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- California hotels and airports must prioritize former staff laid off due to the pandemic when they are hiring.
- Gov. Newsom signed the bill Friday, which included fines for companies who don't follow the rules.
- Unions say this could help more than 700,000 workers – in particular women and people of color.
- See more stories on Insider's business page.
Hospitality workers in California who lost their jobs during the pandemic will get priority for new roles with their former employers, per a statewide bill Gov. Gavin Newsom signed Friday.
The bill requires employers in the hospitality and business-services industries, including hotels, airports, and large event centers, to give qualified former employees priority jobs access through 2024.
Any companies breaking the rules could face a $100 fine and be forced to pay an eligible former employee $500 a day.
Unite Here Local 11, which sponsored the bill and introduced similar legislation in Los Angeles and Long Beach in May, said the statewide policy could help more than 700,000 workers.
The Service Employees International Union California told The LA Times that women and people of color would especially benefit because they are overrepresented in the hospitality sector.
The COVID-19 pandemic has crushed the hospitality sector as companies laid off workers during waves of shutdown orders. Nearly 40% of all jobs lost during the pandemic in California have been in the hospitality industry, the union said.
Per the bill, which came into effect immediately, all employees who served at a company for at least 6 months in 2019, and who were dismissed for nondisciplinary reasons related to the pandemic, are eligible.
Employers have to notify these former employees about new vacancies that they are qualified for, and that are similar to their previous role, within five business days of the positions opening.
If more than one eligible former employee applies, the company must give the role to the person who served there the longest.
If the company decides to give the role to someone else because the laid-off employee isn't qualified, the company must send a letter to the former employee explaining the decision.
$500 per day to former employees if companies break the rules
Former employees have the right to file a complaint against the employer if it doesn't follow the rules. The company could face a civil penalty of $100 for each employee, as well as pay $500 to the employee for each day their rights were violated.
Companies that changed ownership or structure but still have similar operations must also follow the new rules, but Phil Ting, the San Francisco assemblyman who authored the bill, told CBS Los Angeles that small family-run hotels wouldn't be affected.
Newsom had rejected a similar rehire bill in September 2020 because he said it covered all lay-offs during the pandemic, whether directly related to the pandemic or not.
"As we progress toward fully reopening our economy, it is important we maintain our focus on equity," Newsom said in a statement Friday. "SB 93 keeps us moving in the right direction by assuring hospitality and other workers displaced by the pandemic are prioritized to return to their workplace."
The state has a 8.3% unemployment rate, per its Employment Development Department. Though this is considerably higher than the pre-pandemic rate of 4.5% in March 2020, this is nearly half of its peak of 16% in April 2020.
California's leisure and hospitality sector had just over 1.4 million employees in March 2021, a drop of almost 600,000 in 12 months.
But hospitality businesses and sit-down restaurants have started rehiring as the economy reopens, and a McDonald's in Florida is even paying people $50 just to show up for a job interview as it scrambles to find new staff.