The Return to Work: What Employers Need to Know About California’s “Right to Recall” Law

In response to the COVID-19 pandemic, California passed the “Right to Recall” law, which requires employers in the building services and hospitality industries to offer laid-off employees an opportunity to be rehired before hiring a new employee to fill the position.  Now that most businesses and companies are ramping back up and returning to work, employers covered by the Right to Recall law must ensure compliance with California’s recall requirements or face steep penalties. 

Who is Covered?

The Right to Recall law is limited in application as to which employers and employees are covered. 

The law applies to employers at hotels and private clubs with 50 or more guest rooms, public and private event centers, and airport hospitality operations and service providers.  Event centers include a structure used for the purpose of public performances, sporting events, or similar events, such as concert halls, stadiums, sports arenas, and convention centers, provided they are more than 50,000 square feet in size or have more than 1,000 seats.  The law also applies to janitorial, building maintenance, and security services for office, retail, or other commercial buildings.  In addition, businesses that meet these requirements and have changed ownership or structure must also comply with the law.  Any employer of a covered enterprise must comply with the recall provisions regardless of the number of its employees.

Qualified laid-off employees include those who were employed for six months or longer during the twelve months before January 1, 2020, worked at least two hours per week, and most recently separated from employment because of any economic, non-disciplinary reason related to the COVID-19 pandemic, including lack of business, a government shut-down order, or public health directive.  A covered employee is deemed qualified if the individual held the same or similar position at the time of the lay-off.  However, employees that have been terminated for cause, including the failure to comply with company policy requiring COVID-19 vaccination, do not qualify and are not covered under the Right to Recall law.

What is Required?

Within five days of a job opening, an employer must provide a written offer of the available position to laid-off employees who held the same or similar position before the lay-off.  The employer can make a single offer to the employee with the most seniority or multiple contingent offers to a group of eligible employees.  If multiple laid-off employees accept the same offer, the position must be given to the employee with the most seniority based on their hire date.  An employee is allowed five business days to accept an offer if the employee wants to be re-hired. If no laid-off employees accept the job offer, the employer may hire anyone else including a new employee to fill the position.  However, an employer must continue to offer positions to all qualified laid-off employees, even if the employee has previously declined an offer to be re-hired for a prior position. 

Employers must also keep records for at least three years from the date of a lay-off notice, including the laid-off employee’s full name, job classification, date of hire, last known address of residence, email address, telephone number, a copy of the lay-off notice, and copies of all communication between the employer and employee concerning employment offers made under the Right to Recall law.

Penalties for Noncompliance

Penalties for noncompliance are steep and include potential reinstatement of the laid-off employee and compensation for front pay, back pay, and lost benefits.  In addition, an employer may be fined $100 for every employee whose rights were violated and fined another $500 per employee per-day penalty for each day of the violation until the violation is cured.  The state enforcement agency, the California Division of Labor Standards Enforcement (“DLSE”), has already conducted investigations for non-compliance with the Right to Recall and issued hefty penalties to employers.  The DLSE reported recently that it fined the Terranea Resort in Rancho Palos Verdes, California nearly $3.3 million based on the DLSE’s finding that it failed to rehire workers laid off during the COVID-19 pandemic before hiring new employees to fill positions.

Takeaways for California Employers

This law is in effect until December 31, 2024, so employers must develop a process for employee recall that includes compliance with California’s Right to Recall law.  In addition, some cities, including Los Angeles, Long Beach, San Francisco, and Oakland, have previously adopted recall ordinances that require additional steps by employers during the recall process.  Employers should evaluate whether they are also subject to local ordinances that may affect their re-hiring of laid-off employees.

If you have questions about your return-to-work business plans, contact the authors or your usual trusted counsel at AALRR.

This AALRR post is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process. 

© 2022 Atkinson, Andelson, Loya, Ruud & Romo

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