Labor Relations and Legal Newsletter - September 2023
This Labor Relations and Legal Update highlights some salient changes that recently took effect or will take effect shortly. The material recapped in this newsletter is general information we are providing as a courtesy on subjects that may be of interest to you. We encourage you to consult with your legal advisors about the applicability of these changes and updates to your organization’s specific circumstances, and how best to handle them.
LEGAL UPDATES: PRIOR LEGAL ALERTS
It is important to Entertainment Partners (EP) that we keep our clients updated with the latest information as it becomes available, highlighting major enacted legislation, “best practice” guidance, and current industry practices. Please see prior EP alerts we have released since our last newsletter for more information.
LEGAL UPDATES: CALIFORNIA
LA City Extends Freelance Worker Protections
On March 15, 2023, the Los Angeles City Council passed Ordinance No. 187782 (the “Ordinance”), which provides that any contract between a hiring entity and a freelance worker valued at $600 or more (either by itself or when aggregated with previous written or oral contracts between the hiring entity and the freelance worker in a calendar year) must be in writing. The Ordinance went into effect on April 24, 2023. The requisite terms of the written contract are: (1) the name, mailing address, phone number, and, if available, email address of both the hiring entity and the freelance worker; (2) itemization of all services to be provided by the worker, the value of the services to be provided pursuant to the contract, and the rate and method of compensation; and (3) the date by which the hiring entity must pay the contracted compensation or the manner by which such date will be determined. A hiring entity must provide full payment to the freelance worker on or before the date specified in the written contract or, if the written contract does not specify a due date or if there is no written contract, no later than 30 calendar days after services are rendered. Employers should consult with their labor counsel to ensure compliance with the Ordinance.
LEGAL UPDATES: NEW YORK
New York Requires Employers to Provide Workplace Posters and Notices Digitally
On December 16, 2022, New York’s governor signed a bill, effective immediately, mandating that any legally-required state and federal workplace notices and posters must also be made available digitally to employees who work in the State of New York. The digital version of the notices and posters can be posted on the employer’s website or distributed to employees via email. Employers must also provide notice to employees that the documents required to be physically posted are available digitally. A list of required New York State workplace notices and posters is available here, while a list of federally-required notices and posters is available here. Employers who participate in optional E-Verify in New York must also post digitally the federal E-Verify posters, which can be downloaded from the employer’s own E-Verify account. The full version of the bill can be found here.
New York City Bans Discrimination Based on Height and Weight
Effective November 22, 2023, New York City bans discrimination in employment, housing, and public accommodations based on a person’s height and weight. Job advertisements with such limitations are likewise prohibited. Certain exemptions exist, such as when required by federal, state, or local laws or regulations, or when permitted by regulation adopted by the NYC Commission on Human Rights for particular jobs or categories of jobs. Such discrimination is also permissible when a person’s height or weight prevents the person from performing essential requisites of the job or when reasonably necessary for the execution of the normal operations of the business. The text of the City’s ordinance is available here.
LEGAL UPDATES: FEDERAL
EEOC AI Anti-Discrimination Guidance
On May 18, 2023, the U.S. Equal Employment Opportunity Commission (EEOC) released a technical assistance document warning employers that improper deployment of artificial intelligence (AI) to assist with employment-related decisions, such as recruiting, hiring, retaining, promoting, transferring, performance monitoring, demoting, or terminating, could violate Title VII of the Civil Rights Act (the federal anti-discrimination law). Title VII prohibits discrimination on the basis of race, color, national origin, religion, sex (including pregnancy, sexual orientation, and gender identity), disability, age (40 or older) and genetic information. Not only does Title VII prohibit intentional discrimination (or “disparate treatment” in employment) based on such protected characteristics, but it also generally prohibits employers from using neutral tests or selection procedures that have the effect of disproportionately excluding persons based on such characteristics if they are not “job related for the position in question and consistent with business necessity” (or “disparate impact” or “adverse impact” discrimination). The EEOC makes clear that an employer’s use of an algorithmic decision-making tool would constitute a selection procedure. To ensure that any use of AI to assist with employment-related decisions does not run afoul of federal anti-discrimination laws, employers – including production companies that may use algorithmic decision-making tools to decide whether to hire cast and crew – should review the EEOC’s latest guidance (found here) and consult with their labor counsel.
