displaced workers.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2023-10-10
Current Status:
Passed
(2023-10-10: Chaptered by Secretary of State. Chapter 719, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law, until December 31, 2024, requires an employer, as defined, to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. Existing law, until December 31, 2024, also prohibits an employer from refusing to employ, terminating, reducing compensation, or taking other adverse action against a laid-off employee for seeking to enforce their rights under these provisions. These provisions are enforced by the Division of Labor Standards Enforcement, as prescribed.
Existing law defines the term laid-off employee to mean any employee who was employed by the employer for 6 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 order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
This bill would redefine laid-off employee to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason due to the COVID-19 pandemic. The bill would create a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
The bill also would extend the December 31, 2024, repeal date until December 31, 2025.
Existing law, until December 31, 2024, requires an employer, as defined, to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. Existing law, until December 31, 2024, also prohibits an employer from refusing to employ, terminating, reducing compensation, or taking other adverse action against a laid-off employee for seeking to enforce their rights under these provisions. These provisions are enforced by the Division of Labor Standards Enforcement, as prescribed.
Existing law defines the term laid-off employee to mean any employee who was employed by the employer for 6 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 order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
This bill would redefine laid-off employee to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason due to the COVID-19 pandemic. The bill would create a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
The bill also would extend the December 31, 2024, repeal date until December 31, 2025.
Existing law, until December 31, 2024, requires an employer, as defined, to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. Existing law, until December 31, 2024, also prohibits an employer from refusing to employ, terminating, reducing compensation, or taking other adverse action against a laid-off employee for seeking to enforce their rights under these provisions. These provisions are enforced by the Division of Labor Standards Enforcement, as prescribed.
Existing law defines the term laid-off employee to mean any employee who was employed by the employer for 6 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 order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
This bill would redefine laid-off employee to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason. reason due to the COVID-19 pandemic. The bill would create a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
Existing law specifies the circumstances in which these provisions apply, including, among others, if the ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the COVID-19 state of emergency, the form of organization of the employer changed after the COVID-19 state of emergency, or the employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.This bill would revise these circumstances by deleting references to the COVID-19 state of emergency and would make other related changes. TheThe bill also would delete extend the December 31, 2024, repeal date, thereby making these provisions operative indefinitely. date until December 31, 2025.
Existing law, until December 31, 2024, requires an employer, as defined, to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. Existing law, until December 31, 2024, also prohibits an employer from refusing to employ, terminating, reducing compensation, or taking other adverse action against a laid-off employee for seeking to enforce their rights under these provisions. These provisions are enforced by the Division of Labor Standards Enforcement, as prescribed.
Existing law defines the term laid-off employee to mean any employee who was employed by the employer for 6 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 order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
This bill would redefine laid-off employee to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason.
Existing law specifies the circumstances in which these provisions apply, including, among others, if the ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the COVID-19 state of emergency, the form of organization of the employer changed after the COVID-19 state of emergency, or the employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.
This bill would revise these circumstances by deleting references to the COVID-19 state of emergency and would make other related changes. The bill also would delete the December 31, 2024, repeal date, thereby making these provisions operative indefinitely.
Existing law, the Healthy Workplaces, Healthy Families Act of 2014, generally entitles an employee who works in California for the same employer for 30 or more days within a year to paid sick days, as specified. Existing law defines terms for these purposes.This bill would make a nonsubstantive change to these definitions.Existing law, the Healthy Workplaces, Healthy Families Act of 2014, generally entitles an employee who works in California for the same employer for 30 or more days within a year to paid sick days, as specified. Existing law defines terms for these purposes.
This bill would make a nonsubstantive change to these definitions.
(a)For purposes of this section, the following definitions apply:
(1)Airport means any area of land or water used or intended for landing or takeoff of aircraft including appurtenant area used or intended for airport buildings, facilities, as well as rights of way together with the buildings and facilities within the State of California, excluding any military base or federally operated facility.
(2)Airport hospitality operation means 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, retail, or other consumer goods or services to the public at an airport. The term airport hospitality operation does not include an air carrier certificated by the Federal Aviation Administration.
(3)Airport service provider means a business that performs, under contract with a passenger air carrier, airport facility management, or airport authority, functions 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 under Part 382 (commencing with Section 382.1) of Title 14 of the Code of Federal Regulations, 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 certificated by the Federal Aviation Administration.
(4)Building service means janitorial, building maintenance, or security services.
(5)Employee means any individual who in a particular week performs at least two hours of work for an employer.
(6)Employer means any person, including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, owns or operates an enterprise and employs or exercises control over the wages, hours, or working conditions of any employee. Employer also means the successor employer as set forth under paragraph (6) of subdivision (b).
(7)Enterprise means 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.
(8)Event center means 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. The term event center also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event centers purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.
(9)Hotel means a residential building that is designated or used for lodging and other related services for the public, and containing 50 or more guest rooms, or suites of rooms (adjoining rooms do not constitute a suite of rooms). Hotel also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the buildings purpose, or providing services at the building. The number of guest rooms, or suites of rooms, shall be calculated based on the room count on the opening of the hotel or on December 31, 2019, whichever is greater.
(10)Laid-off employee means any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including 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. There shall be a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
(11)Length of service means the total of all periods of time during which an employee has been in active service with the employer, based on the employees date of hire, including periods of time when the employee was on leave or on vacation.
(12)Person means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.
(13)Private club means a private, membership-based business or nonprofit organization that operates a building or complex of buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members. The number of guest rooms or suites of rooms shall be calculated based on the room count on the opening of the private club or on December 31, 2019, whichever is greater.
(b)(1)Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available after the effective date of this section for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employees most recent layoff with the employer.
(2)The employer shall offer positions to laid-off employees in an order of preference subject to paragraph (1) and this paragraph. If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employees date of hire for the enterprise.
(3)A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A business day is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the preference system set forth in paragraph (2).
(4)An employer must retain the following records for at least three years, measured from the date of the written notice regarding the layoff, for each laid-off employee: the employees full legal name; the employees job classification at the time of separation from employment; the employees date of hire; the employees last known address of residence; the employees last known email address; the employees last known telephone number; and a copy of the written notices 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.
(5)An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee shall provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.
(6)This section also applies in any of the following circumstances:
(A)The ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the COVID-19 state of emergency.
(B)The form of organization of the employer changed after the COVID-19 state of emergency.
(C)Substantially all of the assets of the employer were acquired by another entity that conducts the same or similar operations using substantially the same assets.
(D)The employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.
(c)No employer shall refuse to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee as defined in subdivision (a) for seeking to enforce their rights under this section, for participating in proceedings related to this section, opposing any practice proscribed by this section, or otherwise asserting rights under this section. This subdivision shall also apply to any employee or laid-off employee who mistakenly, but in good faith, alleges noncompliance with this section.
(d)The Division of Labor Standards Enforcement shall have exclusive jurisdiction to enforce this section. This section may be enforced only as follows:
(1)A laid off employee may file a complaint with the Division of Labor Standards Enforcement for violations of this section and may be awarded any or all of the following, as appropriate:
(A)Hiring and reinstatement rights pursuant to this section.
(B)Front pay or back pay for each day during which the violation continues, which shall be calculated at a rate of compensation not less than the highest of any of the following rates:
(i)The average regular rate of pay received by the laid-off employee during the last three years of that employees employment in the same occupation classification.
(ii)The most recent regular rate received by the laid-off employee while employed by the employer.
(iii)The regular rate received by an employee occupying the position in place of the laid-off employee that should have been employed.
(C)Value of the benefits the laid-off employee would have received under the employers benefit plan.
(2)No criminal penalties shall be imposed for violation of this section.
(3)Any employer, agent of the employer, or other person who violates or causes to be violated the provisions of this section shall be subject to a civil penalty of one hundred dollars ($100) for each employee whose rights under these provisions are violated and an additional sum payable as liquidated damages in the amount of five hundred dollars ($500), per employee, for each day the rights of an employee under this section are violated and continuing until such time as the violation is cured, which shall be recovered by the Labor Commissioner, deposited into the Labor and Workforce Development Fund, and paid to the employee as compensatory damages.
(4)The Labor Commissioner shall enforce this section, including investigating an alleged violation and ordering appropriate temporary relief to mitigate the violation pending the completion of a full investigation or hearing, through the procedures set forth in Section 98.3, 98.7, 98.74, or 1197.1, including by issuance of a citation against an employer who violates this section and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 98.74 or 1197.1, as appropriate.
(5)In an action brought by the Labor Commissioner for enforcement of this section, the court may issue preliminary and permanent injunctive relief to vindicate the rights of employees.
(6)In an administrative or civil action brought under this section, the Labor Commissioner or court, as the case may be, shall award interest on all amounts due and unpaid at the rate of interest specified in subdivision (b) of Section 3289 of the Civil Code.
(7)The remedies, penalties, and procedures provided under this section are cumulative.
(e)The Division of Labor Standards Enforcement may promulgate and enforce rules and regulations, and issue determinations and interpretations, consistent with and necessary for the implementation of this section. Those rules and regulations, determinations, and interpretations shall have the force of law and may be relied upon by employers, employees, and other persons to determine their rights and responsibilities under this section.
(f)Nothing in this section shall prohibit a local governmental agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those prescribed by this section. This section shall not be construed to limit a discharged employee or eligible employees right to bring a common law cause of action for wrongful termination.
(g)All of the provisions of this section, or any part of this section, may be waived in a valid collective bargaining agreement, but only if the waiver is explicitly set forth in that agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute or be permitted as a waiver of all or any part of the provisions of this section.
(h)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(i)This section shall remain in effect only until December 31, 2025, and as of that date is repealed.
(a)For purposes of this section, the following definitions apply:
(1)Airport means any area of land or water used or intended for landing or takeoff of aircraft including appurtenant area used or intended for airport buildings, facilities, as well as rights of way together with the buildings and facilities within the State of California, excluding any military base or federally operated facility.
(2)Airport hospitality operation means 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, retail, or other consumer goods or services to the public at an airport. The term airport hospitality operation does not include an air carrier certificated by the Federal Aviation Administration.
(3)Airport service provider means a business that performs, under contract with a passenger air carrier, airport facility management, or airport authority, functions 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 under Part 382 (commencing with Section 382.1) of Title 14 of the Code of Federal Regulations, 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 certificated by the Federal Aviation Administration.
(4)Building service means janitorial, building maintenance, or security services.
(5)Employee means any individual who in a particular week performs at least two hours of work for an employer.
(6)Employer means any person, including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, owns or operates an enterprise and employs or exercises control over the wages, hours, or working conditions of any employee. Employer also means the successor employer as set forth under paragraph (6) of subdivision (b).
(7)Enterprise means 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.
(8)Event center means 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. The term event center also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event centers purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.
(9)Hotel means a residential building that is designated or used for lodging and other related services for the public, and containing 50 or more guest rooms, or suites of rooms (adjoining rooms do not constitute a suite of rooms). Hotel also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the buildings purpose, or providing services at the building. The number of guest rooms, or suites of rooms, shall be calculated based on the room count on the opening of the hotel or on December 31, 2019, whichever is greater.
(10)Laid-off employee means any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including 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. There shall be a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
(11)Length of service means the total of all periods of time during which an employee has been in active service with the employer, based on the employees date of hire, including periods of time when the employee was on leave or on vacation.
(12)Person means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.
(13)Private club means a private, membership-based business or nonprofit organization that operates a building or complex of buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members. The number of guest rooms or suites of rooms shall be calculated based on the room count on the opening of the private club or on December 31, 2019, whichever is greater.
(b)(1)Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available after the effective date of this section for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employees most recent layoff with the employer.
(2)The employer shall offer positions to laid-off employees in an order of preference subject to paragraph (1) and this paragraph. If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employees date of hire for the enterprise.
(3)A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A business day is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the preference system set forth in paragraph (2).
(4)An employer must retain the following records for at least three years, measured from the date of the written notice regarding the layoff, for each laid-off employee: the employees full legal name; the employees job classification at the time of separation from employment; the employees date of hire; the employees last known address of residence; the employees last known email address; the employees last known telephone number; and a copy of the written notices 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.
(5)An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee shall provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.
(6)This section also applies in any of the following circumstances:
(A)The ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the COVID-19 state of emergency.
(B)The form of organization of the employer changed after the COVID-19 state of emergency.
(C)Substantially all of the assets of the employer were acquired by another entity that conducts the same or similar operations using substantially the same assets.
(D)The employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.
(c)No employer shall refuse to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee as defined in subdivision (a) for seeking to enforce their rights under this section, for participating in proceedings related to this section, opposing any practice proscribed by this section, or otherwise asserting rights under this section. This subdivision shall also apply to any employee or laid-off employee who mistakenly, but in good faith, alleges noncompliance with this section.
(d)The Division of Labor Standards Enforcement shall have exclusive jurisdiction to enforce this section. This section may be enforced only as follows:
(1)A laid off employee may file a complaint with the Division of Labor Standards Enforcement for violations of this section and may be awarded any or all of the following, as appropriate:
(A)Hiring and reinstatement rights pursuant to this section.
(B)Front pay or back pay for each day during which the violation continues, which shall be calculated at a rate of compensation not less than the highest of any of the following rates:
(i)The average regular rate of pay received by the laid-off employee during the last three years of that employees employment in the same occupation classification.
(ii)The most recent regular rate received by the laid-off employee while employed by the employer.
(iii)The regular rate received by an employee occupying the position in place of the laid-off employee that should have been employed.
(C)Value of the benefits the laid-off employee would have received under the employers benefit plan.
(2)No criminal penalties shall be imposed for violation of this section.
(3)Any employer, agent of the employer, or other person who violates or causes to be violated the provisions of this section shall be subject to a civil penalty of one hundred dollars ($100) for each employee whose rights under these provisions are violated and an additional sum payable as liquidated damages in the amount of five hundred dollars ($500), per employee, for each day the rights of an employee under this section are violated and continuing until such time as the violation is cured, which shall be recovered by the Labor Commissioner, deposited into the Labor and Workforce Development Fund, and paid to the employee as compensatory damages.
(4)The Labor Commissioner shall enforce this section, including investigating an alleged violation and ordering appropriate temporary relief to mitigate the violation pending the completion of a full investigation or hearing, through the procedures set forth in Section 98.3, 98.7, 98.74, or 1197.1, including by issuance of a citation against an employer who violates this section and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 98.74 or 1197.1, as appropriate.
(5)In an action brought by the Labor Commissioner for enforcement of this section, the court may issue preliminary and permanent injunctive relief to vindicate the rights of employees.
(6)In an administrative or civil action brought under this section, the Labor Commissioner or court, as the case may be, shall award interest on all amounts due and unpaid at the rate of interest specified in subdivision (b) of Section 3289 of the Civil Code.
(7)The remedies, penalties, and procedures provided under this section are cumulative.
