ALERT: California Employers, New Federal and State Laws May Affect You

Authors: Employment Law Team

The American Rescue Plan Act of 2021 (the “Rescue Plan”) Expands COBRA Coverage

On March 11, 2021, President Joe Biden signed the Rescue Plan.  For employers with group health plans, the Rescue Plan places new COBRA obligations on employers and provides eligible employees with some COBRA relief. Employers are required to offer free COBRA coverage to eligible employees between April 1, 2021 and September 30, 2021. Eligible employees who lose group health insurance as a result of either an involuntary termination or a reduction in hours may be entitled to up to a six-month, 100% premium subsidy. Affected employers may receive a tax credit to offset the increased cost of the COBRA coverage.

California’s COVID-19 Rehiring and Retention Law Obligates Employees to Offer Positions to Laid-Off Employees

On April 16, 2021, Governor Gavin Newsom signed Senate Bill 93.  Between April 16 and December 31, 2021, when a job position opens, employers in the hotel, private club, event center, airport hospitality operations, airport service providers, and commercial building services industries must offer its qualified employees who were laid-off due to COVID, conditional, written offers of employment. Covered employees have five-business days to respond. If more than one employee responds, the employer must offer the position to the employee with seniority.  Employers must maintain specific records relating to compliance with this new law for three years. The California Division of Labor Standards Enforcement is tasked with enforcing this law and may order reinstatement, front and back pay, and benefits, and may also impose substantial penalties and liquidated damages if a covered employer fails to comply.  

***The information provided in this article is for informational purposes only and is not legal advice. Contact your employment counsel for advice regarding any particular issue or problem. ***