End of COVID-19 Pandemic Declarations
On May 4, 2020, in response to the COVID-19 national emergency, the Department of Labor (DOL), the Treasury Department, and the IRS published a Joint Notice, extending timeframes otherwise applicable to group pension, health, and welfare plans subject to ERISA and the Internal Revenue Code, by requiring that the period for certain action from March 1, 2020, until 60 days after the announced end of the national emergency (referred to as the “Outbreak Period”) be disregarded up to a maximum of one year. The Joint Notice provided extensions for the following COBRA timeframes: (1) the 60-day election period for COBRA continuation coverage; (2) the dates for making COBRA premium payments; (3) the date for individuals to notify the plan of a qualifying event or determination of disability; and (4) the dates for providing a COBRA election notice for group health plans and their sponsors and administrators. The IRS’ description of the Joint Notice relating to COBRA can be found here. Although the announced end of the national emergency was April 10, 2023, the DOL and the IRS confirmed that the COVID-19 Outbreak Period would end on July 10, 2023, despite it being more than 60 days after the announced end of the national emergency. Accordingly, as of July 10, 2023, standard COBRA election and payment deadlines reverted back to pre-pandemic deadlines. Employers are encouraged to consult with their labor counsel to ensure that any requisite and/or recommended communications with plan participants and COBRA continuants are provided.
EU-U.S. Data Privacy Framework Expected by Summer 2023
The European Commission is in the process of adopting an adequacy decision for data transfers based on the EU-U.S. Data Privacy Framework, which is designed to create a legal mechanism for transatlantic data transfers. Previous data transfer frameworks between the EU and the U.S., such as Safe Harbor and Privacy Shield, were invalidated by rulings of the European Court of Justice. U.S. and EU lawmakers are currently negotiating the remaining issues surrounding government surveillance, transparency, access to justice, and remedies to avoid future arguments that U.S. data protection laws fail to provide adequate protections required under applicable EU laws. With recent GDPR-related enforcement fines and rulings to further complicate the transfer of personal data across the Atlantic, the new Data Privacy Framework is eagerly awaited by organizations on both sides of the Atlantic.
COVID-19-Related Temporary Remote Verification of I-9 Supporting Documents No Longer Permissible Effective July 31, 2023
During the COVID-19 pandemic, the Department of Homeland Security (DHS) granted employers a temporary exception to conduct the required in-person review of original supporting identity and employment eligibility documents by permitting remote methods, such as emailed PDFs, video calls, or faxed copies. The prerequisites for employers to use the latter methods evolved over time, but the main burden has always been having to review I-9 supporting documents in person after the fact and updating the I-9s accordingly. The DHS announced an end to the COVID-19-era in person interview exception effective July 31, 2023, and will again require employers to complete I-9 supporting document reviews in person. Catch-up in person reviews and any corresponding updates to I-9s must be completed no later than August 30, 2023. See here for further information from DHS. Since the elimination of the COVID-19-related temporary remote verification procedures discussed above, a new DHS rule has been published that allows for an optional permanent remote verification procedure to be employed if a number of specific conditions have been met. For more information on this update, please see our prior EP alert on the subject here.
National Labor Relations Act Developments
On May 1, 2023, the National Labor Relations Board (NLRB) issued a decision requiring employers to look critically at the context of abusive conduct before disciplining an employee thereby making it more difficult for employers to discipline or terminate employees who have engaged in this behavior. While the setting in which the conduct occurred was taken into consideration during the Obama presidential administration, the NLRB during the Trump presidential administration changed the rules to allow employee discipline for misconduct regardless of the setting so long as the employer could establish that the discipline would have been the same had the misconduct occurred in the course of a protected concerted labor rights activity (i.e., making profane or racist/sexist statements or engaging in harassing/threatening behavior). Now we are seeing the NLRB under the Biden presidential administration returning to the use of setting-specific tests that vary based on the particular context the employee’s behavior occurred in.
Separately, the U.S. Supreme Court recently ruled in June 2023 that an employer could bring a state tort property damage lawsuit against a striking union for intentional destruction of employer property. This expanded the previous limitation of only being able to bring a federal unfair labor practice charge against the union via the NLRB channel.
Federal Corporate Transparency Act Reporting Requirements Take Effect January 1, 2024
Congress on January 1, 2021 passed the Corporate Transparency Act (CTA) as part of the 2021 National Defense Authorization Act. The CTA takes effect January 1, 2024 and significantly expands U.S. anti-money-laundering laws. Though intended to combat corruption, tax fraud, and other illicit financial activity, its sweeping requirements apply to many privately-owned businesses with U.S. operations. Specifically, the CTA will require a “Reporting Company” to provide information on its beneficial owners to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury. A “Reporting Company” can be either domestic or foreign, but there are twenty-three enumerated exemptions, many of which exempt entire industries. An individual or Reporting Company who violates the CTA is subject to a civil penalty of up to $500 for each day the violation continues, up to a maximum penalty of $10,000. Beneficial owners and senior officers of the Reporting Company may also be held liable in certain circumstances, so it behooves all production companies and studios to review the CTA to determine whether it applies. Experienced outside counsel should assist in making this determination and in preparing any required reports.