(e)The Division of Labor Standards Enforcement may promulgate and enforce rules and regulations, and issue determinations and interpretations, consistent with and necessary for the implementation of this section. Those rules and regulations, determinations, and interpretations shall have the force of law and may be relied upon by employers, employees, and other persons to determine their rights and responsibilities under this section.
(f)Nothing in this section shall prohibit a local governmental agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those prescribed by this section. This section shall not be construed to limit a discharged employee or eligible employees right to bring a common law cause of action for wrongful termination.
(g)All of the provisions of this section, or any part of this section, may be waived in a valid collective bargaining agreement, but only if the waiver is explicitly set forth in that agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute or be permitted as a waiver of all or any part of the provisions of this section.
(h)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(i)This section shall remain in effect only until December 31, 2025, and as of that date is repealed.
(a)For purposes of this section, the following definitions apply:
(1)Airport means any area of land or water used or intended for landing or takeoff of aircraft including appurtenant area used or intended for airport buildings, facilities, as well as rights of way together with the buildings and facilities within the State of California, excluding any military base or federally operated facility.
(2)Airport hospitality operation means 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, retail, or other consumer goods or services to the public at an airport. The term airport hospitality operation does not include an air carrier certificated by the Federal Aviation Administration.
(3)Airport service provider means a business that performs, under contract with a passenger air carrier, airport facility management, or airport authority, functions 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 under Part 382 (commencing with Section 382.1) of Title 14 of the Code of Federal Regulations, 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 certificated by the Federal Aviation Administration.
(4)Building service means janitorial, building maintenance, or security services.
(5)Employee means any individual who in a particular week performs at least two hours of work for an employer.
(6)Employer means any person, including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, owns or operates an enterprise and employs or exercises control over the wages, hours, or working conditions of any employee. Employer also means the successor employer as set forth under paragraph (6) of subdivision (b).
(7)Enterprise means 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.
(8)Event center means 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. The term event center also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event centers purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.
(9)Hotel means a residential building that is designated or used for lodging and other related services for the public, and containing 50 or more guest rooms, or suites of rooms (adjoining rooms do not constitute a suite of rooms). Hotel also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the buildings purpose, or providing services at the building. The number of guest rooms, or suites of rooms, shall be calculated based on the room count on the opening of the hotel or on December 31, 2019, whichever is greater.
(10)Laid-off employee means any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason. reason due to the COVID-19 pandemic. There shall be a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
(11)Length of service means the total of all periods of time during which an employee has been in active service with the employer, based on the employees date of hire, including periods of time when the employee was on leave or on vacation.
(12)Person means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.
(13)Private club means a private, membership-based business or nonprofit organization that operates a building or complex of buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members. The number of guest rooms or suites of rooms shall be calculated based on the room count on the opening of the private club or on December 31, 2019, whichever is greater.
(b)(1)Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available after the effective date of this section for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employees most recent layoff with the employer.
(2)The employer shall offer positions to laid-off employees in an order of preference subject to paragraph (1) and this paragraph. If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employees date of hire for the enterprise.
(3)A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A business day is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the preference system set forth in paragraph (2).
(4)An employer must retain the following records for at least three years, measured from the date of the written notice regarding the layoff, for each laid-off employee: the employees full legal name; the employees job classification at the time of separation from employment; the employees date of hire; the employees last known address of residence; the employees last known email address; the employees last known telephone number; and a copy of the written notices 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.
(5)An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee shall provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.
(6)This section also applies in any of the following circumstances:
(A)The ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the layoff. COVID-19 state of emergency.
(B)The form of organization of the employer changed after the layoff. COVID-19 state of emergency.
(C)Substantially all of the assets of the employer were acquired by another entity that conducts the same or similar operations using substantially the same assets.
(D)The employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.
(c)No employer shall refuse to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee as defined in subdivision (a) for seeking to enforce their rights under this section, for participating in proceedings related to this section, opposing any practice proscribed by this section, or otherwise asserting rights under this section. This subdivision shall also apply to any employee or laid-off employee who mistakenly, but in good faith, alleges noncompliance with this section.
(d)The Division of Labor Standards Enforcement shall have exclusive jurisdiction to enforce this section. This section may be enforced only as follows:
(1)A laid off employee may file a complaint with the Division of Labor Standards Enforcement for violations of this section and may be awarded any or all of the following, as appropriate:
(A)Hiring and reinstatement rights pursuant to this section.
(B)Front pay or back pay for each day during which the violation continues, which shall be calculated at a rate of compensation not less than the highest of any of the following rates:
(i)The average regular rate of pay received by the laid-off employee during the last three years of that employees employment in the same occupation classification.
(ii)The most recent regular rate received by the laid-off employee while employed by the employer.
(iii)The regular rate received by an employee occupying the position in place of the laid-off employee that should have been employed.
(C)Value of the benefits the laid-off employee would have received under the employers benefit plan.
(2)No criminal penalties shall be imposed for violation of this section.
(3)Any employer, agent of the employer, or other person who violates or causes to be violated the provisions of this section shall be subject to a civil penalty of one hundred dollars ($100) for each employee whose rights under these provisions are violated and an additional sum payable as liquidated damages in the amount of five hundred dollars ($500), per employee, for each day the rights of an employee under this section are violated and continuing until such time as the violation is cured, which shall be recovered by the Labor Commissioner, deposited into the Labor and Workforce Development Fund, and paid to the employee as compensatory damages.
(4)The Labor Commissioner shall enforce this section, including investigating an alleged violation and ordering appropriate temporary relief to mitigate the violation pending the completion of a full investigation or hearing, through the procedures set forth in Section 98.3, 98.7, 98.74, or 1197.1, including by issuance of a citation against an employer who violates this section and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 98.74 or 1197.1, as appropriate.
(5)In an action brought by the Labor Commissioner for enforcement of this section, the court may issue preliminary and permanent injunctive relief to vindicate the rights of employees.
(6)In an administrative or civil action brought under this section, the Labor Commissioner or court, as the case may be, shall award interest on all amounts due and unpaid at the rate of interest specified in subdivision (b) of Section 3289 of the Civil Code.
(7)The remedies, penalties, and procedures provided under this section are cumulative.
(e)The Division of Labor Standards Enforcement may promulgate and enforce rules and regulations, and issue determinations and interpretations, consistent with and necessary for the implementation of this section. Those rules and regulations, determinations, and interpretations shall have the force of law and may be relied upon by employers, employees, and other persons to determine their rights and responsibilities under this section.
(f)Nothing in this section shall prohibit a local government governmental agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those prescribed by this section. This section shall not be construed to limit a discharged employee or eligible employees right to bring a common law cause of action for wrongful termination.
(g)All of the provisions of this section, or any part of this section, may be waived in a valid collective bargaining agreement, but only if the waiver is explicitly set forth in that agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute or be permitted as a waiver of all or any part of the provisions of this section.
(h)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(i)This section shall remain in effect only until December 31, 2025, and as of that date is repealed.
(a)For purposes of this section, the following definitions apply:
(1)Airport means any area of land or water used or intended for landing or takeoff of aircraft including appurtenant area used or intended for airport buildings, facilities, as well as rights of way together with the buildings and facilities within the State of California, excluding any military base or federally operated facility.
(2)Airport hospitality operation means 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, retail, or other consumer goods or services to the public at an airport. The term airport hospitality operation does not include an air carrier certificated by the Federal Aviation Administration.
(3)Airport service provider means a business that performs, under contract with a passenger air carrier, airport facility management, or airport authority, functions 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 under Part 382 (commencing with Section 382.1) of Title 14 of the Code of Federal Regulations, 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 certificated by the Federal Aviation Administration.
(4)Building service means janitorial, building maintenance, or security services.
(5)Employee means any individual who in a particular week performs at least two hours of work for an employer.
(6)Employer means any person, including a corporate officer or executive, who directly or indirectly or through an agent or any other person, including through the services of a temporary service or staffing agency or similar entity, owns or operates an enterprise and employs or exercises control over the wages, hours, or working conditions of any employee. Employer also means the successor employer as set forth under paragraph (6) of subdivision (b).
(7)Enterprise means 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.
(8)Event center means 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. The term event center also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the event centers purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.
(9)Hotel means a residential building that is designated or used for lodging and other related services for the public, and containing 50 or more guest rooms, or suites of rooms (adjoining rooms do not constitute a suite of rooms). Hotel also includes any contracted, leased, or sublet premises connected to or operated in conjunction with the buildings purpose, or providing services at the building. The number of guest rooms, or suites of rooms, shall be calculated based on the room count on the opening of the hotel or on December 31, 2019, whichever is greater.
(10)Laid-off employee means any employee who was employed by the employer for 6 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 employment by the employer occurred on or after March 4, 2020, and was a result of 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. reason.
(11)Length of service means the total of all periods of time during which an employee has been in active service with the employer, based on the employees date of hire, including periods of time when the employee was on leave or on vacation.
(12)Person means an individual, corporation, partnership, limited partnership, limited liability partnership, limited liability company, business trust, estate, trust, association, joint venture, agency, instrumentality, or any other legal or commercial entity, whether domestic or foreign.
(13)Private club means a private, membership-based business or nonprofit organization that operates a building or complex of buildings containing at least 50 guest rooms or suites of rooms that are offered as overnight lodging to members. The number of guest rooms or suites of rooms shall be calculated based on the room count on the opening of the private club or on December 31, 2019, whichever is greater.
(b)(1)Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or to their last known physical address, and by email and text message to the extent the employer possesses such information, all job positions that become available after the effective date of this section for which the laid-off employees are qualified. A laid-off employee is qualified for a position if the employee held the same or similar position at the enterprise at the time of the employees most recent layoff with the employer.
(2)The employer shall offer positions to laid-off employees in an order of preference subject to paragraph (1) and this paragraph. If more than one employee is entitled to preference for a position, the employer shall offer the position to the laid-off employee with the greatest length of service based on the employees date of hire for the enterprise.
(3)A laid-off employee who is offered a position pursuant to this section shall be given at least five business days, from the date of receipt, in which to accept or decline the offer. A business day is any day except Saturday, Sunday, or any official state holiday. An employer may make simultaneous, conditional offers of employment to laid-off employees, with a final offer of employment conditioned on application of the preference system set forth in paragraph (2).
(4)An employer must retain the following records for at least three years, measured from the date of the written notice regarding the layoff, for each laid-off employee: the employees full legal name; the employees job classification at the time of separation from employment; the employees date of hire; the employees last known address of residence; the employees last known email address; the employees last known telephone number; and a copy of the written notices 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.
(5)An employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee shall provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision.
(6)This section also applies in any of the following circumstances:
(A)The ownership of the employer changed after the separation from employment of a laid-off employee but the enterprise is conducting the same or similar operations as before the COVID-19 state of emergency. layoff.
(B)The form of organization of the employer changed after the COVID-19 state of emergency. layoff.
(C)Substantially all of the assets of the employer were acquired by another entity that conducts the same or similar operations using substantially the same assets.
(D)The employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.
(c)No employer shall refuse to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee as defined in subdivision (a) for seeking to enforce their rights under this section, for participating in proceedings related to this section, opposing any practice proscribed by this section, or otherwise asserting rights under this section. This subdivision shall also apply to any employee or laid-off employee who mistakenly, but in good faith, alleges noncompliance with this section.
(d)The Division of Labor Standards Enforcement shall have exclusive jurisdiction to enforce this section. This section may be enforced only as follows:
(1)A laid off employee may file a complaint with the Division of Labor Standards Enforcement for violations of this section and may be awarded any or all of the following, as appropriate:
(A)Hiring and reinstatement rights pursuant to this section.
(B)Front pay or back pay for each day during which the violation continues, which shall be calculated at a rate of compensation not less than the highest of any of the following rates:
(i)The average regular rate of pay received by the laid-off employee during the last three years of that employees employment in the same occupation classification.
(ii)The most recent regular rate received by the laid-off employee while employed by the employer.
(iii)The regular rate received by an employee occupying the position in place of the laid-off employee that should have been employed.
(C)Value of the benefits the laid-off employee would have received under the employers benefit plan.
(2)No criminal penalties shall be imposed for violation of this section.
(3)Any employer, agent of the employer, or other person who violates or causes to be violated the provisions of this section shall be subject to a civil penalty of one hundred dollars ($100) for each employee whose rights under these provisions are violated and an additional sum payable as liquidated damages in the amount of five hundred dollars ($500), per employee, for each day the rights of an employee under this section are violated and continuing until such time as the violation is cured, which shall be recovered by the Labor Commissioner, deposited into the Labor and Workforce Development Fund, and paid to the employee as compensatory damages.
(4)The Labor Commissioner shall enforce this section, including investigating an alleged violation and ordering appropriate temporary relief to mitigate the violation pending the completion of a full investigation or hearing, through the procedures set forth in Section 98.3, 98.7, 98.74, or 1197.1, including by issuance of a citation against an employer who violates this section and by filing a civil action. If a citation is issued, the procedures for issuing, contesting, and enforcing judgments for citations and civil penalties issued by the Labor Commissioner shall be the same as those set out in Section 98.74 or 1197.1, as appropriate.
(5)In an action brought by the Labor Commissioner for enforcement of this section, the court may issue preliminary and permanent injunctive relief to vindicate the rights of employees.
(6)In an administrative or civil action brought under this section, the Labor Commissioner or court, as the case may be, shall award interest on all amounts due and unpaid at the rate of interest specified in subdivision (b) of Section 3289 of the Civil Code.
(7)The remedies, penalties, and procedures provided under this section are cumulative.
(e)The Division of Labor Standards Enforcement may promulgate and enforce rules and regulations, and issue determinations and interpretations, consistent with and necessary for the implementation of this section. Those rules and regulations, determinations, and interpretations shall have the force of law and may be relied upon by employers, employees, and other persons to determine their rights and responsibilities under this section.
(f)Nothing in this section shall prohibit a local government agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those prescribed by this section. This section shall not be construed to limit a discharged employee or eligible employees right to bring a common law cause of action for wrongful termination.
(g)All of the provisions of this section, or any part of this section, may be waived in a valid collective bargaining agreement, but only if the waiver is explicitly set forth in that agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute or be permitted as a waiver of all or any part of the provisions of this section.
