Effective July 3, 2020, San Francisco’s Back-to-Work Emergency Ordinance (Emergency Ordinance) seeks to mitigate the economic harm for individuals who are unable to work due to the COVID-19 public health emergency by creating a temporary right to reemployment for certain employees laid off due to the coronavirus pandemic if their employer seeks to fill the same, or substantially similar, position previously held by a laid-off worker. The Emergency Ordinance also imposes written notice and record retention requirements on employers. The Emergency Ordinance expires on September 2, 2020 unless reenacted.
The Emergency Ordinance contains several key definitions that employers should refer to in order to determine whether any personnel action the employer is considering taking will be subject to the requirements therein. Of particular importance, the Emergency Ordinance defines Covered Layoff, Covered Employer and Eligible Employees as follows:
The Emergency Ordinance defines a covered layoff as:
- A separation of employment of 10 or more employees;
- During any 30-day period; and
- Caused by the employer’s lack of funds or lack of work for its employees, as a result of the public health emergency and any San Francisco Shelter in Place orders (SIP).
The Emergency Ordinance explicitly includes layoffs conducted in conjunction with the closure or cessation of an employer’s business operations in San Francisco in the definition of covered layoff, which means that if a business meets the above requirements, a cessation of business operations is not an exception to the requirements of the Emergency Ordinance.
The Emergency Ordinance defines “employer” as any person who directly or indirectly owns or operates a for-profit business or non-profit in San Francisco and employed or employs at least 100 employees on or after February 25, 2020.
The definition of “employer” expressly excludes federal, state, local, or other public agencies, and certain healthcare operations like hospitals, clinics, COVID-19 testing locations, dentists, pharmacies, blood banks and blood drives, pharmaceutical and biotechnology companies, healthcare suppliers, home healthcare service providers, mental health providers, or any related and/or ancillary healthcare services, as well as veterinary care and all healthcare service providers to animals.
The Emergency Ordinance defines “eligible employee” as a person:
- Employed by their employer for at least 90 days of the calendar year preceding the date on which their employer provided or provides written notice to the employee of a layoff; and
- Who was or is separated due to a layoff.
Employers that are covered by the Emergency Ordinance must now take a number of actions when they lay employees off.
Written notice to employees of covered layoff
The Emergency Ordinance requires that employers provide written notice of a covered layoff at or before the time of the covered layoff in a language understood by the eligible employee. If the layoff occurred before the effective date of the Emergency Ordinance, then employers must provide notice to those former employees within 30 days of the effective date of the Emergency Ordinance (August 2, 2020). The written notice must include:
- A notice of the covered layoff and the covered layoff’s effective date;
- A summary of the right to reemployment created by the Emergency Ordinance; and
- A telephone number for a hotline, to be operated by the Office of Economic and Workforce Development (OEWD), which eligible employees may call to receive information regarding the right to reemployment created by this Emergency Ordinance, as well as navigation services and other City resources related to unemployment.
Written notice to the OEWD regarding covered layoffs
In addition to providing written notice to laid off employees, employers are also required to provide written notice to San Francisco’s OEWD within 30 days of a covered layoff. If the covered layoff is not foreseeable, however, the employer must provide written notice within seven days of the separation of the tenth employee in a 30-day period due to the coronavirus or any SIP. The written notice to the City must include:
- The total number of employees located in San Francisco affected by the covered layoff;
- The job classification at the time of separation for each eligible employee;
- The original hire date for each eligible employee; and
- The date of separation from employment of each eligible employee.
Records retention requirement
When initiating a covered layoff, employers must retain the following records for at least two years for each eligible employee:
- Legal name;
- Job classification at the time of separation from employment;
- The date of hire;
- The last known address of residence;
- Last known email address;
- Last known telephone number; and
- A copy of the written notice regarding the covered layoff provided to the employee.
Employers who have previously completed covered layoffs and are seeking to re-hire employees are also subject to the following new requirements.
Reemployment offer requirement
If an employer has initiated a covered layoff and subsequently seeks to hire for the same position as one previously held by an eligible employee, the employer must first offer the position to the eligible employee before offering the position to someone else. If the employer has initiated a covered layoff and subsequently seeks to hire for a position that is substantially similar (comparable pay, job duties, benefits, and working conditions) to one previously held by an eligible employee, and the position is located in San Francisco, the employer must also first offer the substantially similar position to the eligible employee before offering the position to another person.
In the event an employer wants to fill a position previously held, or is substantially similar to a position previously held, by more than one eligible employee, the employer must make offers of reemployment in order of seniority based on date of hire.
