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West Coast Worry? California’s Right to Recall Law Could Bring Stiff Compliance Penalties

September 1, 2022 - minute read

By Julie Kramer

When it comes to enforcing its labor laws, California means business. Just ask the resort in Los Angeles County that paid $1.5 million in restitution for violating California’s Right to Recall law, a short-term law that protects the job rights of workers laid off during the COVID-19 pandemic.  

Those funds were distributed to 57 workers who were not offered their jobs back by the resort when it reopened after a three-month COVID-19 shutdown. And if you think $1.5 million sounds high, the original penalty set by the California Labor Commission was a cool $3.3 million.  

The resort is the first employer to be charged under California’s Right to Recall law, which became effective on April 16, 2021. But it probably won’t be the last. This is why, barring an extension, employers doing business in California need to ensure they’re compliant at least until the law sunsets on Dec. 31, 2024.

Giving Laid-off Workers First Crack at Jobs  

Under California’s Right to Recall law, businesses staffing back up post-COVID must first offer jobs to their laid-off workers before recruiting elsewhere. The law applies to employers in specific industries that were hard-hit by COVID-19, including:

  • Building service contractors providing janitorial, maintenance and/or security services. 
  • Hotels and private clubs with 50 or more guest rooms/suites.
  • Event centers of more than 50,000 square feet or 1,000 seats. 
  • Airport hospitality operations, including food service companies, retail stores and restaurants operating in airports. 
  • Airport service providers handling security, ticketing and check-in functions.

Subject employers must offer protected former workers (i.e., those who worked for two or more hours per week for at least six months) every open position that they’re qualified for—not just their old jobs, but similar positions. 

The Right Way to make—and Track—Job Offers

The law is quite specific regarding how it should be followed. Employers must make job offers in writing, and communications must be sent to all qualified former workers within five days of creating an opening.  

If more than one worker responds, the one with the longest term of service gets seniority. Workers have five business days to accept or decline offers. If they turn one down, the employer must continue to offer them subsequent jobs.  

In other words, employers must have a foolproof process in place. They must also keep all documentation for three years. 

The High Cost of Noncompliance

The California Labor Commission encourages workers who believe their rights have been violated to lodge a complaint with its Division of Labor Standards Enforcement (DLSE). 

If found to be noncompliant, employers may face penalties that include: 

  • Enforced reinstatement of laid-off workers  
  • Payment of back pay and benefits 
  • A $100 fine for every worker whose rights were violated 
  • A $500 per-employee-per-day penalty for each day rights were violated 

In addition, workers who experience retaliation for asserting their rights may receive additional benefits.

An Employer’s Hard-Learned Lesson

The California-based resort ran into trouble when, after reopening in summer of 2020, it failed to make job offers to former house cleaners, banquet servers, bartenders, chefs and massage therapists—more than a dozen of which filed the complaint. 

The resulting investigation included worker interviews, depositions from the employer’s HR managers and a payroll audit—a scenario that employers would prefer to avoid.   

“The Right to Recall law protects workers who lost their jobs because of the COVID-19 pandemic by requiring service industry businesses such as hotels to offer workers their jobs back,” said California Labor Commissioner Lilia García-Brower in a written statement. 

It should be noted that Connecticut and Nevada, along with about a dozen cities, also passed short-term right to recall laws albeit more limited in scope. Both Connecticut’s law and Nevada’s law have already sunset.

Stay Out of Trouble by Staying Compliant

If you operate in California, you know all too well that this is just one of many highly specific labor laws you must observe. And, yet, in the vast California compliance universe, it’s only the tip of the iceberg. Staying abreast of federal, state and local mandates is a full-time job—one that most busy HR professionals simply don’t have the bandwidth to handle on their own. 

Rather than risk noncompliance, a growing number of employers are leveraging the skills of compliance experts to help them stay ahead of ever-shifting labor laws. 

And it’s not just about the fines and legal fees, although they can be stiff. Regardless of where you operate, noncompliance can translate into a tarnished brand, a loss of community goodwill and an alienated workforce. 

When it comes to compliance, no law—even a temporary one—is too trivial to be ignored. To keep your business healthy and growing, get compliance right

Filed Under: Compliance Human Capital Management Business Service Contractors