(h)The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(i)This section shall remain in effect only until December 31, 2024, and as of that date is repealed.SECTION 1.Section 245.5 of the Labor Code is amended to read:245.5.As used in this article:(a)Employee does not include the following:(1)An employee covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for paid sick days or a paid leave or paid time off policy that permits the use of sick days for those employees, final and binding arbitration of disputes concerning the application of its paid sick days provisions, premium wage rates for all overtime hours worked, and regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.(2)An employee in the construction industry covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and regular hourly pay of not less than 30 percent more than the state minimum wage rate, and the agreement either (A) was entered into before January 1, 2015, or (B) expressly waives the requirements of this article in clear and unambiguous terms. For purposes of this subparagraph, employee in the construction industry means an employee performing work associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, repair work, and any other work as described by Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and other similar or related occupations or trades.(3)An individual employed by an air carrier as a flight deck or cabin crew member that is subject to Title II of the federal Railway Labor Act (45 U.S.C. Sec. 151 et seq.), if the individual is provided with compensated time off equal to or exceeding the amount established in paragraph (1) of subdivision (b) of Section 246.(4)An employee of the state, city, county, city and county, district, or any other public entity who is a recipient of a retirement allowance and employed without reinstatement into the employees respective retirement system pursuant to either Article 8 (commencing with Section 21220) of Chapter 12 of Part 3 of Division 5 of Title 2 of the Government Code, or Article 8 (commencing with Section 31670) of Chapter 3 of Part 3 of Division 4 of Title 3 of the Government Code.(b)Employer means any person employing another under any appointment or contract of hire and includes the state, political subdivisions of the state, and municipalities.(c)Family member means any of the following:(1)A child, which for purposes of this article means a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis. This definition of a child is applicable regardless of age or dependency status.(2)A biological, adoptive, or foster parent, stepparent, or legal guardian of an employee or the employees spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child.(3)A spouse.(4)A registered domestic partner.(5)A grandparent.(6)A grandchild.(7)A sibling.(8)A designated person, which, for purposes of this article, means a person identified by the employee at the time the employee requests paid sick days. An employer may limit an employee to one designated person per 12-month period for paid sick days.(d)Health care provider has the same meaning as defined in Section 12945.2 of the Government Code.(e)Paid sick days means time that is compensated at the same wage as the employee normally earns during regular work hours and is provided by an employer to an employee for the purposes described in Section 246.5. REVISIONS: HeadingLine 2.As used in this article:
(a)Employee does not include the following:
(1)An employee covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for paid sick days or a paid leave or paid time off policy that permits the use of sick days for those employees, final and binding arbitration of disputes concerning the application of its paid sick days provisions, premium wage rates for all overtime hours worked, and regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.
(2)An employee in the construction industry covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of employees, premium wage rates for all overtime hours worked, and regular hourly pay of not less than 30 percent more than the state minimum wage rate, and the agreement either (A) was entered into before January 1, 2015, or (B) expressly waives the requirements of this article in clear and unambiguous terms. For purposes of this subparagraph, employee in the construction industry means an employee performing work associated with construction, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, repair work, and any other work as described by Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, and other similar or related occupations or trades.
(3)An individual employed by an air carrier as a flight deck or cabin crew member that is subject to Title II of the federal Railway Labor Act (45 U.S.C. Sec. 151 et seq.), provided that if the individual is provided with compensated time off equal to or exceeding the amount established in paragraph (1) of subdivision (b) of Section 246.
(4)An employee of the state, city, county, city and county, district, or any other public entity who is a recipient of a retirement allowance and employed without reinstatement into the employees respective retirement system pursuant to either Article 8 (commencing with Section 21220) of Chapter 12 of Part 3 of Division 5 of Title 2 of the Government Code, or Article 8 (commencing with Section 31670) of Chapter 3 of Part 3 of Division 4 of Title 3 of the Government Code.
(b)Employer means any person employing another under any appointment or contract of hire and includes the state, political subdivisions of the state, and municipalities.
(c)Family member means any of the following:
(1)A child, which for purposes of this article means a biological, adopted, or foster child, stepchild, legal ward, or a child to whom the employee stands in loco parentis. This definition of a child is applicable regardless of age or dependency status.
(2)A biological, adoptive, or foster parent, stepparent, or legal guardian of an employee or the employees spouse or registered domestic partner, or a person who stood in loco parentis when the employee was a minor child.
(3)A spouse.
(4)A registered domestic partner.
(5)A grandparent.
(6)A grandchild.
(7)A sibling.
(8)A designated person, which, for purposes of this article, means a person identified by the employee at the time the employee requests paid sick days. An employer may limit an employee to one designated person per 12-month period for paid sick days.
(d)Health care provider has the same meaning as defined in Section 12945.2 of the Government Code.
(e)Paid sick days means time that is compensated at the same wage as the employee normally earns during regular work hours and is provided by an employer to an employee for the purposes described in Section 246.5.
|
Date
|
Status
|
|---|---|
| Oct 10, 2023 | Chaptered by Secretary of State. Chapter 719, Statutes of 2023. |
| Oct 10, 2023 | Approved by the Governor. |
| Sep 21, 2023 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 14, 2023 | Assembly amendments concurred in. (Ayes 31. Noes 9. Page 2794.) Ordered to engrossing and enrolling. |
| Sep 13, 2023 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 13, 2023 | Read third time. Passed. (Ayes 58. Noes 18. Page 3356.) Ordered to the Senate. |
| Sep 7, 2023 | Read third time and amended. |
| Sep 7, 2023 | Ordered to third reading. |
| Sep 7, 2023 | Assembly Rule 69 suspended. (Ayes 62. Noes 15. Page 3010.) |
| Sep 5, 2023 | Read second time. Ordered to third reading. |
| Sep 1, 2023 | From committee: Do pass. (Ayes 11. Noes 4.) (September 1). |
| Jul 12, 2023 | July 12 set for first hearing. Placed on APPR. suspense file. |
| Jun 15, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 2.) (June 14). Re-referred to Com. on APPR. |
| Jun 15, 2023 | Coauthors revised. |
| May 26, 2023 | Referred to Com. on L. & E. |
| May 23, 2023 | In Assembly. Read first time. Held at Desk. |
| May 22, 2023 | Read third time. Passed. (Ayes 28. Noes 9. Page 1214.) Ordered to the Assembly. |
| May 16, 2023 | Read second time. Ordered to third reading. |
| May 15, 2023 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| May 9, 2023 | Set for hearing May 15. |
| May 8, 2023 | May 8 hearing postponed by committee. |
| May 1, 2023 | Set for hearing May 8. |
| Apr 26, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 4. Noes 1. Page 898.) (April 26). Re-referred to Com. on APPR. |
| Apr 13, 2023 | Set for hearing April 26. |
| Mar 29, 2023 | Re-referred to Com. on L., P.E. & R. |
| Mar 20, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar 1, 2023 | Referred to Com. on RLS. |
| Feb 17, 2023 | From printer. May be acted upon on or after March 19. |
| Feb 16, 2023 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2023 | Unfinished Business SB723 Durazo et al. Concurrence | Senate Floor |
Passed |
|
| Sep 13, 2023 | SB 723 Durazo Senate Third Reading By Kalra | Assembly Floor |
Passed |
|
| Sep 1, 2023 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jun 14, 2023 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Labor and Employment |
Passed |
|
| May 22, 2023 | Senate 3rd Reading SB723 Durazo | Senate Floor |
Passed |
|
| Apr 26, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Labor, Public Employment and Retirement |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| ACCE Action | ** Support | |
| Brea Chamber of Commerce | ** Against | |
| California Apartment Association | ** Against | |
| California Attractions And Parks Association | ** Against | |
| California Business Properties Association | ** Against | |
| California Catholic Conference | ** Support | |
| California Chamber Of Commerce | ** Against | |
| California Employment Lawyers Association | ** Support | |
| California Hotel and Lodging Association | * Against | Jun 14, 2023 |
| California Immigrant Policy Center | ** Support | |
| California Labor Federation, Afl-Cio | ** Support | |
| California Restaurant Association | * Against | Jun 14, 2023 |
| California Retailers Association | ** Against | |
| California State Council of The Society for Human Resource Management | ** Against | |
| California Teamsters | * Support | Apr 26, 2023 |
| California Travel Association | ** Against | |
| Carlsbad Chamber of Commerce | ** Against | |
| Chino Valley Chamber of Commerce | ** Against | |
| Clergy and Laity United for Economic Justice | ** Support | |
| Clue | ** Support | |
| Coalition for Economic Survival | ** Support | |
| Coalition of California Chambers – Orange County | ** Against | |
| Contra Costa Labor Council | * Support | Apr 26, 2023 |
| Corona Chamber of Commerce | ** Against | |
| County Of Los Angeles | ** Support | |
| Courage California | ** Support | |
| Danville Area Chamber of Commerce | ** Against | |
| Folsom Chamber Of Commerce | ** Against | |
| Fontana Chamber of Commerce | ** Against | |
| Fresno Chamber of Commerce | ** Against | |
| Gilroy Chamber of Commerce | ** Against | |
| Glendora Chamber of Commerce | ** Against | |
| Greater Conejo Valley Chamber of Commerce | ** Against | |
| Greater High Desert Chamber of Commerce | ** Against | |
| Greater San Fernando Valley Chamber of Commerce | ** Against | |
| Ground Game LA | ** Support | |
| hollywood chamber of commerce | ** Against | |
| hotel worker | * Support | Jun 14, 2023 |
| Housing Rights Committee of San Francisco | ** Support | |
| LA Canada Flintridge Chamber of Commerce | ** Against | |
| La Cooperative Campesina de California | * Support | Jun 14, 2023 |
| lodi district chamber of commerce | ** Against | |
| Los Angeles County | ** Support | |
| Napa Solano Central Labor Council | * Support | Apr 26, 2023 |
| National Federation Of Independent Business | ** Against | |
| North Valley Labor Federation | * Support | Apr 26, 2023 |
| Oceanside Chamber of Commerce | ** Against | |
| Official Police Garage Association Of Los Angeles | ** Against | |
| Orange County Business Council | ** Against | |
| Palos Verdes Peninsula Chamber Of Commerce | ** Against | |
| Paso Robles Chamber of Commerce | ** Against | |
| People Organized for Westside Renewal | ** Support | |
| Roseville Area Chamber Of Commerce | ** Against | |
| San Juan Capistrano Chamber of Commerce | ** Against | |
| Santa Clara County Wage Theft Coalition | ** Support | |
| Santa Clarita Valley Chamber of Commerce | ** Against | |
| Santee Chamber of Commerce | ** Against | |
| SEIU | * Support | Apr 26, 2023 |
| Simi Valley Chamber of Commerce | ** Against | |
| South County Chambers of Commerce | ** Against | |
| Strategic Actions for a Just Economy | ** Support | |
| Sunrise Movement Los Angeles | ** Support | |
| Templeton Chamber of Commerce | ** Against | |
| Thai Community Development Center | ** Support | |
| Torrance Area Chamber of Commerce | ** Against | |
| Tulare Chamber of Commerce | ** Against | |
| UAW Region 6 | * Support | Apr 26, 2023 |
| UNITE HERE Local 11 | ** Support | |
| Vacaville Chamber of Commerce | ** Against | |
| Vista Chamber Of Commerce | ** Against | |
| Westside Council Of Chambers Of Commerce | ** Against | |
| Yorba Linda Chamber of Commerce | ** Against |
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 723 |
UNFINISHED BUSINESS
Bill No: SB 723
Author: Durazo (D), et al.
Amended: 9/7/23
Vote: 21
SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 4-1, 4/26/23
AYES: Cortese, Durazo, Laird, Smallwood-Cuevas
NOES: Wilk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 28-9, 5/22/23
AYES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener
NOES: Alvarado-Gil, Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk
NO VOTE RECORDED: Eggman, Glazer, Roth
ASSEMBLY FLOOR: 58-18, 9/13/23 - See last page for vote
SUBJECT: Employment: rehiring and retention: displaced workers
SOURCE: California Labor Federation
UNITE HERE Local 11
DIGEST:
This bill extends, from December 31, 2024 to December 31, 2025, the sunset date on the existing “right to recall” rights for employees in the hospitality and service industry, and adds to these provisions a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
Assembly Amendments
revert to existing law limiting these “right to recall” rights to COVID-19 layoffs instead of any layoffs for other specified reasons as proposed in prior versions of the bill; adds a presumption that a separation due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, as specified; and extends these rights for one additional year.
ANALYSIS:
Existing law:
- Requires certain hospitality and service industry employers to offer to rehire qualified former employees who were laid off due to the COVID-19 pandemic. Among other things, the “Right to Recall” provisions:
- Requires employers to notify covered employees of specified enterprises of job openings for the same or similar positions as the ones they last held.
- Covered workers include employees at hotel or private clubs with 50 or more guest rooms, airports, airport service providers and event centers.
- Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or their last known physical address, any by email and text message (to the extent the employer possesses this information) all job positions that become available, with priority based on length of service, before new employees can be hired.
- Qualified laid-off employees must respond to notices within five days.
- Prohibits employers from refusing to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee for seeking to enforce these rights.
- Directs the Division of Labor Standards Enforcement to enforce these provisions and authorizes a laid off employee to file a complaint with DLSE for violations and entitles them to hiring and reinstatement rights, front and back pay, as specified, and the value of benefits the employee would have received under the employer’s benefit plan.
- Subject employers guilty of a violation to specified civil penalties and employees will be entitled to damages of $500 per day of violation and will be awarded damages for each day of violation until cured.
- These recall rights are effective April 16, 2021 through December 31, 2024.
(Labor Code §2810.8)
- Requires, under the Displaced Janitor Opportunity Act, regarding contracts for janitorial or building maintenance services, a successor contractor(s) or subcontractor(s) to retain, for a 60-day transition employment period, employees of the terminated contractor and subcontractor, as specified. If at any time the successor determines that fewer employees are needed, the successor contractor or subcontractor shall retain employees by seniority. (Labor Code §1060-1065)
- Requires, regarding grocery establishments, when a change in control (such as a sale or transfer) occurs, an incumbent grocery employer to maintain a preferential hiring list of eligible workers identified and hire from that list for a period of 90 days, as specified. If the successor employer determines that it requires fewer workers, the successor grocery employer shall retain eligible grocery workers by seniority, as specified. (Labor Code §2500-2522)
- Requires, regarding public transit service contracts and contracts for the collection and transportation of solid waste, a bidder to declare as part of the bid (and in exchange for a 10-percent bid preference) whether or not they will retain employees of the prior contractor/subcontractor for a 90-day transition period if awarded the contract. If, at any time, the successor contractor/subcontractor determines that fewer employees are required, the successor must retain employees by seniority, as specified. (Labor Code §1070-1076)
- Establishes within the Department of Industrial Relations (DIR) and under the direction of the Labor Commissioner, the Division of Labor Standards Enforcement (DLSE) tasked with administering and enforcing labor code provisions concerning wages, hours and working conditions. (Labor Code §56)
This bill:
- Revises the provisions of the existing COVID-19 Recall Rights for hotels, private clubs, event centers, airport hospitality operations, airport service providers or other provision of building service to office, retail or commercial buildings to:
- Extend the December 31, 2024 sunset date to December 31, 2025.
- Revise the definition of “laid-off employee” to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, as specified.
- Include a presumption that a separation from employment due to a lack of business, reduction in force, or other economic, nondisciplinary reason is due to a reason related to the COVID-19 pandemic, unless the employer establishes otherwise by a preponderance of the evidence.