Exceptions to employer’s reemployment obligation
Employers are not required to make an offer of reemployment under the following circumstances:
- After acquired evidence of employee misconduct – employers do not have to make a reemployment offer if they learn that the eligible employee engaged in any act of dishonesty, violation of law, violation of policy or rule of the employer, or other misconduct during their employment.
- Severance agreement – employers may withhold an offer of reemployment if:
- The separation from employment occurred as part of a covered layoff between February 25, 2020 (the beginning of the public health emergency) and July 3, 2020 (effective date of the Emergency Ordinance); and
- The employer and eligible employee executed a severance agreement containing a general release of claims against the employer before July 3, 2020.
- Another employee was already hired to fill the position – employers do not have to make an offer of reemployment if:
- The separation from employment occurred as part of a covered layoff between February 25, 2020 and July 3, 2020; and
- The employer already hired another person other than the eligible employee for the position, or a substantially similar position, prior to July 3, 2020.
- Collective bargaining agreements – the Emergency Ordinance does not apply to eligible employees covered by collective bargaining agreements that contain express waivers of the requirements of the Emergency Ordinance.
Offer of reemployment
Employers are required to engage in good faith efforts to notify eligible employees of reemployment offers by telephone or email. If the employer is unable to do so, then the employer must attempt to contact the eligible employee by certified mail or courier delivery.
Delivery of reemployment offer following initial contact by telephone and email
If an employer is able to reach an eligible employee by telephone and/or email, it must inform the eligible employee that the employer:
- Wishes to extend an offer of reemployment;
- Seeks the eligible employee’s consent to transmit a written offer of reemployment by email; and
- If the eligible employee consents, the eligible employee must provide written confirmation of their consent by text or email no later than 5:00 PM PST by the next business day.
If the eligible employee agrees to accept the offer of reemployment by email, the employer must transmit the offer no later than 5:00 PM PST the next business day after the employee gives their consent. If the eligible employee does not timely consent to receiving the offer by email, the employer must send the written offer of reemployment to the eligible employee’s last known address of residence by certified mail or courier delivery. The offer must remain open for at least two business days following delivery by certified mail or courier.
Delivery of reemployment offer following initial contact by mail or courier
If an employer cannot obtain an eligible employee’s consent to receive an offer of reemployment by email, the employer must transmit the offer to the eligible employee’s last known address of residence by certified mail or courier delivery. The offer must remain open for at least two business days following delivery by certified mail or courier. Under such circumstances, the courier is authorized to deliver the offer to the address of residence without obtaining proof of receipt by the eligible employee.
Acceptance of reemployment
An eligible employee must provide a written acceptance of an offer of reemployment by reasonable means identified by the employer including, but not limited to, returning a signed version of an offer letter by any reasonable method of delivery or, if authorized by an employer, by applying an electronic signature and transmitting acceptance of the offer to an employer by email or other reasonable electronic method. If the eligible employee notifies the employer by other means, such as by telephone or text message, of their acceptance of the offer, the employer must allow the eligible employee two business days from that date to respond in the written reasonable means identified by the employer. This timeframe may be extended by mutual agreement of the employer and eligible employee.
If the eligible employee does not timely respond to an offer of reemployment, then the eligible employee will be deemed to have rejected the offer of reemployment, and the employer is free to offer the position to the next most senior eligible employee, or, if there are no alternative eligible employees, then to offer the position to alternative job candidate.
Employer duty to accommodate eligible employees
The employer must accommodate any employees experiencing a family care hardship that impacts the employee’s ability to perform or satisfy a job requirement. Accommodations include, but are not limited to, modifying work schedules, the number of hours to be worked, or permitting telework. This duty to accommodate expires upon the expiration of the Emergency Ordinance.
Written notice to the OEWD regarding offers and acceptances
Employers must notify the OEWD in writing of all offers of reemployment, along with any acceptances and rejections of such offers by eligible employees.
Potential liability for violations
The Emergency Ordinance imposes several new obligations on employers and it can be costly for employers if they get it wrong. Eligible employees may bring suit for employer violations of the Emergency Ordinance and be awarded:
- Rehire and reinstatement rights;
- Back pay for each day of the violation and front pay for each day during which the violation will continue;
- The value of the benefits the eligible employees would have received under the employer’s benefit plan had the violation not occurred; or
- Attorneys’ fees and costs.
Employers should contact their Reed Smith Labor and Employment attorney for further guidance to ensure compliance.