New Budget Trailer Bill Requires the Rehiring of Displaced Workers

On April 8, the Assembly Budget Committee amended Assembly Bill 84 into a new bill to require the rehiring of certain displaced workers. This bill would, until December 31, 2024, require an employer 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.

The bill would add and repeal Section 2810.8 to the Labor Code. As a budget trailer bill, it would take effect immediately upon being chaptered. The bill is expected to be heard and voted upon by April 15.

Section One of the bill would add Section 2810.8. It would define the terms “airport,” “airport hospitality operation,” “airport service provider,” “building service” (janitorial, maintenance or security), “employer” (any individual who in a particular week performs at least 2 hours of work for an employer), “employer” (any person 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), “enterprise” (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), “event center” (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), “hotel,” “laid-off employee,” “length of service,” “person,” and “private club.”

This bill would require an employer to offer, within five business days of establishing a position, 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.

The bill would specify that 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 employee’s most recent layoff with the employer. In such a case, the employer would have to offer positions to laid-off employees in an order of preference set forth above. If more than one employee is entitled to preference for a position, the employer would be required to offer the position to the laid-off employee with the greatest length of service based on the employee’s date of hire for the enterprise.

Thereafter, the laid-off employee who is offered a position must be given at least five business days, from the date of receipt, in which to accept or decline the offer. An employer may make simultaneous, conditional offers of employment to laid-off employees. An employer would be required to retain specified records for at least three years.

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 would be required 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. This new section of law would also apply in the following circumstances:

• 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.
• 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.
• The employer relocates the operations at which a laid-off employee was employed before the COVID-19 state of emergency to a different location.

An employer would be prohibited from refusing to employ, terminate, reduce in compensation, or otherwise take any adverse action against any laid-off employee 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.

The Labor Commissioner (the Division of Labor Standards Enforcement) would have exclusive jurisdiction to enforce this section and this law can only be enforced in the following manner:  A laid off employee may file a complaint with the DLSE for violations of this section and may be awarded specified relief including rehiring and front and back pay. No criminal penalties could be imposed for violation of this section.

In addition, any employer, agent of the employer, or other person who violates or causes to be violated the provisions of this section would be subject to a civil penalty of $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. These amounts would be paid to the employee as compensatory damages.

The Labor Commissioner would investigate an alleged violation and order appropriate temporary relief to mitigate the violation pending the completion of a full investigation or hearing. A court could issue preliminary and permanent injunctive relief to vindicate the rights of employees. The Labor Commissioner or court would have to award interest on all amounts due and unpaid.

The DLSE may promulgate and enforce rules and regulations, and issue determinations and interpretations, consistent with and necessary for the implementation of this new section. Nothing in this section would prohibit a local government agency from enacting ordinances that impose greater standards than, or establish additional enforcement provisions to, those prescribed by this section. An employee would still bring a common law cause of action for wrongful termination.

All of this section’s provisions can be waived in a valid collective bargaining agreement. In addition, the provisions of this section are severable in case any provision is determined to be invalid. Finally, this section would remain in effect through December 31, 2024.

Section Two of the bill would appropriate and make available $6 million through June 30, 2025 to the Labor Commissioner for staffing resources to implement and enforce the provisions related to the rehiring and retention of workers displaced due to the COVID-19 pandemic.

Section Three of the bill states that the bill provides for appropriations related to the Budget Bill and would take effect immediately.