Background
The COVID-19 pandemic and the shutdown orders to mitigate the spread of the virus lead to a dramatic loss of jobs and an increase in unemployment beginning in March 2020. Millions of Californians were left unemployed and in critical need of assistance to replace some of the income on which they relied to pay for essentials such as housing and food. By April 2020, the unemployment rate had surpassed previous peaks observed during the Great Recession.
In August 2020, a bill, AB 3216 (Kalra, 2020), was introduced to attempt to address what was happening on the ground to the workers in the hospitality industry. The bill would have required hospitality and airport employers to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. The bill also would have required an incumbent employer, within 15 days after the execution of a transfer document, to provide to the successor employer specified information pertaining to eligible employees and would have required the successor employer to maintain and hire from a preferential hiring list for a specified time period. AB 3216 was vetoed by the Governor.
In 2021, the Legislature approved and the Governor signed SB 93 (Committee on Budget and Fiscal Review, Chapter 16, Statutes of 2021) which provided recall/rehiring rights to employees working in the hospitality industry – including for hotels, event centers, and airport service and hospitality providers – who were laid-off due to a non-disciplinary reason related to the COVID-19 pandemic, including lack of business, a government shut-down order, or public health directive. The bill did not include the successor employer rehire requirements that AB 3216 would have included. These rehiring rights are set to end on December 31, 2024.
[NOTE: Please see the Senate Labor, Public Employment and Retirement Committee analysis on this bill for more background information and examples of the recall rights in operation and similar efforts through ordinances.]
Comments
Need for this bill? According to the author, “Though the COVID-19 pandemic has abated somewhat, employers layoff workers for many non-disciplinary reasons including any slow-down in the tourism industry, economic downturns, another public health emergency, or even repairs. Mergers of companies may also result in temporary layoffs as the new owner assesses the business. In addition, the hospitality industry is particularly sensitive to economic downturns since business and leisure travel is often the first expense cut. If the existing rehiring rights expire in 2024, many of these hospitality workers will be left again with uncertainty if they are laid off through no fault of their own. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery.”
[NOTE: Please see the Senate Labor, Public Employment and Retirement Committee analysis on this bill for more information on prior and related legislation pending this year.]
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Assembly Appropriations Committee:
- The Division of Labor Standards Enforcement (DLSE) notes minor and absorbable costs to continue slightly expanded enforcement of rehiring and retention rights. However, the Department of Finance (DOF) estimates costs of $1 million to $2 million annually (Labor Enforcement Compliance Fund).
The budget trailer bill that first established these rights for specified workers displaced due to the COVID-19 pandemic appropriated $6 million (Labor and Workforce Development Fund), available for over four years, to the Labor Commissioner for related staffing resources. This bill expands indefinitely rehiring and retention rights to specified workers laid off for any economic, non-disciplinary reason, so it is unclear why costs would not continue to average closer to $1.5 million annually. Additionally, the Department of Finance's analysis of this bill "notes that DLSE is not able to absorb any additional costs for enforcement because of an existing case backlog."
- Annual cost pressures (General Fund (GF) or Trial Court Trust Fund) of an unknown amount, potentially up to $150,000, to the courts in additional workload. In addition to administrative enforcement through DLSE, this bill extends indefinitely the right to civil enforcement through the courts. It is unclear how many actions may be filed statewide, but the estimated workload cost of one hour of court time is $1,000. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a need for increased court funding from the GF to perform existing duties. The 2023-24 state budget agreement includes $105.1 million in ongoing GF revenue to continue backfilling the TCTF for expected revenue declines.
SUPPORT: (Verified 9/13/23)
California Labor Federation, AFL-CIO (co-source)
UNITE HERE Local 11 (co-source)
ACCE Action
California Catholic Conference
California Employment Lawyers Association
California Immigrant Policy Center
Clergy and Laity United for Economic Justice
Coalition for Economic Survival
County of Los Angeles
Courage California
Ground Game LA
Housing Rights Committee of San Francisco
Los Angeles County
People Organized for Westside Renewal
Santa Clara County Wage Theft Coalition
Strategic Actions for a Just Economy
Sunrise Movement – Los Angeles
Thai Community Development Center
OPPOSITION: (Verified 9/13/23)
Brea Chamber of Commerce
California Apartment Association
California Attractions and Parks Association
California Business Properties Association
California Chamber of Commerce
California State Council of the Society for Human Resource Management
California Travel Association
Carlsbad Chamber of Commerce
Chino Valley Chamber of Commerce
Coalition of California Chambers – Orange County
Corona Chamber of Commerce
Danville Area Chamber of Commerce
Folsom Chamber of Commerce
Fontana Chamber of Commerce
Fresno Chamber of Commerce
Gilroy Chamber of Commerce
Glendora Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater High Desert Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Hollywood Chamber of Commerce
La Canada Flintridge Chamber of Commerce
Lodi District Chamber of Commerce
National Federation of Independent Business
Oceanside Chamber of Commerce
Official Police Garage Association of Los Angeles
Orange County Business Council
Palos Verdes Peninsula Chamber of Commerce
Paso Robles Chamber of Commerce
Roseville Area Chamber of Commerce
San Juan Capistrano Chamber of Commerce
Santa Clarita Valley Chamber of Commerce
Santee Chamber of Commerce
Simi Valley Chamber of Commerce
South County Chambers of Commerce
Templeton Chamber of Commerce
Torrance Area Chamber of Commerce
Tulare Chamber of Commerce
Vacaville Chamber of Commerce
Vista Chamber of Commerce
Westside Council of Chambers of Commerce
Yorba Linda Chamber of Commerce
ARGUMENTS IN SUPPORT: According to the sponsors, “Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.”
Proponents argue that, “Rehire rights also benefit employers and the economy. Evidence from past recessions shows that keeping workers connected to their jobs during downturns speeds economic recovery. This was the logic behind the federal Paycheck Protection Program that was intended to help businesses keep their workers on payroll until they could be recalled to work. Employers avoid the costly and time-intensive hiring and training process and can quickly return to full productivity. Workers avoid long-term unemployment and wage loss speeding recovery after economic shocks.”
ARGUMENTS IN OPPOSITION: A coalition of employer organizations, argue that this bill undoes legislative compromise that became SB 93 (2021). They write, “In the beginning of the COVID-19 pandemic, AB 3216 (Kalra) (2020) proposed a right to recall for hospitality workers during any state of emergency. It was vetoed due to the burden it would have placed on struggling industries and its failure to narrowly tailor its provisions to COVID-19. As part of the budget process the following year, negotiations took place between the Legislature, administration, and business community regarding a narrower version of a right to recall. Although it still faced opposition as being unnecessary and overly burdensome, the result, SB 93, was more limited in time and scope and specifically tied to the unique circumstances presented by the COVID-19 pandemic.”
Additionally, they argue that this bill seeks to, “micromanage the rehire process for affected businesses,” by, among other things:
- Slowing down the hiring process by forcing employers to repeatedly offer newly available positions to qualified employees, no matter how many times they have turned offers down, failed to respond, or explicitly declined offers.
- Essentially eliminates the use of severance agreements since employers subject to such a retention right would have any reason to offer severance.
- Forces employers to hire based on seniority, not skill.
- Exposes employers to administrative costs as any good faith error results in penalties.
ASSEMBLY FLOOR: 58-18, 9/13/23
AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Ortega, Pacheco, Papan, Pellerin, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas
NOES: Alanis, Chen, Megan Dahle, Davies, Dixon, Essayli, Flora, Vince Fong, Gallagher, Hoover, Lackey, Mathis, Jim Patterson, Joe Patterson, Sanchez, Ta, Waldron, Wallis
NO VOTE RECORDED: Stephanie Nguyen, Petrie-Norris, Quirk-Silva, Ramos
Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556
9/14/23 10:10:42
**** END ****
SENATE THIRD READING
STR Bill Id:SB 723
Author:(Durazo)
As Amended Ver:September 7, 2023
Majority vote
SUMMARY
Modifies recall and reinstatement rights for laid-off employees in the hospitality, service, and travel industries by 1) creating a presumption that a nondisciplinary separation due to lack of business, reduction in force, or other related economic reason is related to the COVID-19 pandemic; and 2) extending the December 31, 2024, repeal date, to December 31, 2025.
Major Provisions
Revises the definition of "laid-off employee" to mean any employee who was employed by the employer for six months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other economic, nondisciplinary reason related to the COVID-19 pandemic.
COMMENTS
According to a 2020 report by the Legislative Analyst's Office (LAO), "The California labor market collapsed in late March [2020] and early April [2020] due to the COVID-19 pandemic. In response to COVID-19, state and local officials took steps to limit the spread of the disease. The Governor issued a statewide stay-at-home order on March 19 [2020]. These efforts, as well as health concerns, depressed economic activity across the state. Between February [2020] and September [2020], the California economy lost a total of 1.6 million jobs. COVID-19 job losses occurred more rapidly than during earlier downturns"[1]
Additionally, in its report, the LAO noted "job losses since February [2020] generally have been concentrated among women, younger workers, less educated workers, and Latino workers. Job losses are concentrated among these groups, in part, because these workers make up a disproportionately large share of the workforce in close-contact industries that have been hardest hit by the pandemic. These industries include personal care services, which includes hairstylists, barbers, nail salon workers, and massage therapists; accommodations and food services, which includes restaurant and hotel workers; and entertainment and recreation, which includes staff at gyms, amusement parks, and golf courses."[2]
Passage of SB 93 (Budget and Fiscal Review Committee), Chapter 16, Statutes of 2021, and Local Recall Ordinances
In April 2021, Governor Newsom signed SB 93 which requires employers in hospitality and business services industries to offer new positions for similar work to employees laid off during the pandemic within five days of creating a position until December 31, 2024. The employee must have been employed for more than six months in the 12 months preceding January 1, 2020, and was laid off for nondisciplinary reasons related to the COVID-19 pandemic. In cases in which more than one laid-off employee qualifies for a position, the employer is required to offer it to the worker with the longest tenure.[3] Similar right of recall protections have been adopted in several California communities, including, among others, Santa Monica, the city and county of Los Angeles, Pasadena, Glendale and Long Beach.[4]
According to the Author
"[This bill] will give hospitality workers the right to return to their jobs when they are needed. These rehiring rights were originally established in 2021 through SB 93. This successful law has helped workers go back to work as businesses get better. By removing the sunset to the rehiring rights enacted for hospitality workers, this bill will help hospitality workers deal with economic crises, layoffs, and uncertainty and it continues to support economic recovery in the hospitality industry."
In addition, the author points out that this bill will promote equity solutions and maximize benefits for underserved and marginalized communities because, "According to a Latino Policy and Politics Institute report, from March to April 2020, over 650,000 Latinas in leisure and hospitality lost their jobs across the country. Then, from April to May 2020, the industry lost another 38,000 Latinas. In a span of two months, 43.5%, or close to 700,000 Latinas in leisure and hospitality lost their jobs. [This bill] would help hospitality workers, who are primarily women, Latinas, and immigrants, have the right to get their jobs back if they were laid off through no fault of their own and provides job security to a part of the workforce that was hit hardest by the COVID-19 pandemic."
Arguments in Support
According to the California Labor Federation, co-sponsor of this bill, "[This bill] will ensure California has a stable hospitality workforce by maintaining rehire rights when businesses reopen following layoffs due to a public health directive, government shutdown order, or economic, non-disciplinary reasons.
The hospitality, travel, event, and building services industries were hit especially hard during the pandemic. Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.
In response, the Legislature passed, and the Governor signed into law, SB 93 (2021, Chapter 16) granting rehire rights to workers in the hospitality industry who were laid-off due to reasons related to the COVID-19 pandemic. The law applies to hospitality workers at hotels, event centers, and airport service who were among the hardest hit by layoffs during the pandemic as their entire industry shutdown or severely reduced service. SB 93 ensured the most experienced and senior workers had the opportunity to return to their jobs as the hospitality industry reopened. It offered security to older workers with decades in the industry that they would be protected from discrimination or attempts to cut labor costs. The law was clearly needed as the tourist industry re-opened for business.
The rehire law has worked to protect workers and speed the economic recovery of the hospitality industry. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery."
Arguments in Opposition
A coalition of employer organizations, including the California Chamber of Commerce, in opposition, state "[This bill] dismantles [previous] negotiations by instituting a permanent right to recall for the hospitality workers covered under SB 93. The right to recall applies to all workers who are laid off for any 'economic, nondisciplinary' reason. The right to recall would apply in perpetuity any time one of the affected employers needs to conduct layoffs or a reduction in force.
Further, like AB 3216 [2020], it would also apply if there is a layoff as a result of a public health directive or government shutdown order, meaning it too could create 'a confusing patchwork of requirements in different counties at different times.'
The hospitality industry is still vulnerable to the impacts of COVID-19 and the vagaries of the economy. In addition to the significant loss of revenues over the last few years, that industry is also contending with the rising cost of goods, rising costs of rent and new construction, decrease in business travel upon which the industry depends, and worker shortages. [This bill] would put an unnecessary, undue burden on the industry at a time when it is fighting to return to where it was pre-pandemic.
[This bill] simply adds to the difficulty of hiring and running a business, it does nothing to help these businesses at a time when they are fighting to return to where they were pre-pandemic. Further, this measure creates a paperwork labyrinth with substantial penalties and does not offer any consideration for businesses who make good faith efforts to comply."
FISCAL COMMENTS
According to the Assembly Appropriations Committee:
- The Division of Labor Standards Enforcement (DLSE) notes minor and absorbable costs to continue slightly expanded enforcement of rehiring and retention rights. However, the Department of Finance (DOF) estimates costs of $1 million to $2 million annually (Labor Enforcement Compliance Fund).
The budget trailer bill that first established these rights for specified workers displaced due to the COVID-19 pandemic appropriated $6 million (Labor and Workforce Development Fund), available for over four years, to the Labor Commissioner for related staffing resources. This bill expands indefinitely rehiring and retention rights to specified workers laid off for any economic, non-disciplinary reason, so it is unclear why costs would not continue to average closer to $1.5 million annually. Additionally, the Department of Finance's analysis of this bill "notes that DLSE is not able to absorb any additional costs for enforcement because of an existing case backlog."
- Annual cost pressures (General Fund (GF) or Trial Court Trust Fund) of an unknown amount, potentially up to $150,000, to the courts in additional workload. In addition to administrative enforcement through DLSE, this bill extends indefinitely the right to civil enforcement through the courts. It is unclear how many actions may be filed statewide, but the estimated workload cost of one hour of court time is $1,000. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a need for increased court funding from the GF to perform existing duties. The 2023-24 state budget agreement includes $105.1 million in ongoing GF revenue to continue backfilling the TCTF for expected revenue declines.
