Complying with California’s New Preferential Rehiring Law

May 7, 2021 - minute read

Traditionally, when employers rehire laid-off workers, they can choose who to bring back and in what order (with the possible exception of some union workers). However, the state of California recently passed SB 93, a new law that requires some employers to follow specific “preferential rehiring” practices.

The law targets those industries and workers hit hardest by the pandemic, with the objective of giving those laid-off workers first crack at their old jobs. As businesses begin the process of restaffing, it’s critical to observe this so-called “right-to-recall” law—and to document your compliance—or risk facing stiff penalties.

Even if you don’t operate in California, it’s wise to become familiar with how such right-to-recall laws work, because similar laws have also been passed outside of the Golden State—and that’s typically a good indication that we will see more popping up.

Who’s Subject to SB 93?

SB 93, which was signed into law on April 16, 2021, applies to the following employers:

  • Hotels (containing 50 or more guest rooms) and connected operations (such as restaurants leasing space in hotels)
  • Private clubs with 50 or more guest rooms
  • Event centers larger than 50,000 square feet and connected operations (concession stands, stores, restaurants, etc.)
  • Airport hospitality operations (food service, retail shops, etc.) and service providers (facility management, security, ticketing, cleaning, etc.)
  • Building services providers serving offices, retail, and commercial spaces

How CA’s Preferential Rehiring Law Works

Under SB 93, employers creating new positions must notify qualified, laid-off employees of the opportunities within five business days and give laid-off workers at least five business days to accept or decline the offer. If more than one worker applies, the position must be offered to the worker with the greatest length of service.

Laid-off employees are defined as those who:

  • Were employed by a given business for six months or more in the 12 months preceding January 1, 2020, and
  • Were laid-off due to a reason related to the pandemic, such as a government shutdown or lack of business.

If an employer declines to recall laid-off employees due to their qualifications, it must provide those workers with written notice within 30 days, including the reasons for the decision and the length of service of the person who was hired instead.

Furthermore, employers must retain records of laid-off workers for at least three years from the date that workers received written notification of their layoff. In addition to basic contact and employment information, those records must include all communications between the employer and employees in the interim.

The Penalty for Noncompliance

If an employee files a complaint that an employer has refused to follow SB 93, or took adverse action against them for asserting their rehiring rights, California’s Division of Labor Standards Enforcement (DLSE) can require that the employer to reinstate the worker and provide front and back pay, plus compensation for lost benefits.

In addition, the DLSE can fine employers $100, plus liquidated damages of $500 per employee per day. Liability can be extended to corporate officers and executives—yet another reason compliance is so important.

California has indicated that it means business, appropriating $6,000,000 in funding to implement and enforce this law.

Right-to-Recall Laws Beyond California

Before California passed its statewide law, at least six of its major cities, including Los Angeles and San Francisco, had passed their own right-to-recall laws.

In addition, a handful of large east coast cities have passed similar legislation, including Baltimore, New York City and Philadelphia—although, these laws are more narrowly focused on the hotel and hospitality industries.

Will more legislation follow? Possibly. For one thing, it’s not uncommon for New York City labor legislation to be taken up by New York’s state legislature. For another, when it comes to employment law, California is often the first but rarely the last to pass legislation.

Using Your ATS to Maintain Compliance

When it comes to complying with preferential rehiring laws, your HR software—specifically, your applicant tracking software—should be an instrumental tool. For example, EPAY’s applicant tracking system makes it easy to:

  • Identify and then contact former employees with job opportunities.
  • Update your online application, so you can quickly identify qualifying workers.
  • Rapidly sort applicants who qualify for preferential rehiring, ensuring they receive priority attention.
  • Rank qualifying applicants in terms of seniority.

Furthermore, it makes it easy to maintain complete employment records, in the event you need to provide documentation verifying your compliance.

As businesses continue to recover from the pandemic—and as the new administration continues to enact new legislation—we know employment law will continue to evolve, presenting new challenges for employers. Because EPAY’s HR software was designed for employers with an hourly workforce, we offer labor compliance safeguards and solutions you won’t find elsewhere. See how we stack up to your current HCM software.

Filed Under: Compliance California