← Back to the Blog

SB 93 Undoes COVID Layoffs. Or Does It?

Unlike many of the new COVID-related laws in California that add to or modify the existing labor code, Senate Bill (SB) 93  is a new creation surrounding COVID-related layoffs. So what does it say?

The new law requires certain employers to formally offer employment to employees, in writing, who suffered layoffs due to the COVID-19 pandemic. Such employees have five days to accept or decline, and if more than one employee responds, the job will go to the senior employee. SB 93 also stipulates that employers must keep such records of these offers for three years. According to The National Law Review, “the California Division of Labor Standards Enforcement (DLSE) will enforce the new law and may order reinstatement, front and back pay, and benefits, as well as impose substantial penalties and liquidated damages. SB 93 takes effect immediately and expires on December 31, 2024.”

Impacted Employers

SB 93 does not apply to all employers; in fact, it is primarily directed toward layoffs in service and hospitality industry organizations. The NLR provided a full list of such employers:

Hotels with 50 or more guest rooms.

Private clubs that operate “a building or complex of buildings containing at least 50 guest rooms” that they offer to members for overnight lodging.

Publicly or privately owned event centers “of more than 50,000 square feet or 1,000 seats that [are] used for … public performances, sporting events, business meetings, or similar events.” Event centers include “concert halls, stadiums, sports arenas, racetracks, coliseums, and convention centers.” For purposes of this statute, event centers also include “any contracted, leased, or sublet premises connected to or operated in conjunction with the event center’s purpose, including food preparation facilities, concessions, retail stores, restaurants, bars, and structured parking facilities.”

Airport hospitality operations that provide services “in connection with the preparation of food or beverage[s] for aircraft crew or passengers at an airport.” Airport hospitality operations also includes businesses that provide “food and beverage[s], retail, or other consumer goods or services to the public at an airport.” Airport hospitality operation “does not include an air carrier certificated by the Federal Aviation Administration [FAA].”

Airport service providers that provide services “directly related to the air transportation of persons, property, or mail.” These providers include businesses related to “security, airport ticketing and check-in functions, ground-handling of aircraft, aircraft cleaning and sanitization functions, and waste removal.” Air carriers certified by the FAA are not included in the definition of ‘airport service provider.’”

Employers that provide “janitorial, building maintenance, or security services” to office, retail, or other commercial buildings.

National Law Review

Covered Employees

There are also limits on the employees covered by SB 93 protection. They must have:

• worked at least two hours per week for a covered employer (see above);
• been employed by a covered employer for “6 months or more in the 12 months preceding January 1, 2020”; and
• been “separat[ed] from active service … 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.” (via NLR)

What Do You Have to Do?

If you are a covered employer and you create a position, you must first offer the position—in writing—to laid-off employees within five business days of creating it. You must also deliver the offer “either by hand or to their last known physical address, and by email and text message,” if possible.

If you are a laid-off employee, first of all, you are not guaranteed the right to the new position—you must be qualified for the position offered. SB 93 says you are qualified if you “held the same or similar position… at the time of the [your] most recent layoff with the employer.” (It is useful, for both employers and employees, to have access to the job description for the terminated position, so both parties can evaluate if the positions are the same or similar.)

Exact language in SB 93 states that “[a]n employer may make simultaneous, conditional offers of employment to laid-off employees.” Laid-off employees have “five business days, from the date of receipt, in which to accept or decline the offer.” In the event that more than one qualified laid-off employee accepts the position, then seniority comes into play and the employer must base the rehire on “greatest length of service based on the employee’s [previous] date of hire.” If you are an employer, you may have the option not to recall a laid-off employee based on a lack of qualifications, but you must 1) provide the laid-off employee a written notice within 30 days, and 2) include a list of all employees hired for the position, including their length of employment at your organization. You must also explain, in writing, why you did not rehire the employee.

We Keep Saying It: Document!

Employers are now required to maintain records relating to the new Labor Code Section 2810.8 for three years, “measured from the date of the written notice regarding the layoff, for each laid-off employee.” According to SB 93, these records must include the employee’s:

• full legal name;
• job classification at time of layoff;
• date of hire;
• last known residential address;
• last known email address; and
• last known telephone number.

Employer records must also include any layoff notices and “all records of communications between the employer and the employee” regarding employment offers made under SB 93’s requirements.

Enforcement and Penalties

What happens if you decide not to rehire a laid-off employee when you create a new position? Most of the answers are not good, if you don’t have compelling documentation that that employee is unqualified. In other words, do not simply re-post the same job with the same duties without first offering it to the employee you laid off. If you do that, the employee may file a complaint with the DLSE, which may award them:

• Hiring and reinstatement rights
• Front or back pay
• Value of the benefits the employee “would have received under the employer’s benefit plan”
• “Interest on all amounts due and unpaid”

You could also be on the hook for civil penalties of $100 for each former employee you laid off and didn’t fairly re-offer a position to. The DLSE also may choose to impose damages of $500 per day for each individual whose rights the employer violated “until such time as the violation is cured.” (What you pay in penalties and damages to the state then gets paid by the state to the employees.)

Be Compliant. Please.

SB 93 is immediately in effect, and we hope you agree it’s not to be taken lightly. You can start creating a compliance checklist now:

• Make a list of all laid-off and furloughed employees by job classification. Include hiring dates to establish seniority.
• Inform hiring managers of the new law.
• Establish a rehire process that ensures positions are offered to laid-off and furloughed employees before those positions are offered to others.
• Prepare a conditional offer form template that makes it clear that offers are conditional and seniority-based.
• Prepare a form template informing employees that the employer has selected another individual for the position. Be sure to include which qualifications the former employee no longer meets for the new position.

As California begins to reopen businesses, we strongly recommend that employers do everything they can to re-hire qualified personnel that they had to lay off because of the pandemic. If a position evolved to demand higher qualifications, you must document that change in clearly in the job description.

While SB 93 does not apply to the majority of California organizations, it is nonetheless a good reminder of some best HR practices: Document your hiring and separation details meticulously, and stay aware of labor law changes—because they can (and often do) come into existence quickly.

Don’t hesitate to reach out to us if you have questions—Allevity is here to help!

---

---