VOTES
SENATE FLOOR: 28-9-3
YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener
NO: Alvarado-Gil, Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk
ABS, ABST OR NV: Eggman, Glazer, Roth
ASM LABOR AND EMPLOYMENT: 5-2-0
YES: Kalra, Haney, Ortega, Reyes, Ward
NO: Chen, Vince Fong
ASM APPROPRIATIONS: 11-4-1
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Wilson
NO: Megan Dahle, Dixon, Mathis, Sanchez
ABS, ABST OR NV: Soria
UPDATED
VERSION: September 7, 2023
CONSULTANT: Martin Vindiola / L. & E. / (916) 319-2091 FN: 0001965
SENATE THIRD READING
STR Bill Id:SB 723
Author:(Durazo)
As Amended Ver:March 20, 2023
Majority vote
SUMMARY
Modifies recall and reinstatement rights for laid-off employees in the hospitality, service, and travel industries by 1) deleting references to the COVID-19 state of emergency, instead applying layoff protections to employees for a number of circumstances and 2) deleting the December 31, 2024, repeal date, thereby making these provisions operative indefinitely.
Major Provisions
Revises the definition of "laid-off employee" to mean any employee who was employed by the employer for six months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, a reduction in workforce, or other economic, nondisciplinary reason.
COMMENTS
According to a 2020 report by the Legislative Analyst's Office (LAO), "The California labor market collapsed in late March [2020] and early April [2020] due to the COVID-19 pandemic. In response to COVID-19, state and local officials took steps to limit the spread of the disease. The Governor issued a statewide stay-at-home order on March 19 [2020]. These efforts, as well as health concerns, depressed economic activity across the state. Between February [2020] and September [2020], the California economy lost a total of 1.6 million jobs. COVID-19 job losses occurred more rapidly than during earlier downturns"[1]
Additionally, in its report, the LAO noted "job losses since February [2020] generally have been concentrated among women, younger workers, less educated workers, and Latino workers. Job losses are concentrated among these groups, in part, because these workers make up a disproportionately large share of the workforce in close-contact industries that have been hardest hit by the pandemic. These industries include personal care services, which includes hairstylists, barbers, nail salon workers, and massage therapists; accommodations and food services, which includes restaurant and hotel workers; and entertainment and recreation, which includes staff at gyms, amusement parks, and golf courses."[2]
Passage of SB 93 (Budget and Fiscal Review Committee), Chapter 16, Statutes of 2021, and Local Recall Ordinances
In April 2021, Governor Newsom signed SB 93 which requires employers in hospitality and business services industries to offer new positions for similar work to employees laid off during the pandemic within five days of creating a position until December 31, 2024. The employee must have been employed for more than six months in the 12 months preceding January 1, 2020, and was laid off for nondisciplinary reasons related to the COVID-19 pandemic. In cases in which more than one laid-off employee qualifies for a position, the employer is required to offer it to the worker with the longest tenure.[3] Similar right of recall protections have been adopted in several California communities, including, among others, Santa Monica, the city and county of Los Angeles, Pasadena, Glendale and Long Beach.[4]
According to the Author
"[This bill] will give hospitality workers the right to return to their jobs when they are needed. These rehiring rights were originally established in 2021 through SB 93. This successful law has helped workers go back to work as businesses get better. By removing the sunset to the rehiring rights enacted for hospitality workers, this bill will help hospitality workers deal with economic crises, layoffs, and uncertainty and it continues to support economic recovery in the hospitality industry."
In addition, the author points out that this bill will promote equity solutions and maximize benefits for underserved and marginalized communities because, "According to a Latino Policy and Politics Institute report, from March to April 2020, over 650,000 Latinas in leisure and hospitality lost their jobs across the country. Then, from April to May 2020, the industry lost another 38,000 Latinas. In a span of two months, 43.5%, or close to 700,000 Latinas in leisure and hospitality lost their jobs. [This bill] would help hospitality workers, who are primarily women, Latinas, and immigrants, have the right to get their jobs back if they were laid off through no fault of their own and provides job security to a part of the workforce that was hit hardest by the COVID-19 pandemic."
Arguments in Support
According to the California Labor Federation, co-sponsor of this bill, "[This bill] will ensure California has a stable hospitality workforce by maintaining rehire rights when businesses reopen following layoffs due to a public health directive, government shutdown order, or economic, non-disciplinary reasons.
The hospitality, travel, event, and building services industries were hit especially hard during the pandemic. Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.
In response, the Legislature passed, and the Governor signed into law, SB 93 (2021, Chapter 16) granting rehire rights to workers in the hospitality industry who were laid-off due to reasons related to the COVID-19 pandemic. The law applies to hospitality workers at hotels, event centers, and airport service who were among the hardest hit by layoffs during the pandemic as their entire industry shutdown or severely reduced service. SB 93 ensured the most experienced and senior workers had the opportunity to return to their jobs as the hospitality industry reopened. It offered security to older workers with decades in the industry that they would be protected from discrimination or attempts to cut labor costs. The law was clearly needed as the tourist industry re-opened for business.
The rehire law has worked to protect workers and speed the economic recovery of the hospitality industry. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery."
Arguments in Opposition
A coalition of employer organizations, including the California Chamber of Commerce, in opposition, state "[This bill] dismantles [previous] negotiations by instituting a permanent right to recall for the hospitality workers covered under SB 93. The right to recall applies to all workers who are laid off for any 'economic, nondisciplinary' reason. The right to recall would apply in perpetuity any time one of the affected employers needs to conduct layoffs or a reduction in force.
Further, like AB 3216 [2020], it would also apply if there is a layoff as a result of a public health directive or government shutdown order, meaning it too could create 'a confusing patchwork of requirements in different counties at different times.'
The hospitality industry is still vulnerable to the impacts of COVID-19 and the vagaries of the economy. In addition to the significant loss of revenues over the last few years, that industry is also contending with the rising cost of goods, rising costs of rent and new construction, decrease in business travel upon which the industry depends, and worker shortages. [This bill] would put an unnecessary, undue burden on the industry at a time when it is fighting to return to where it was pre-pandemic.
[This bill] simply adds to the difficulty of hiring and running a business, it does nothing to help these businesses at a time when they are fighting to return to where they were pre-pandemic. Further, this measure creates a paperwork labyrinth with substantial penalties and does not offer any consideration for businesses who make good faith efforts to comply."
FISCAL COMMENTS
According to the Assembly Appropriations Committee:
- The Division of Labor Standards Enforcement (DLSE) notes minor and absorbable costs to continue slightly expanded enforcement of rehiring and retention rights. However, the Department of Finance (DOF) estimates costs of $1 million to $2 million annually (Labor Enforcement Compliance Fund).
The budget trailer bill that first established these rights for specified workers displaced due to the COVID-19 pandemic appropriated $6 million (Labor and Workforce Development Fund), available for over four years, to the Labor Commissioner for related staffing resources. This bill expands indefinitely rehiring and retention rights to specified workers laid off for any economic, non-disciplinary reason, so it is unclear why costs would not continue to average closer to $1.5 million annually. Additionally, the Department of Finance's analysis of this bill "notes that DLSE is not able to absorb any additional costs for enforcement because of an existing case backlog."
- Annual cost pressures (General Fund (GF) or Trial Court Trust Fund) of an unknown amount, potentially up to $150,000, to the courts in additional workload. In addition to administrative enforcement through DLSE, this bill extends indefinitely the right to civil enforcement through the courts. It is unclear how many actions may be filed statewide, but the estimated workload cost of one hour of court time is $1,000. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a need for increased court funding from the GF to perform existing duties. The 2023-24 state budget agreement includes $105.1 million in ongoing GF revenue to continue backfilling the TCTF for expected revenue declines.
VOTES
SENATE FLOOR: 28-9-3
YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dodd, Durazo, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener
NO: Alvarado-Gil, Dahle, Grove, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk
ABS, ABST OR NV: Eggman, Glazer, Roth
ASM LABOR AND EMPLOYMENT: 5-2-0
YES: Kalra, Haney, Ortega, Reyes, Ward
NO: Chen, Vince Fong
ASM APPROPRIATIONS: 11-4-1
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Wilson
NO: Megan Dahle, Dixon, Mathis, Sanchez
ABS, ABST OR NV: Soria
UPDATED
VERSION: March 20, 2023
CONSULTANT: Martin Vindiola / L. & E. / (916) 319-2091 FN: 0001519
Date of Hearing: July 12, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
SBPCA Bill Id:SB 723
Author:(Durazo) – As Amended Ver:March 20, 2023
Policy Committee: | Labor and Employment | Vote: | 5 - 2 |
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Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill repeals the December 31, 2024 sunset date on existing law requiring an “enterprise” employer to rehire laid off employees based on a preference system and prohibiting the employer from taking adverse action against a laid-off employee seeking to enforce their rights.
This bill also repeals the limitation of this existing law to such employees laid off due to the COVID-19 pandemic, thus broadening application to any economic, non-disciplinary reason.
FISCAL EFFECT:
- The Division of Labor Standards Enforcement (DLSE) notes minor and absorbable costs to continue slightly expanded enforcement of rehiring and retention rights. However, the Department of Finance (DOF) estimates costs of $1 million to $2 million annually (Labor Enforcement Compliance Fund).
The budget trailer bill that first established these rights for specified workers displaced due to the COVID-19 pandemic appropriated $6 million (Labor and Workforce Development Fund), available for over four years, to the Labor Commissioner for related staffing resources. This bill expands indefinitely rehiring and retention rights to specified workers laid off for any economic, non-disciplinary reason, so it is unclear why costs would not continue to average closer to $1.5 million annually. Additionally, the Department of Finance’s analysis of this bill “notes that DLSE is not able to absorb any additional costs for enforcement because of an existing case backlog.”
- Annual cost pressures (General Fund (GF) or Trial Court Trust Fund) of an unknown amount, potentially up to $150,000, to the courts in additional workload. In addition to administrative enforcement through DLSE, this bill extends indefinitely the right to civil enforcement through the courts. It is unclear how many actions may be filed statewide, but the estimated workload cost of one hour of court time is $1,000. Although courts are not funded on the basis of workload, increased pressure on staff and the TCTF may create a need for increased court funding from the GF to perform existing duties. The 2023-24 state budget agreement includes $105.1 million in ongoing GF revenue to continue backfilling the TCTF for expected revenue declines.
COMMENTS:
- Purpose. According to the author:
[This bill] will give hospitality workers the right to return to their jobs when they are needed. These rehiring rights were originally established in 2021 through SB 93. This successful law has helped workers go back to work as businesses get better. By removing the sunset to the rehiring rights enacted for hospitality workers, this bill will help hospitality workers deal with economic crises, layoffs, and uncertainty and it continues to support economic recovery in the hospitality industry.
- Support and Opposition. This bill is co-sponsored by the California Labor Federation and UNITE HERE Local 11, with the latter arguing this bill makes sure “laid off workers are given the first opportunity to return to their jobs, and in doing so builds exactly the pipeline of experienced hospitality workers that the hospitality industry employers say they need to continue the recovery.” This bill is also supported by various economic justice and workers’ rights groups.
This bill is opposed by a large coalition of employer groups led by the California Chamber of Commerce, which argues this bill “will do nothing but slow down hiring and add administrative costs to a hospitality industry still grappling with the impacts of the pandemic.
- Background.
Retention Rights for Enterprise Employees. SB 93 (Committee on Budget and Fiscal Review), Chapter 16, Statutes of 2021, required, until December 31, 2024, specified employers to offer in writing all job positions that become available to qualified employees laid off during the COVID-19 pandemic, with preference given to the laid-off employee with the greatest length of service. SB 93 applied to any employer that owns or operates an “enterprise,” 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, as well as any laid-off employee employed for six months or more preceding January 1, 2020, whose separation from service was due to a reason related to the COVID-19 pandemic, including a public health directive, government shutdown order, lack of business, a reduction in force, or other pandemic-related economic, non-disciplinary reason. SB 93 allowed a laid-off employee to file a complaint of a violation with DLSE, with the employee entitled to hiring and reinstatement rights, front or back pay, and benefits and the employer subject to a civil penalty of $100 per employee whose rights were violated and an additional sum payable as liquidated damages of $500 per employee, per day, until the violation is cured, paid to the employee as compensatory damages. Enforcement can occur administratively or by filing a civil action in superior court.
Implementation of SB 93. On March 3, 2022, the Labor Commissioner announced citing Terranea Resort in Rancho Palos Verdes for violating SB 93 by not offering 53 workers their jobs back when the resort reopened, including housekeepers, banquet servers, bartenders, junior sous chefs and massage therapists. The resort was ordered to pay nearly $3.3 million in damages and penalties. Since that citation, no other enforcement actions have been publicized. This bill repeals SB 93’s sunset date and limitation to pandemic-related layoffs, thus expanding the existing law’s provisions indefinitely to an enterprise employee whose separation from employment is the result of any economic, non-disciplinary reason.
- Prior Legislation. AB 3216 (Kalra), of the 2019-20 Legislative Session, was similar to SB 93, except AB 3216 applied to all states of emergency and would have also required successor employers to maintain a preferential hiring list of eligible employees and hire from that list, as specified. AB 3216 was vetoed by Governor Newsom, who stated:
I recognize the real problem this bill is trying to fix – to ensure that workers who have been laid off due to the COVID-19 pandemic have certainty about their rehiring and job security. But, as drafted, its prescriptive provisions would take effect during any state of emergency for all layoffs, including those that may be unrelated to such emergency…
Finally, the hospitality industry and its employees have been hit hard by the economic impacts of the pandemic. I believe the requirements of this bill place too onerous a burden on employers navigating these tough challenges, and I would encourage the legislature to consider other approaches to ensure workers are not left behind.
Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081
Date of Hearing: June 14, 2023
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Ash Kalra, Chair
SBPCA Bill Id:SB 723
Author:(Durazo) – As Amended Ver:March 20, 2023
SENATE VOTE: 28-9
SUBJECT: Employment: rehiring and retention: displaced workers
SUMMARY: Modifies recall and reinstatement rights for laid-off employees in the hospitality, service, and travel industries by 1) deleting references to the COVID-19 state of emergency, instead applying layoff protections to employees for a number of circumstances and 2) deleting the December 31, 2024, repeal date, thereby making these provisions operative indefinitely. Specifically, this bill:
Revises the definition of “laid-off employee” to mean any employee who was employed by the employer for six months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, a reduction in workforce, or other economic, nondisciplinary reason.
EXISTING LAW:
- Requires, until December 31, 2024, specified employers in the hospitality, service, and travel industries to offer jobs back to their laid-off employees, as specified. (Labor Code, § 2810.8 et seq.)
- 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, as specified. (Labor Code, § 2810.8 (a)(10).)
- Requires an employer, within five business days of establishing a position, to offer its laid-off employees in writing, either by hand or to the employee's last known physical address, and by email and text message, all job positions that become available after April 16, 2021, for which the laid-off employees are qualified, as specified. (Labor Code, § 2810.8 (b)(1).)
- Requires a laid-off employee who is offered a position, pursuant to this section, to be given at least five business days, as specified, from the date of receipt, in which to accept or decline the offer. (Labor Code, § 2810.8 (b)(3).)
- Requires an employer to retain specified records on employees for at least three years, measured from the date of the written notice regarding the layoff, for each laid-off employee. (Labor Code, § 2810.8 (b)(4).)
