On April 29, 2020, the City of Los Angeles adopted two ordinances to provide legal protections to workers during the economic upheaval resulting from the COVID-19 pandemic. Los Angeles County followed suit, and, on May 12, 2020, adopted their own two ordinances. These ordinances provide legal protections to certain workers when businesses change ownership or control and establish a right of recall for certain workers who are laid off as a result of COVID-19. The city and county ordinances differ in several areas, including when they go into effect.
The City of Los Angeles’ COVID-19 Worker Retention Ordinance and COVID-19 Right of Recall Ordinance are aimed at airports, commercial properties employing janitorial, maintenance or security service workers, event centers and hotels, and are effective on June 14, 2020.
Los Angeles County’s COVID-19 Right of Retention Ordinance and COVID-19 Right of Recall Ordinance establishes legal protections for janitorial, maintenance, and security service workers on commercial properties, and hospitality workers in the unincorporated areas of Los Angeles County, and are effective May 12, 2020.
Covered Employers (Los Angeles City)
Both Los Angeles City ordinances apply to the following types of businesses (as defined by ordinance):
- Airport Business/Airport Employer;
- Commercial Property Business/Commercial Property Employer;
- Event Center Business/Event Center Employer; and
- Hotel Business/Hotel Employer.
For the Right of Recall Ordinance, an “employer” does not include non-profit institutions of higher learning that operate medical centers in the City of Los Angeles.
Covered Employers (Los Angeles County)
Both Los Angeles County ordinances cover the following employers (as defined by ordinance):
- Commercial Property Employer; and
- Hotel Employer
Non-profit entities are excluded as covered employers, and federal, state, and local government agencies are exempt from the ordinances; however, private contractors of an employer are not exempt.
For both Los Angeles City and County, a hotel employer is defined as having 50 or more guestrooms, or having earned gross receipts in 2019 exceeding $5 million. Any restaurant physically located on hotel premises is also included.
Worker Retention/Right of Retention Ordinances
In the Worker Retention Ordinance (City) and Right of Retention Ordinance (County), an “incumbent business employer” may sell or otherwise transfer its business to a “successor business employer,” effectuating what is referred to as a “change in control.” Upon a “change in control”, incumbent business employers must post a notice and provide a preferential hiring list of workers.
A “worker” under both ordinances is an individual employed by an incumbent business employer (the person who owns, controls or operates a covered business prior to the change in control):
- Who has a length of service with the incumbent business employer for six months or more;
- Whose primary place of employment is a business subject to the change in control;
- Who is employed or contracted to perform work functions directly by the incumbent business employer, or by a person who has contracted with the incumbent business employer to provide services at the business subject to the change in control; and
- Who worked for the incumbent business employer on or after March 4, 2020, and prior to the execution of the transfer document (purchase agreement or other documents creating a binding arrangement to effect the change in control).
A worker does not include a managerial, supervisory or confidential employee. Unlike the city ordinance, the county ordinance excludes employees hired through a temporary staffing agency.
The incumbent business employer must post a written “change in control” notice at the location of the affected business within five business days following the execution of the transfer document. The notice must remain posted during any closure of the business and for six months after the business is open to the public under the successor business employer. The notice must be posted in a conspicuous place at the business, visible to workers, other employees and applicants for employment, and must include (but is not limited to):
- The name of the incumbent business employer and its contact information;
- The name of the successor business employer and its contact information; and
- The effective date of the change in control.
In addition to the notice requirement, an incumbent business employer must provide a preferential hiring list of workers, including the name, address, date of hire and occupation classification of each worker to the successor business employer, within 15 days after execution of the transfer document.
The successor business employer must then maintain the preferential hiring list of workers, and is required to hire from that list, beginning on the date of the execution of the transfer document, and continuing for six months after the business is open to the public. If the successor business employer extends an offer of employment to a worker, they must keep written verification of that offer (including the name, address, date of hire and occupation classification of each worker) for at least three years from the date the offer was made.
A successor business employer has additional obligations once a worker is hired, including but not limited to, retaining each worker for at least 90 days, unless there is cause for the termination.
Right of Recall Ordinances
Under both the Los Angeles City and County Right of Recall Ordinances, priorities must be given to laid-off workers, who have five business days to accept or deny an offer of employment.
A “laid-off worker” means any person who:
- Performs at least two hours of work within the geographic boundaries of the city for a covered employer in a particular week;
- Has worked for a covered employer for six months or more, including periods of time when the worker was on leave or vacation; and
- Was separated on or after March 4, 2020, as a result of a lack of business, a reduction in force or other economic, non-disciplinary reason. (The ordinance creates a rebuttable presumption that any termination occurring on or after March 4, 2020, was due to a non-disciplinary reason.)
For the city ordinance, a laid-off worker doesn’t include a manager, supervisor, confidential employee or a person who performs as their primary job responsibility sponsorship sales for an Event Center Employer. The county doesn’t have a similar carveout.
A covered employer must make an written offer to a laid-off worker, sent to the worker’s last known mailing address, email address and phone number (text message), of any position for which the laid-off worker is qualified, which is or becomes available after each ordinance’s effective date. A laid-off worker is qualified and must be offered the position in the order of priority below — if the laid-off worker:
- Held the same or similar position at the same site of employment at the time of the laid-off worker’s most recent separation from active service with the employer; or
- Is or can be qualified for the position with the same training that would be provided to a new worker hired into that position.
If more than one laid-off worker is entitled to preference for a position, the offer must go to the laid-off worker with the greatest length of service in the position, and then to the laid off-worker with the greatest length of service at the employment site..
Collective Bargaining Agreements
Both city ordinances allow exemptions for collective bargaining agreements that are in place as of June 14, 2020, when the ordinance takes effect — as long as they contain a worker retention or right of recall provision.
The county’s ordinances also allow ordinance provisions to be expressly waived by a collective bargaining agreement, but only if the waiver is explicitly set forth in the agreement in clear and unambiguous terms.
Retaliation Prohibited
Under all four ordinances, employers cannot terminate, reduce pay or otherwise discriminate against any worker for exercising their rights under the ordinances, or opposing any practice prohibited by the ordinances.
Enforcement
All ordinances allow an employee to bring a private right of action in state court for violations. However, employers must first be given notice of the alleged violation and 15 days from receipt of the notice to cure such violations. Potential relief may include without limitation: hiring and reinstatement rights, lost pay and benefits, statutory damages, reasonable attorneys’ fees and costs.
For the city’s ordinances, the Office of Wage Standards of the Bureau of Contract Administration have been charged with creating rules and regulations to provide further clarification and guidance, and they will be posted on WagesLA.lacity.org.
Right now, these ordinances don’t have an official end date. All four ordinances have provisions requiring the Chief Legislative Analyst (City) and the Chief Executive Office (County) to report to the City Council and Board of Supervisors, respectively, on the ordinances’ effectiveness in protecting workers’ employment stability, and whether the ordinances are still necessary based on the localities’ recovery from the COVID-19 pandemic.
Bianca Saad, Employment Law Subject Matter Expert, CalChamber
Visit the CalChamber Coronavirus (COVID-19) webpage for more COVID-19-related federal, state and local resources, including California Counties Health and Stay-at-Home Order pages.
Access additional COVID-19-related HRWatchdog blogs.
