New Ordinances
On April 22, 2020, the City Council passed Right of Recall and Worker Retention ordinances. The Mayor has indicated that he supports both and will sign them into law shortly, likely early this week.
Who Is Impacted?
Both ordinances, which were initially proposed to apply citywide, are limited to the hospitality, property management and airport industries.
- “Hospitality” is defined as a hotel that has 50 or more guestrooms or that earned gross receipts in 2019 exceeding $5 million; the definition also encompasses in-hotel restaurants and event centers of more than 50,000 square feet or 1,000 seats.
- “Property management services” is defined as an owner or a contractor/subcontractor of an owner of a commercial building that employs 25 or more janitorial, maintenance and security service workers.
- “Airport employer” is defined as any employer that is required to comply with the Living Wage Ordinance in LA Administrative Code Section 10.37, excluding airlines and employers that have entered into concessionaire or non-concessionaire rental car services agreements.
Right of Recall Obligations
- Requires businesses to rehire laid-off workers by seniority for each category of employee.
- Creates a rebuttable presumption that a layoff on or after March 4, 2020, was due to a nondisciplinary reason.
- Requires businesses to provide employees with written notice (by mail, email or text) of open positions and provide five days for them to respond.
- Provides employees with a right of action to enforce their right to be recalled.
Worker Retention Obligations
- Requires businesses undergoing a change of ownership or control to maintain a list of employees.
- Requires new business owners to maintain this “preferential hiring list” and to hire from it for the first six months after a change of ownership or control.
- Requires new business owners to retain each employee hired pursuant to the Ordinance for at least 90 days, and to retain employees by seniority in case of layoffs.
- Bars new business owners from discharging an employee without cause for 90 days after a change of ownership or control.
- Requires new business owners to perform a written performance evaluation for employees retained during the 90-day transition period, and to consider offering them employment thereafter.
- Requires new business owners to post a notice of the change of ownership or control within five business days of the transfer and for six months after opening.
Budget
In addition, the Mayor released his proposed budget on April 20, 2020. The budget reflects the significant impacts of COVID-19 on the City’s fiscal situation and includes major reductions.
- The city has borrowed $70 million to date from its Special and Reserve Funds to front the costs related to its COVID-19 response.
- At the start of the crisis, the City had twice the Reserve Fund available as compared with 2008.
- The City does not intend to further tap the Reserve Fund.
- Civilian City employees will be furloughed for 26 (10%) workdays in the coming fiscal year.
- The hiring freeze is extended into the next fiscal year.
- There are significant cuts but no cuts to “essential” services such as those related to public safety, health and homelessness. The budget will focus on what the Mayor called “back to basics” programs:
- Public safety – there will be no meaningful cuts to the police or fire departments
- Sanitation and keeping our streets clean
- Homelessness and housing
- Food assistance for children and seniors
- $230 million in cuts to department budgets
- “Recreational and community services” will likely see major cuts.
- The city will have to “spend less on removing graffiti and caring for our urban forest.”
Return to Work
During a briefing on April 23, 2020, the Mayor acknowledged that the City is thinking about beginning to reopen businesses on May 17, 2020 (date subject to change). Earlier in the week, the Mayor announced five key pillars that must be in place before the city can begin to reopen:
- Testing, both for the virus and for its antibodies
- Real-time dynamic monitoring to see where cases are
- An immediate tracking and tracing response to quarantine people so that the virus can’t spread to others
- Building and maintaining hospital capacity—both the human talent of nurses, techs and doctors and the equipment and supplies—so hospitals can safely treat the worst cases
- Ongoing research and development into treatments and a vaccine for this disease