- Requires an employer that declines to recall a laid-off employee on the grounds of lack of qualifications and instead hires someone other than a laid-off employee to provide the laid-off employee a written notice within 30 days including the length of service with the employer of those hired in lieu of that recall, along with all reasons for the decision. (Labor Code, § 2810.8 (b)(5).)
- Requires an employer to keep specified employee records, for at least three years from the layoff notice. (Labor Code, § 2810.8 (b)(4).)
- Prohibits employers from refusing to employ, terminate, reduce compensation, or otherwise take any adverse action against any laid-off employee for seeking to enforce these rights. (Labor Code, § 2810.8 (c).)
- Directs the Division of Labor Standards Enforcement (DLSE) to enforce the provisions of this section and permits a laid off employee to file a complaint with DLSE for violations of this section and entitles them to hiring and reinstatement rights, front and back pay, as specified, and the value of benefits the employee would have received under the employer’s benefit plan. (Labor Code, § 2810.8 (d)(1).)
- Provides that any employer, agent of the employer, or any other person who knowingly violates or causes to be violated the provisions outlined in this section shall be held accountable and subject to civil penalties, as specified. (Labor Code, § 2810.8 (d)(3).)
- Sunsets the provisions of this section on December 31, 2024. (Labor Code, § 2810.8 (i).)
- Establishes Cal/WARN, which requires, among other things, employers with 75 or more full-time and part-time employees at a covered establishment, as defined, to provide 60 days' notice before implementing terminations, relocations, or mass layoffs, as specified. (Lab. Code, § 1400 et seq.)
- Requires, under the Displaced Janitor Opportunity Act, a successor contractor or subcontractor to hire and retain, for a 60-day transition period, employees of the terminated contractor or subcontractor who have been employed for at least four months at the site or sites covered by the contract. (Labor Code, § 1060 et seq.)
- Requires, covered grocery establishments, when a change in control (such as a sale or transfer) occurs, to maintain a preferential hiring list of eligible workers identified and to hire from that list for a period of 90 days, as specified. If the successor employer determines that it requires fewer workers, the successor grocery employer shall retain eligible grocery workers by seniority, as specified. (Labor Code, § 2500-2522.)
FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to SR 28.8 negligible state costs.
COMMENTS: According to a 2020 report by the Legislative Analyst’s Office (LAO), “The California labor market collapsed in late March [2020] and early April [2020] due to the COVID-19 pandemic. In response to COVID-19, state and local officials took steps to limit the spread of the disease. The Governor issued a statewide stay-at-home order on March 19 [2020]. These efforts, as well as health concerns, depressed economic activity across the state. Between February [2020] and September [2020], the California economy lost a total of 1.6 million jobs. COVID-19 job losses occurred more rapidly than during earlier downturns”[1]
Additionally, in its report, the LAO noted “job losses since February [2020] generally have been concentrated among women, younger workers, less educated workers, and Latino workers. Job losses are concentrated among these groups, in part, because these workers make up a disproportionately large share of the workforce in close-contact industries that have been hardest hit by the pandemic. These industries include personal care services, which includes hairstylists, barbers, nail salon workers, and massage therapists; accommodations and food services, which includes restaurant and hotel workers; and entertainment and recreation, which includes staff at gyms, amusement parks, and golf courses.”[2]
Passage of Senate Bill 93 and Local Recall Ordinances
In April 2021, Governor Newsom signed Senate Bill 93 which requires employers in hospitality and business services industries to offer new positions for similar work to employees laid off during the pandemic within five days of creating a position until December 31, 2024. The employee must have been employed for more than six months in the 12 months preceding January 1, 2020, and was laid off for nondisciplinary reasons related to the COVID-19 pandemic. In cases in which more than one laid-off employee qualifies for a position, the employer is required to offer it to the worker with the longest tenure.[3] Similar right of recall protections have been adopted in several California communities, including, among others, Santa Monica, the city and county of Los Angeles, Pasadena, Glendale and Long Beach.[4]
According to the author, “[This bill] will give hospitality workers the right to return to their jobs when they are needed. These rehiring rights were originally established in 2021 through SB 93. This successful law has helped workers go back to work as businesses get better. By removing the sunset to the rehiring rights enacted for hospitality workers, this bill will help hospitality workers deal with economic crises, layoffs, and uncertainty and it continues to support economic recovery in the hospitality industry.”
In addition, the author points out that this bill will promote equity solutions and maximize benefits for underserved and marginalized communities because, “According to a Latino Policy and Politics Institute report, from March to April 2020, over 650,000 Latinas in leisure and hospitality lost their jobs across the country. Then, from April to May 2020, the industry lost another 38,000 Latinas. In a span of two months, 43.5%, or close to 700,000 Latinas in leisure and hospitality lost their jobs. [This bill] would help hospitality workers, who are primarily women, Latinas, and immigrants, have the right to get their jobs back if they were laid off through no fault of their own and provides job security to a part of the workforce that was hit hardest by the COVID-19 pandemic.”
Arguments in Support
According to the California Labor Federation, co-sponsor of the bill, “[This bill] will ensure California has a stable hospitality workforce by maintaining rehire rights when businesses reopen following layoffs due to a public health directive, government shutdown order, or economic, non-disciplinary reasons.
The hospitality, travel, event, and building services industries were hit especially hard during the pandemic. Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.
In response, the Legislature passed, and the Governor signed into law, SB 93 (2021, Chapter 16) granting rehire rights to workers in the hospitality industry who were laid-off due to reasons related to the COVID-19 pandemic. The law applies to hospitality workers at hotels, event centers, and airport service who were among the hardest hit by layoffs during the pandemic as their entire industry shutdown or severely reduced service. SB 93 ensured the most experienced and senior workers had the opportunity to return to their jobs as the hospitality industry reopened. It offered security to older workers with decades in the industry that they would be protected from discrimination or attempts to cut labor costs. The law was clearly needed as the tourist industry re-opened for business.
The rehire law has worked to protect workers and speed the economic recovery of the hospitality industry. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery.”
Arguments in Opposition
A coalition of employer organizations, including the California Chamber of Commerce, in opposition, state “[This bill] dismantles [previous] negotiations by instituting a permanent right to recall for the hospitality workers covered under SB 93. The right to recall applies to all workers who are laid off for any ‘economic, nondisciplinary’ reason. The right to recall would apply in perpetuity any time one of the affected employers needs to conduct layoffs or a reduction in force.
Further, like AB 3216 [2020], it would also apply if there is a layoff as a result of a public health directive or government shutdown order, meaning it too could create ‘a confusing patchwork of requirements in different counties at different times.’
The hospitality industry is still vulnerable to the impacts of COVID-19 and the vagaries of the economy. In addition to the significant loss of revenues over the last few years, that industry is also contending with the rising cost of goods, rising costs of rent and new construction, decrease in business travel upon which the industry depends, and worker shortages. [This bill] would put an unnecessary, undue burden on the industry at a time when it is fighting to return to where it was pre-pandemic.
[This bill] simply adds to the difficulty of hiring and running a business, it does nothing to help these businesses at a time when they are fighting to return to where they were pre-pandemic. Further, this measure creates a paperwork labyrinth with substantial penalties and does not offer any consideration for businesses who make good faith efforts to comply.”
Related and Prior Legislation
AB 647 (Holden) of 2023 would revise recall rights for grocery workers when there is a change of control in a grocery establishment to: 1) cover workers of a grocery distribution center; 2) provide that a separated employee who is offered a position more than 15 miles from their residence has a right to refuse such recall; and 3) create a private right of action and administrative complaint process for violations of these provisions. This bill is currently pending a hearing in the Senate Labor, Public Employment, and Retirement Committee.
AB 1356 (Haney) of 2023 would revise the California Worker Adjustment and Retraining Act (Cal/WARN) to: 1) include a "client employer" of a "labor contractor" in the definition of "employer"; and 2) increase from 60 to 90 days, the length of notice an employer must provide to employees prior to ordering terminations, relocations, or mass layoffs, as specified. This bill is currently pending referral in the Senate Rules Committee.
SB 627 (Smallwood-Cuevas) of 2023 would, among other things, require an employer, for one year after the closure of a covered establishment, to provide to all covered workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the covered establishment subject to closure as positions become available. This bill is currently pending a hearing in this Committee.
SB 725 (Smallwood-Cuevas) of 2023 would, among other things, require a successor grocery employer to provide an eligible grocery employee severance pay equal to one week of pay for each full year of employment with the incumbent grocery employer if the successor grocery employer does not hire an eligible grocery worker following a change in control or does not retain an eligible grocery worker for at least 90 days following the change in control or the eligible grocery worker’s employment commencement date. This bill is currently pending referral in the Assembly Rules Committee.
AB 1601 (Weber) Chapter 752, Statutes of 2022 prohibits a call center employer from ordering the relocation of its call center, as defined, unless 60 days before the order takes effect, the employer gives written notice of the order to affected employees.
SB 93 (Committee on Budget and Fiscal Review) Chapter 16, Statutes of 2021 requires hospitality and service industry employers, as specified, to offer to rehire qualified former employees who were laid off due to the COVID-19 pandemic. These employees must be notified for the same or similar positions as they last held.
AB 3216 (Kalra) of 2020 would have required employers that operate a hotel, private club, event center, airport hospitality operation, airport service provider, janitorial service, building maintenance or security service to recall employees previously laid-off, as specified. The bill also would have required these successor employers to maintain a preferential hiring list of eligible employees identified by the incumbent employer and hire from that list for a period of six months after the change of control and to retain those employees for a 90-day transition employment period, and offer continued employment, as specified. This bill was vetoed by Governor Newsom.
AB 359 (Gonzalez) Chapter 212, Statutes of 2015 requires, among other things, that a successor grocery employer retain their current workforce for a minimum of 90 days after a change in ownership.
SB 20 (Alarcon) Chapter 795, Statutes of 2001 established the Displaced Janitor Opportunity Act and requires a contractor who enters into a contract for janitorial and building maintenance services at a job site to retain the employees of a former contractor providing such services at the job site during a 60-day transition employment period.
REGISTERED SUPPORT / OPPOSITION:
Support
California Labor Federation (Co-Sponsor)
Unite HERE Local 11 (Co-Sponsor)
ACCE Action
California Catholic Conference
California Employment Lawyers Association
California Immigrant Policy Center
Clue (Clergy and Laity United for Economic Justice)
Coalition for Economic Survival (CES)
Courage California
Ground Game LA
Housing Rights Committee of San Francisco
People Organized for Westside Renewal
Santa Clara County Wage Theft Coalition
Strategic Actions for A Just Economy
Sunrise Movement - Los Angeles
Thai Community Development Center
Oppose
Brea Chamber of Commerce
California Apartment Association
California Attractions and Parks Association
California Business Properties Association
California Chamber of Commerce
California Hotel & Lodging Association
California Restaurant Association
California Retailers Association
California State Council of The Society for Human Resource Management (CALSHRM)
California Travel Association
Carlsbad Chamber of Commerce
Chino Valley Chamber of Commerce
Coalition of California Chambers – Orange County
Corona Chamber of Commerce
Danville Area Chamber of Commerce
Folsom Chamber of Commerce
Fontana Chamber of Commerce
Fresno Chamber of Commerce
Gilroy Chamber of Commerce
Glendora Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater High Desert Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Hollywood Chamber of Commerce
LA Canada Flintridge Chamber of Commerce
National Federation of Independent Business
Oceanside Chamber of Commerce
Official Police Garage Association of Los Angeles
Orange County Business Council
Palos Verdes Peninsula Chamber of Commerce
Paso Robles Chamber of Commerce
Roseville Area Chamber of Commerce
San Juan Capistrano Chamber of Commerce
Santa Clarita Valley Chamber of Commerce
Santee Chamber of Commerce
Simi Valley Chamber of Commerce
South County Chambers of Commerce
Templeton Chamber of Commerce
Torrance Area Chamber of Commerce
Tulare Chamber of Commerce
Vacaville Chamber of Commerce
Vista Chamber of Commerce
Westside Council of Chambers of Commerce (WC3)
Yorba Linda Chamber of Commerce
Analysis Prepared by: Martin Vindiola / L. & E. /
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 723 |
THIRD READING
Bill No: SB 723
Author: Durazo (D)
Amended: 3/20/23
Vote: 21
SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 4-1, 4/26/23
AYES: Cortese, Durazo, Laird, Smallwood-Cuevas
NOES: Wilk
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SUBJECT: Employment: rehiring and retention: displaced workers
SOURCE: California Labor Federation
UNITE HERE Local 11
DIGEST:
This bill modifies the existing “right to recall” rights for employees in the hospitality and service industry (set to sunset December 31, 2024) by 1) deleting references to the COVID-19 state of emergency and instead applies these provisions to any “laid-off employee” who was employed by the employer for 6 months or more and whose most recent separation from active employment occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason; and 2) deleting the December 31, 2024, repeal date, thereby making these provisions operative indefinitely.
ANALYSIS:
Existing law:
- Requires certain hospitality and service industry employers to offer to rehire qualified former employees who were laid off due to the COVID-19 pandemic. Among other things, the “Right to Recall” provisions:
- Requires employers to notify covered employees of specified enterprises of job openings for the same or similar positions as the ones they last held.
- Covered workers include employees at hotel or private clubs with 50 or more guest rooms, airports, airport service providers and event centers.
- Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or their last known physical address, any by email and text message (to the extent the employer possesses this information) all job positions that become available, with priority based on length of service, before new employees can be hired.
- Qualified laid-off employees must respond to notices within five days.
- Prohibits employers from refusing to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee for seeking to enforce these rights.
- Directs the Division of Labor Standards Enforcement to enforce these provisions and authorizes a laid off employee to file a complaint with DLSE for violations and entitles them to hiring and reinstatement rights, front and back pay, as specified, and the value of benefits the employee would have received under the employer’s benefit plan.
- Subject employers guilty of a violation to specified civil penalties and employees will be entitled to damages of $500 per day of violation and will be awarded damages for each day of violation until cured.
- These recall rights are effective April 16, 2021 through December 31, 2024.
(Labor Code §2810.8)
- Requires, under the Displaced Janitor Opportunity Act, regarding contracts for janitorial or building maintenance services, a successor contractor(s) or subcontractor(s) to retain, for a 60-day transition employment period, employees of the terminated contractor and subcontractor, as specified. If at any time the successor determines that fewer employees are needed, the successor contractor or subcontractor shall retain employees by seniority. (Labor Code §1060-1065)
- Requires, regarding grocery establishments, when a change in control (such as a sale or transfer) occurs, an incumbent grocery employer to maintain a preferential hiring list of eligible workers identified and hire from that list for a period of 90 days, as specified. If the successor employer determines that it requires fewer workers, the successor grocery employer shall retain eligible grocery workers by seniority, as specified. (Labor Code §2500-2522)
- Requires, regarding public transit service contracts and contracts for the collection and transportation of solid waste, a bidder to declare as part of the bid (and in exchange for a 10-percent bid preference) whether or not they will retain employees of the prior contractor/subcontractor for a 90-day transition period if awarded the contract. If, at any time, the successor contractor/subcontractor determines that fewer employees are required, the successor must retain employees by seniority, as specified. (Labor Code §1070-1076)
- Establishes within the Department of Industrial Relations (DIR) and under the direction of the Labor Commissioner, the Division of Labor Standards Enforcement (DLSE) tasked with administering and enforcing labor code provisions concerning wages, hours and working conditions. (Labor Code §56)
This bill:
- Revises the provisions of the existing COVID-19 Recall Rights for hotels, private clubs, event centers, airport hospitality operations, airport service providers or other provision of building service to office, retail or commercial buildings to:
- Delete references to the COVID-19 state of emergency.
