Businesses slam proposed COVID-19 worker rehire law as too ‘burdensome’

Supervisor Mar’s legislation would require employers to take back staff at same pay

San Francisco Supervisor Gordon Mar wants to require employers to offer those they laid off as a result of the pandemic a chance to get their old jobs back— and not turn to new applicants that may cost them less. But some in the business sector have sharply criticized the proposal and even threatened a lawsuit.

The City’s Small Business Commission spent about an hour last week discussing Mar’s right to re-employment legislation and ultimately voted 6-to-1 against the proposal, saying even with amendments they couldn’t support it at a time when employers are struggling during the COVID-19 pandemic.

“We don’t have time for stuff like this,” Commissioner William Ortiz-Cartagena said, calling the proposal “super burdensome on small businesses.”

Mar told the San Francisco Examiner Friday that he still plans to advance the proposal and believes he can get at least eight of 11 board votes needed to pass the emergency ordinance. He has six backers at the moment. He plans to hold a Board of Supervisors committee hearing on the legislation in the second week of June and make amendments to address “any legitimate concerns” to try and shore up support.

The Golden Gate Restaurant Association, which represents restaurants in San Francisco, is withholding judgment. They have recommended Mar incorporate a number of amendments and are waiting to see those before taking a position.

But The San Francisco Chamber of Commerce said Friday the proposal would leave businesses “vulnerable to major legal costs.”

Mar said he wants to provide “economic security” for workers who lost their jobs as a result of the pandemic. Some 100,000 San Francisco workers have applied for unemployment benefits.

He said the loss of income means these workers are having trouble paying rent and buying food. “Getting them back to work as quickly and easily as possible at their previous employers is a way to minimize their economic precariousness,” Mar said.

Many workers’ lives have been thrust into uncertainty, and some are hoping the law could bring them security.

Erika Soria, 39, who lives on Treasure Island, worked at a cafeteria near Union Square for about two years, earning $18 an hour plus tips before the pandemic.

“They laid us off on March 15. As of right now, we haven’t heard anything back, whether they are going to be reopening or not,” Soria told the Examiner through a translator. “It’s a very difficult situation for me. I am a single mother.”

“For me it is very important that they pass this legislation into a law because it is going to be very difficult for me to find another job, and especially to find a job that is able to pay the same amount that I am earning right now. And there are many workers who are in the same situation,” she continued.

Under the legislation, an employer must extend offers of reemployment to those laid off workers at the same benefits and wages as before if they plan to hire for similar positions. If they accept, they must remain employed for at least 90 days. It applies to those who were laid off beginning Feb. 25. The law would sunset after 60 days, unless extended.

Mar said he has “heard from many workers that they’re afraid that they are not going to be rehired by their employer for a number of reasons” including that “their employer will take advantage of the large pool of unemployed workers right now and rehire younger workers at a lower wage.”

Among the changes Mar intends to make to the proposal is to exempt more businesses. It applies to those businesses who laid off more than 10 workers in a 30-day period and who have 10 or more employees, but Mar intends to amend it to only apply to businesses with 75 or more employees. Other amendments include exempting health care providers and hospitals and have it not apply to employees who are making more than 120 percent of the area median income.

He is also looking at removing some of the reporting requirements.

Mar said the rehire right “is a basic right that workers who are covered by union collective bargaining agreements enjoy, but unfortunately it’s a very small segment of all the workers who have been laid off.”

Sam Mogannam, a founder of the Bi-Rite Family of Businesses, which employs 350 people, sent a letter to the Board Supervisors earlier this month opposing the legislation, which he wrote “puts the burden on businesses to be the safety net when they are struggling to maintain operations during the pandemic.”

He suggested instead trying to help small businesses by reducing health care costs for both employers and laid off workers.

“We are already doing the right thing and trying to bring our staff back,” he wrote.

Mogannam said he was forced to furlough 55 staff members the week of March 15 “as the pandemic and shelter-in-place ordinance forced the closure of our cafe and creamery and our catering business evaporated overnight.”

He said he was spending $23,000 a month on health insurance premiums for the furloughed staff.

As of May 19, Mogannam said that he currently has 41 people furloughed, 17 furloughed and 24 self-furloughed, and they have “already re-employed 70 percent (38 staff) of the original 55 furloughed staff.”

He argued that businesses should focus their energies on “keeping their staff safe and surviving the adverse economic impact that the pandemic has had on them” and not have to comply with new requirements.

“Do you fully understand the pressures we are under?” he asked.

Mar said, “I don’t believe that it’s an unreasonable expectation that they should offer their jobs back to workers that they laid off before considering new applicants.”

The California Employment Law Council, which represents the interests of business, wrote a letter to the board threatening litigation, alleging the proposal violated the constitutional contracts clause and other federal and state laws. “And make no mistake—this law is ripe for legal challenge,” the group wrote in a May 19 letter to the board. “Indeed, if passed, the CELC will challenge it; and, if successful, will seek recoverable attorneys’ fees from the city.”

Mar said, “We’ve been working with the city attorney’s office on ensuring that the ordinance can be defended successfully in the event of a lawsuit.”

Lucia Lin, co-director of Youngworkers United, a group that advocates for employees and backs the proposal, said she understands that there is “a lot of uncertainty about how folks are going to make ends meet on the part of both business and for workers.”

“But workers are the folks who are an integral part of the businesses. They are the ones who make everything happen, who are cooking the food, who are serving and they deserve the respect to be called back to work as businesses begin to reopen,” Lin said.

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