Hospitality and Service Industries Should Be On Alert For Extended COVID-19 Re-Hire Rights

Topics: COVID-19, Employee Hiring, Discipline & Termination, New Laws & Legislation

Employees in certain covered hospitality and service sectors, who were laid-off for reasons related to the COVID-19 pandemic, were granted another year of extended re-hire rights through December 31, 2025 under Senate Bill 723.

In April 2021, SB 93 required employers in the hospitality and service industries (including hotels, private clubs, event centers, airport hospitality and services, and building services to office, retail and other commercial buildings) to offer employees, who had worked for the employer prior to January 1, 2020 and were laid-off as a result of the COVID-19 pandemic, positions when rehiring in accordance with specified guidelines. Failure to offer a qualified employee an open position, may have required the employer to justify, for example, that the employee was not laid-off due to the COVID-19 pandemic. SB 93 was set to sunset at the end of next year, on December 31, 2024.

SB 723 extends the sunset from December 31, 2024 to December 31, 2025, and establishes two additional key elements affecting employers by (1) redefining “laid-off employee” as (a) one who worked for the employer for a period of at least six months and (b) who was most recently separated on or after March 4, 2020, and (2) creating the presumption that all employees separated “due to lack of business, reduction in force, or other economic, nondisciplinary reason” were laid-off as a result of the COVID-19 pandemic. The new law creates a presumption that any employees who fit into that category must be rehired. If not, and litigation ensures hospitality and service employers will be required to prove, by a preponderance of the evidence, that such an employee was originally terminated for some other cause. Hence, when considering re-hire decisions, these employers must carefully review terminated employees’ files to ensure that any decision not to rehire an employee in this sector is well supported by the employee’s previous record.

Accordingly, employers must be very careful when looking to re-hire for positions following lay-offs or separations that occurred after March 3, 2020, and should contact their favorite CDF attorney for guidance.