- Delete the December 31, 2024 sunset date on the provisions, thereby making these recall requirements permanent.
- Revise the definition of “laid-off employee” to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason.
Background
The COVID-19 pandemic and the shutdown orders to mitigate the spread of the virus lead to a dramatic loss of jobs and an increase in unemployment beginning in March 2020. Millions of Californians were left unemployed and in critical need of assistance to replace some of the income on which they relied to pay for essentials such as housing and food. By April 2020, the unemployment rate had surpassed previous peaks observed during the Great Recession.
In August 2020, a bill (AB 3216 Kalra) was introduced to attempt to address what was happening on the ground to the workers in the hospitality industry. The bill required hospitality and airport employers to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. The bill would also require an incumbent employer, within 15 days after the execution of a transfer document, to provide to the successor employer specified information pertaining to eligible employees and would require the successor employer to maintain and hire from a preferential hiring list for a specified time period. AB 3216 was vetoed by the Governor.
In 2021, the Legislature approved and the Governor signed SB 93 (Committee on Budget and Fiscal Review, Chapter 16, Statutes of 2021) which provides recall/rehiring rights to employees working in the hospitality industry – including for hotels, event centers, and airport service and hospitality providers – who were laid-off due to a non-disciplinary reason related to the COVID-19 pandemic, including lack of business, a government shut-down order, or public health directive. The bill did not include the successor employer rehire requirements that AB 3216 included. These rehiring rights are set to end on December 31, 2024.
[NOTE: Please see the Senate Labor, Public Employment and Retirement Committee analysis on this bill for more background information and examples of the recall rights in operation and similar efforts through ordinances.]
Comments
Need for this bill? According to the author, “At the start of the COVID-19 pandemic, low-income workers in the hospitality industry, primarily immigrants and women of color, were laid off and anxiously waited to see if they could get their jobs back. These workers had no source of income or security and after many decades on the job, many older workers feared that employers would only rehire younger, newer workers at lower pay rates.
“Most of the job losses were among hotel housekeepers, mostly women of color over age 50. These women have the lowest statistical possibility of even being interviewed for a new job. Research has shown us that following economic recessions, women over 50 are affected the most in their experience of long-term unemployment. Jobless women are 18 percent less likely to find new work at age 50 to 61 than at age 25 to 34. At 62 or older, they are 50 percent less likely to be rehired, according to the Urban Institute.
“Though the COVID-19 pandemic has abated somewhat, employers layoff workers for many non-disciplinary reasons including any slow-down in the tourism industry, economic downturns, another public health emergency, or even repairs. Mergers of companies may also result in temporary layoffs as the new owner assesses the business. In addition, the hospitality industry is particularly sensitive to economic downturns since business and leisure travel is often the first expense cut. If the existing rehiring rights expire in 2024, many of these hospitality workers will be left again with uncertainty if they are laid off through no fault of their own. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery.”
Related/Prior Legislation
SB 627 (Smallwood-Cuevas, 2023) requires an employer, for one year after the closure of a covered establishment, to provide to all covered workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the covered establishment subject to closure as positions become available. SB 627 applies to a business in California consisting of 100 or more chain establishments nationally that share a common brand and are owned and operated by the same parent company. SB 627 is pending in Senate Appropriations Committee.
SB 725 (Smallwood-Cuevas, 2023) requires, among other things, a successor grocery employer to provide an eligible grocery employee severance pay equal to one week of pay for each full year of employment with the incumbent employer if the successor grocery employer does not hire an eligible grocery worker following a change in control or does not retain an eligible grocery worker for at least 90 days, as specified. SB 725 is pending on the Senate Floor.
AB 1356 (Haney, 2023) makes, among other things, changes to the California WARN Act provisions to increase the notice requirement from 60 to 90 days prior to a mass layoff and would revise the definition of “covered establishment.” Pending in Assembly Appropriations Committee.
SB 93 (Committee on Budget and Fiscal Review, Chapter 16, Statutes of 2021) was a trailer bill that made various statutory changes to implement rehiring rights for hospitality, airports, airport service providers and event center rehiring rights for workers who were laid off for reasons related to the COVID-19 pandemic with a December 31, 2024 sunset date.
SB 3216 (Kalra, 2020) would have required employers that operate a hotel, private club, event center, airport hospitality operation, airport service provider, janitorial service, building maintenance or security service to recall employees previously laid-off, as specified. The bill also would have required these successor employers to maintain a preferential hiring list of eligible employees identified by the incumbent employer and hire from that list for a period of six months after the change of control and to retain those employees for a 90-day transition employment period, and offer continued employment, as specified. The bill was vetoed by the Governor.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 5/16/23)
California Labor Federation, AFL-CIO (co-source)
UNITE HERE Local 11 (co-source)
California Immigrant Policy Center
OPPOSITION: (Verified 5/16/23)
Brea Chamber of Commerce
California Apartment Association
California Attractions and Parks Association
California Business Properties Association
California Chamber of Commerce
California Hotel & Lodging Association
California Restaurant Association
California Retailers Association
California State Council of the Society for Human Resource Management
California Travel Association
Carlsbad Chamber of Commerce
Chino Valley Chamber of Commerce
Coalition of California Chambers – Orange County
Corona Chamber of Commerce
Danville Area Chamber of Commerce
Folsom Chamber of Commerce
Fontana Chamber of Commerce
Fresno Chamber of Commerce
Gilroy Chamber of Commerce
Glendora Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater High Desert Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Hollywood Chamber of Commerce
LA Canada Flintridge Chamber of Commerce
National Federation of Independent Business
Oceanside Chamber of Commerce
Official Police Garage Association of Los Angeles
Orange County Business Council
Palos Verdes Peninsula Chamber of Commerce
Paso Robles Chamber of Commerce
Roseville Area Chamber of Commerce
San Juan Capistrano Chamber of Commerce
Santa Clarita Valley Chamber of Commerce
Santee Chamber of Commerce
Simi Valley Chamber of Commerce
South County Chambers of Commerce
Templeton Chamber of Commerce
Torrance Area Chamber of Commerce
Tulare Chamber of Commerce
Vacaville Chamber of Commerce
Vista Chamber of Commerce
Yorba Linda Chamber of Commerce
ARGUMENTS IN SUPPORT: According to the sponsors, “Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.”
Proponents argue that, “Rehire rights also benefit employers and the economy. Evidence from past recessions shows that keeping workers connected to their jobs during downturns speeds economic recovery. This was the logic behind the federal Paycheck Protection Program that was intended to help businesses keep their workers on payroll until they could be recalled to work. Employers avoid the costly and time-intensive hiring and training process and can quickly return to full productivity. Workers avoid long-term unemployment and wage loss speeding recovery after economic shocks.”
ARGUMENTS IN OPPOSITION: A coalition of employer organizations, argue that SB 723 undoes legislative compromise that became SB 93 (2021). They write, “In the beginning of the COVID-19 pandemic, AB 3216 (Kalra) (2020) proposed a right to recall for hospitality workers during any state of emergency. It was vetoed due to the burden it would have placed on struggling industries and its failure to narrowly tailor its provisions to COVID-19. As part of the budget process the following year, negotiations took place between the Legislature, administration, and business community regarding a narrower version of a right to recall. Although it still faced opposition as being unnecessary and overly burdensome, the result, SB 93, was more limited in time and scope and specifically tied to the unique circumstances presented by the COVID-19 pandemic. It had a sunset date of December 31, 2024. Now, even before that sunset date, SB 723 dismantles those negotiations by instituting a permanent right to recall for the hospitality workers covered under SB 93.”
Additionally, they argue, the bill “seeks to forever micromanage the rehire process for affected businesses,” by, among other things:
- Slowing down the hiring process by forcing employers to repeatedly offer newly available positions to qualified employees, no matter how many times they have turned offers down, failed to respond, or explicitly declined offers.
- Essentially eliminates the use of severance agreements since employers subject to such a retention right would have any reason to offer severance.
- Forces employers to hire based on seniority, not skill.
- Exposes employers to administrative costs as any good faith error results in penalties.
Additional opposition, from the California Hotel & Lodging Association, notes the complexities and time delays SB 93 has caused and writes, “while simultaneous offers can be submitted, the required five-day waiting period means that if one employee who has higher seniority does not respond (this happens often when the former employee has changed careers or moved), the hotel must wait the full five days before a lower-seniority employee who is eager to resume employment (some may be under time pressures to resume employment as quickly as possible) may be hired for the position. Again, on a singular basis, this may not seem to be a deleterious challenge to the employer, however, when a hotel is attempting to restart a range of operations and rehire employees for a multitude of positions
which are reliant upon one another to operate the hotel, these delays add up to create timing difficulties, increase costs, and render it unnecessarily difficult to get people re-employed.”
Prepared by: Alma Perez-Schwab / L., P.E. & R. / (916) 651-1556
5/17/23 15:09:41
**** END ****
SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT
Senator Dave Cortese, Chair
2023 - 2024 Regular
Bill No: SB 723 Hearing Date: April 26, 2023
Author: | Durazo | ||
Version: | March 20, 2023 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Alma Perez-Schwab | ||
SUBJECT: Employment: rehiring and retention: displaced workers
KEY ISSUES
Should existing provisions requiring hotels, private clubs, event centers, airport or office hospitality operations and airport service providers to recall (re-hire) workers who were previously laid-off due to COVID-19 be made permanent?
Should the new permanent provisions apply to all workers laid off as a result of a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason?
ANALYSIS
Existing law:
- Requires certain hospitality and service industry employers to offer to rehire qualified former employees who were laid off due to the COVID-19 pandemic. Among other things, the “Right to Recall” provisions:
- Requires employers to notify covered employees of specified enterprises of job openings for the same or similar positions as the ones they last held.
- Covered workers include employees at hotel or private clubs with 50 or more guest rooms, airports, airport service providers and event centers.
- Within five business days of establishing a position, an employer shall offer its laid-off employees in writing, either by hand or their last known physical address, any by email and text message (to the extent the employer possesses this information) all job positions that become available, with priority based on length of service, before new employees can be hired.
- Qualified laid-off employees must respond to notices within five days.
- Prohibits employers from refusing to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee for seeking to enforce these rights.
- Directs the Division of Labor Standards Enforcement to enforce these provisions and authorizes a laid off employee to file a complaint with DLSE for violations and entitles them to hiring and reinstatement rights, front and back pay, as specified, and the value of benefits the employee would have received under the employer’s benefit plan.
- Subject employers guilty of a violation to specified civil penalties and employees will be entitled to damages of $500 per day of violation and will be awarded damages for each day of violation until cured.
- These recall rights are effective April 16, 2021 through December 31, 2024.
(Labor Code §2810.8)
- Under the Displaced Janitor Opportunity Act, regarding contracts to provide janitorial or building maintenance services, requires:
- A terminated contractor to provide to the successor contractor, the name, date of hire, and job classification of each employee employed at the terminated site(s) covered.
- A successor contractor or subcontractor to retain, for a 60-day transition employment period, employees of the terminated contractor and subcontractor, as specified.
- The successor to make a written offer of employment to each employee, as specified.
- If at any time the successor determines that fewer employees are needed, the successor contractor or subcontractor shall retain employees by seniority.
(Labor Code §1060-1065)
- Regarding grocery establishments, when a change in control (such as a sale or transfer) occurs, requires:
- An incumbent grocery employer to provide the successor grocery employer the name, address, date of hire, and occupation classification of each eligible grocery worker.
- The successor grocery employer to maintain a preferential hiring list of eligible workers identified and hire from that list for a period of 90 days, as specified.
- During this 90-day transition period, eligible workers to be employed under the terms and conditions established by the successor and pursuant to any relevant CBA, if any.
- If the successor employer determines that it requires fewer workers, the successor grocery employer shall retain eligible grocery workers by seniority, as specified.
- If the eligible worker’s performance during the 90-day transition employment period is satisfactory, the successor employer to consider offering continued employment.
(Labor Code §2500-2522)
- Regarding public transit service contracts and contracts for the collection and transportation of solid waste, requires:
- A bidder to declare as part of the bid whether or not they will retain employees of the prior contractor/subcontractor for a 90-day transition period if awarded the contract.
- An awarding authority to give a 10-percent bid preference to any bidder who agrees to retain the employees of the prior contractor, per the above.
- If, at any time, the successor contractor/subcontractor determines that fewer employees are required, the successor contractor/subcontractor must retain employees by seniority within the job classification, as specified.
(Labor Code §1070-1076)
- Establishes within the Department of Industrial Relations (DIR) and under the direction of the Labor Commissioner, the Division of Labor Standards Enforcement (DLSE) tasked with administering and enforcing labor code provisions concerning wages, hours and working conditions. (Labor Code §56)
This bill:
- Revises the provisions of the existing COVID-19 Recall Rights for hotels, private clubs, event centers, airport hospitality operations, airport service providers or other provision of building service to office, retail or commercial buildings to:
- Delete references to the COVID-19 state of emergency.
- Delete the December 31, 2024 sunset date on the provisions, thereby making these recall requirements permanent.
- Revise the definition of “laid-off employee” to mean any employee who was employed by the employer for 6 months or more and whose most recent separation from active employment by the employer occurred on or after March 4, 2020, and was a result of a public health directive, government shutdown order, lack of business, reduction in force, or other economic nondisciplinary reason.
COMMENTS
1. Background: Adoption of COVID-19 Recall Rights
The COVID-19 pandemic and the shutdown orders to mitigate the spread of the virus lead to a dramatic loss of jobs and an increase in unemployment beginning in March 2020. Millions of Californians were left unemployed and in critical need of assistance to replace some of the income on which they relied to pay for essentials such as housing and food. By April 2020, the unemployment rate had surpassed previous peaks observed during the Great Recession.
In August 2020, a bill (AB 3216 Kalra) was introduced to attempt to address what was happening on the ground to the workers in the hospitality industry. The bill required hospitality and airport employers to offer its laid-off employees specified information about job positions that become available for which the laid-off employees are qualified, and to offer positions to those laid-off employees based on a preference system, in accordance with specified timelines and procedures. The bill would also require an incumbent employer, within 15 days after the execution of a transfer document, to provide to the successor employer specified information pertaining to eligible employees and would require the successor employer to maintain and hire from a preferential hiring list for a specified time period. AB 3216 was vetoed by the Governor (veto message below under prior legislation).
In 2021, the Legislature approved and the Governor signed SB 93 (Chapter 16, Statutes of 2021) which provides recall/rehiring rights to employees working in the hospitality industry – including for hotels, event centers, and airport service and hospitality providers – who were laid-off due to a non-disciplinary reason related to the COVID-19 pandemic, including lack of business, a government shut-down order, or public health directive. The bill did not include the successor employer rehire requirements that AB 3216 included. These rehiring rights are set to end on December 31, 2024.
As an example of the impact the law has had for employees of one company, in July 2022, the California Labor Commissioner recovered and paid $1.52 million to 57 workers at Terranea Resort in Rancho Palos Verdes who were laid off during the COVID-19 pandemic. Some workers were not timely offered jobs, while others did not receive any job offers once the resort re-opened, as required by the Right to Recall law. Workers compensated for having their labor rights violated include banquet housepersons, banquet servers, banquet captains, banquet bartenders, and junior sous chefs. The $1.52 million payment came from a settlement reached with Terranea Resort after it was cited for $3.3 million in March 2022 for failing to comply with the law after the resort re-opened for business in 2021. In addition to issuance of the citation for liquidated damages payable to the employees and civil penalties payable to the State, a Notice to Discontinue Labor Violations was issued directing Terranea to offer positions to employees who should have been returned to work, but still have not had that opportunity.
2. Similar Efforts through Ordinances:
Several local ordinances have been adopted over the last couple of years to tackle the issue of worker recall and retention in response to the unemployment crisis created by the pandemic. Below is a sample of a couple of city ordinances adopted for these purposes.
City of Santa Monica
Adopted in December 2001, the City of Santa Monica appears to be the first city to adopt a right of recall ordinance. Adopted in response to an economic downturn that was worsened by the 9/11 terrorist attacks, the ordinance applies to employers doing business at a location in the Coastal Zone or Extended Downtown Core with gross receipts over five million dollars in the year 2000 for that location. The ordinance requires employers to offer in writing, to the last known address of laid off employees, all positions which are or become available for which the laid off employees are qualified, as specified. Where more than one employee is entitled to preference for a position, the employer is required to offer the position to the employee with the greatest length of service with the employer. A laid off employee offered a position has ten days in which to accept or decline the offer.
City and County of Los Angeles
On April 29, 2020, the City of Los Angeles adopted two ordinances to provide recall and retention protections to workers in certain industries deemed severely impacted by the COVID-19 pandemic and the stay-at-home orders in the state. The COVID-19 Right of Recall Ordinance #1866602 and the COVID-19 Worker Retention Ordinance #186603 became effective June 14, 2020, but cover workers laid off on or after March 4, 2020. The City of Los Angeles ordinances are aimed at airports, commercial properties employing janitorial, maintenance or security service workers, event centers and hotels.
Los Angeles County followed suit, and on May 12, 2020, adopted two similar ordinances for their jurisdiction. The ordinances provide legal protections for workers when the specified businesses change ownership or control. Los Angeles County’s ordinances (COVID-19 Right of Retention Ordinance #2020-0031 and COVID-19 Right of Recall Ordinance #2020-0030) establish protections for janitorial, maintenance, and security service workers on commercial properties, and hospitality workers in the unincorporated areas of Los Angeles County.
For both the city and county of LA ordinances, employees are allowed to bring a private right of action in state court for violations, however, employees must first give employers notice of the alleged violation and 15 days from receipt of the notice to cure the violations.
City of Long Beach
Following the efforts started in Los Angeles, the City of Long Beach adopted similar worker recall and retention ordinances on May 19, 2020. The COVID-19 Worker Retention Ordinance #20-0016 and the COVID-19 Worker Recall Ordinance #20-015 are both aimed at providing legal protections to workers and became effective June 22, 2020. Similar to the LA ordinances, the Long Beach ordinances cover specific industries including commercial property employers that provide janitorial services and hotel employers that employ at least 25 employees.
Similar to LA, in the City of Long Beach, an employee can bring a private right of action in state court for violations but again, must first provide employers with a notice of the alleged violation and 15 days to cure before proceeding to court.
3. Need for this bill?
According to the author, “At the start of the COVID-19 pandemic, low-income workers in the hospitality industry, primarily immigrants and women of color, were laid off and anxiously waited to see if they could get their jobs back. These workers had no source of income or security and after many decades on the job, many older workers feared that employers would only rehire younger, newer workers at lower pay rates.
Most of the job losses were among hotel housekeepers, mostly women of color over age 50. These women have the lowest statistical possibility of even being interviewed for a new job. Research has shown us that following economic recessions, women over 50 are affected the most in their experience of long-term unemployment. Jobless women are 18 percent less likely to find new work at age 50 to 61 than at age 25 to 34. At 62 or older, they are 50 percent less likely to be rehired, according to the Urban Institute.
Though the COVID-19 pandemic has abated somewhat, employers layoff workers for many non-disciplinary reasons including any slow-down in the tourism industry, economic downturns, another public health emergency, or even repairs. Mergers of companies may also result in temporary layoffs as the new owner assesses the business. In addition, the hospitality industry is particularly sensitive to economic downturns since business and leisure travel is often the first expense cut. If the existing rehiring rights expire in 2024, many of these hospitality workers will be left again with uncertainty if they are laid off through no fault of their own. Making these provisions permanent prepares the industry for any future disruptions and lays the foundation for a swift recovery.”
4. Proponent Arguments:
According to the sponsors, the California Labor Federation, “Nearly 40 percent of all California jobs lost during the pandemic were in the hospitality industry. Millions of workers – low-wage, immigrant, female – were left with no source of income or security. After years of working their way up at one employer, workers feared they would have to start again at the bottom rung, losing years of seniority, pay raises, and paid time off. Mass layoffs gave employers the opportunity to rehire newer, younger workers into jobs that older workers previously held.”
Proponents argue that, “Rehire rights also benefit employers and the economy. Evidence from past recessions shows that keeping workers connected to their jobs during downturns speeds economic recovery. This was the logic behind the federal Paycheck Protection Program that was intended to help businesses keep their workers on payroll until they could be recalled to work. Employers avoid the costly and time-intensive hiring and training process and can quickly return to full productivity. Workers avoid long-term unemployment and wage loss speeding recovery after economic shocks.
The right to rehire law sunsets December 31, 2024, leaving many workers without protection when they are laid off because of non-disciplinary reasons. Though the COVID-19 pandemic has abated somewhat, the hospitality industry remains vulnerable to future crises and economic fluctuations. The hospitality industry is particularly sensitive to economic downturns since business and leisure travel is often the first expense cut.”
5. Opponent Arguments:
A coalition of employer organizations, including the California Chamber of Commerce, argue that SB 723 undoes legislative compromise that became SB 93 (2021). They write, “In the beginning of the COVID-19 pandemic, AB 3216 (Kalra) (2020) proposed a right to recall for hospitality workers during any state of emergency. It was vetoed due to the burden it would have placed on struggling industries and its failure to narrowly tailor its provisions to COVID-19. As part of the budget process the following year, negotiations took place between the Legislature, administration, and business community regarding a narrower version of a right to recall. Although it still faced opposition as being unnecessary and overly burdensome, the result, SB 93, was more limited in time and scope and specifically tied to the unique circumstances presented by the COVID-19 pandemic. It had a sunset date of December 31, 2024. Now, even before that sunset date, SB 723 dismantles those negotiations by instituting a permanent right to recall for the hospitality workers covered under SB 93.”
Additionally, they argue, the bill “seeks to forever micromanage the rehire process for affected businesses. As demonstrated by the impacts of SB 93 and several similar local ordinances, SB 723’s provisions, or lack thereof, will only delay rehiring and increase costs on employers.” Specifically, they argue, among other things, that SB 723:
- Slows down the hiring process by forcing employers to repeatedly offer newly available positions to qualified employees, no matter how many times they have turned offers down, failed to respond, or explicitly declined previous work offers.
- Essentially eliminates the use of severance agreements, which benefit employees. No employer subject to such a retention right would have any reason to offer severance.
- Forces employers to hire based on seniority, not skill.
- Exposes employers to administrative costs as any good faith error results in penalties.
Furthermore, they argue that the bill is unnecessary as any of the businesses targeted are presently struggling to hire. They write, “Hotels estimate their vacancy rates at about 20%. It is common sense and smart business practice to rehire known, trained, and former employees who previously had to be laid off due to economics or a required shutdown. SB 723 simply adds to the difficulty of hiring and running a business, it does nothing to help these businesses.”
Additionally, they argue that unlike SB 93 or similar ordinances, “SB 723 is not the result of a unique obstacle such as the pandemic. Nor is it limited in time – it is a permanent statutory scheme that eliminates at-will employment and mandates hiring based on seniority alone. For this reason, SB 723 likely violates the Contracts Clauses of the United States and California constitution because it modifies existing at-will contracts.”
In conclusion, they argue that “the hospitality industry is still vulnerable to the impacts of COVID-19 and the vagaries of the economy. In addition to the significant loss of revenues over the last few years, that industry is also contending with the rising cost of goods, rising costs of rent and new construction, decrease in business travel upon which the industry depends, and worker shortages. SB 723 would put an unnecessary, undue burden on the industry at a time when it is fighting to return to where it was pre-pandemic.”
Additional opposition, from the California Hotel & Lodging Association, notes the complexities and time delays SB 93 has caused and writes, “while simultaneous offers can be submitted, the required five-day waiting period means that if one employee who has higher seniority does not respond (this happens often when the former employee has changed careers or moved), the hotel must wait the full five days before a lower-seniority employee who is eager to resume employment (some may be under time pressures to resume employment as quickly as possible) may be hired for the position. Again, on a singular basis, this may not seem to be a deleterious challenge to the employer, however, when a hotel is attempting to restart a range of operations and rehire employees for a multitude of positions which are reliant upon one another to operate the hotel, these delays add up to create timing difficulties, increase costs, and render it unnecessarily difficult to get people re-employed.”
6. Prior and Related Legislation:
SB 627 (Smallwood-Cuevas, 2023) would, among other things, require an employer, for one year after the closure of a covered establishment, to provide to all covered workers the opportunity to remain employed by the employer and to transfer to a location of the chain within 25 miles of the covered establishment subject to closure as positions become available. SB 627 applies to a business in California consisting of 100 or more chain establishments nationally that share a common brand and are owned and operated by the same parent company. SB 627 was previously heard and passed by this Committee and is pending before the Senate Judiciary Committee.
SB 725 (Smallwood-Cuevas, 2023) would require, among other things, a successor grocery employer to provide an eligible grocery employee severance pay equal to one week of pay for each full year of employment with the incumbent employer if the successor grocery employer does not hire an eligible grocery worker following a change in control or does not retain an eligible grocery worker for at least 90 days, as specified. SB 725 was previously heard and passed by this Committee and is pending on the Senate Floor.
AB 1356 (Haney, 2023) would, among other things, make changes to the California WARN Act provisions to increase the notice requirement from 60 to 90 days prior to a mass layoff and would revise the definition of “covered establishment.” Pending in Assembly Judiciary Committee.
SB 93 (Committee on Budget and Fiscal Review. Chapter 16, Statutes of 2021) was a trailer bill that made various statutory changes to implement rehiring rights for hospitality, airports, airport service providers and event center rehiring rights for workers who were laid off for reasons related to the COVID-19 pandemic with a December 31, 2024 sunset date.
SB 3216 (Kalra, 2020, Vetoed) would have required employers that operate a hotel, private club, event center, airport hospitality operation, airport service provider, janitorial service, building maintenance or security service to recall employees previously laid-off, as specified. The bill also would have required these successor employers to maintain a preferential hiring list of eligible employees identified by the incumbent employer and hire from that list for a period of six months after the change of control and to retain those employees for a 90-day transition employment period, and offer continued employment, as specified. In his veto message, Governor Newsom stated:
. . . . I recognize the real problem this bill is trying to fix-to ensure that workers who have been laid off due to the COVID19 pandemic have certainty about their rehiring and job security. But, as drafted, its prescriptive provisions would take effect during any state of emergency for all layoffs, including those that may be unrelated to such emergency. Tying the bill's provisions to a state of emergency will create a confusing patchwork of requirements in different counties at different times. The bill also risks the sharing of too much personal information of hired employees. There must be more reasonable tools to effectively enforce the recall provisions. Finally, the hospitality industry and its employees have been hit hard by the economic impacts of the pandemic. I believe the requirements of this bill place too onerous a burden on employers navigating these tough challenges, and I would encourage the legislature to consider other approaches to ensure workers are not left behind.
AB 1669 (Hernandez), Chapter 874, Statutes of 2016, extended an existing bid preference for public transit contractors who agree to retain employees to also include contracts for the collection and transportation of solid waste, as specified.
AB 359 (Gonzalez), Chapter 212, Statutes of 2015, established the 90-day worker retention requirements upon a change in control of a grocery establishments.
SUPPORT
California Labor Federation, AFL-CIO (Sponsor)
California Immigrant Policy Center
OPPOSITION
Brea Chamber of Commerce
California Attractions and Parks Association
California Business Properties Association
California Chamber of Commerce
California Hotel & Lodging Association
California Restaurant Association
California Retailers Association
California State Council of The Society for Human Resource Management (CALSHRM)
California Travel Association
Carlsbad Chamber of Commerce
Chino Valley Chamber of Commerce
Coalition of California Chambers – Orange County
Corona Chamber of Commerce
Danville Area Chamber of Commerce
Fontana Chamber of Commerce
Fresno Chamber of Commerce
Gilroy Chamber of Commerce
Glendora Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater High Desert Chamber of Commerce
Greater San Fernando Valley Chamber of Commerce
Hollywood Chamber of Commerce
LA Canada Flintridge Chamber of Commerce
National Federation of Independent Business
Oceanside Chamber of Commerce
Official Police Garage Association of Los Angeles
Orange County Business Council
Palos Verdes Peninsula Chamber of Commerce
Paso Robles Chamber of Commerce
Roseville Area Chamber of Commerce
San Juan Capistrano Chamber of Commerce
Santa Clarita Valley Chamber of Commerce
Santee Chamber of Commerce
Simi Valley Chamber of Commerce
South County Chambers of Commerce
Templeton Chamber of Commerce
Torrance Area Chamber of Commerce
Tulare Chamber of Commerce
Vacaville Chamber of Commerce
Vista Chamber of Commerce
Yorba Linda Chamber of Commerce
-- END --
Discussed in Hearing
2MIN
Senate Floor
2MIN
Assembly Floor
1MIN
Assembly Floor
23MIN
Assembly Standing Committee on Labor and Employment
4MIN
Senate Floor
18MIN
Senate Standing Committee on Labor, Public Employment and Retirement
Bill Author
Bill Co-Author(s):