LEGAL UPDATES: MULTI-STATE
Florida Mandates Private Employers to Use E-Verify Starting July 1, 2023
Starting July 1, 2023, Florida joins the ranks of predominantly southern states by requiring that private employers with at least 25 employees use the federal government's E-Verify system for verification of an employee’s eligibility for employment in the United States. Federal law requires employers to complete an I-9 form and review listed acceptable supporting documents from the employee to verify employment. E-Verify is a federal program that is voluntary for private employers to use as an additional source of verification by inputting information from the completed I-9 for the Department of Homeland Security (DHS) to match the information against DHS records. EP currently assists production clients with E-Verify in the existing E-Verify mandatory states and is prepared to offer that same assistance to clients for productions filming in Florida.
Illinois Pay Transparency Law
On August 11, 2023, Illinois Governor J.B. Pritzker signed Illinois’ proposed pay transparency law (HB 3129) into law. HB 3129 amends the Illinois Equal Pay Act of 2003 to mandate that employers (defined as any business “for whom employees are gainfully employed in Illinois”) with 15 or more employees must include the pay scale and benefits for a position in any job posting (a hyperlink to a publicly viewable webpage that includes the pay scale and benefits satisfies the requirements of this law). Likewise, if an employer with 15 or more employees engages a third party to announce, post, publish, or otherwise make known a job posting, the employer must provide the pay scale and benefits to the third party and the third party is thereafter required to include the pay scale and benefits in the job posting (or a hyperlink to the pay scale and benefits). “Pay scale and benefits” is defined in the bill to include “the wage or salary, or the wage or salary range, and a general description of the benefits and other compensation, including but not limited to, bonuses, stock options, or other incentives the employer reasonably expects in good faith to offer for the position.” Illinois employers additionally are required to “announce, post, or otherwise make known” all opportunities for promotion to all current employees no later than 14 calendar days after the employer makes an external job posting for the position. This law only applies to positions that (1) will be physically performed, at least in part, in Illinois, or (2) will be physically performed outside of Illinois, but the employee reports to a supervisor, office, or other work site in Illinois. And the law only applies to job postings that have been posted after the effective date of this law.
Chicago Sexual Harassment Training Requirements
Since 2020, pursuant to SB 75, the State of Illinois has mandated sexual harassment training for its employees. Now, pursuant to a recent City of Chicago Human Rights Ordinance, Chicago employers must ensure that their employees completed requisite sexual harassment training by June 30, 2023, and annually thereafter. This is a separate requirement from the Illinois State requirement, though compliance with the two can overlap. The City training must include one hour of sexual harassment prevention training for all employees (two hours for managers and/or supervisors) along with one hour of bystander training for all employees. The City’s training requirements apply to employers located in Chicago as well as employers that are located outside of Chicago, but who have employees who may sometimes work in Chicago. The City law also imposes a posting requirement and recordkeeping requirements, the violation of which exposes employers to fines ranging from $500 to $1,000 per day per offense. The City’s training template, which can be found here, is sufficient to comply with the required one-hour training on sexual harassment prevention for employees.
New Requirements to Provide PTO in Illinois
Effective January 1, 2024, employees in Illinois can earn and use up to 40 hours of paid leave during a year. The new Illinois law applies to any size employer with employees in the State. Unlike paid sick leave in many other states and local jurisdictions, Illinois’ version is not sick leave, but instead is PTO that can be used for any reason. Cook County and the City of Chicago already have their own separate paid sick leave ordinances, so employers will not need to comply with the State law inside of Cook County or Chicago if they already comply with the local ordinances. However, if Cook County and/or the City of Chicago amend their respective sick leave ordinances on or after January 1, 2024, those ordinances may no longer be eligible for this exclusion. The new State law also does not apply to employees working under a collective bargaining agreement (“CBA”) already in effect on January 1, 2024, but would apply after the then-current CBA expires unless there is an express waiver in the CBA. In-State employees will accrue one hour of paid leave for every 40 hours worked and can accrue and use a maximum of 40 paid leave hours in a year. Although paid leave hours start to accrue as of either January 1, 2024 or the time of hire, whichever is later, there is a 90-day waiting period before employees can use them. Unused hours must be carried over from year to year and do not need to be paid out upon the end of employment; however, they must be reinstated if the employee is rehired within 12 months of separation. The employer can also choose to frontload the 40 hours at the start of each year instead of using the accrual method. A poster explaining employees’ rights to paid leave must be posted at the worksite, and a model poster will be made available by the State. The text of the law is available here and preliminary FAQs are available here.
Maryland Delays Paid Family Medical Leave Program Another Year
Maryland enacted a paid family medical leave (PFML) program originally starting employee- and employer-funded paycheck collections in October 2023 and benefits through the state system for eligible employees with qualifying reasons in January 2025. The State enacted further legislation to delay the launch deadlines another year to October 2024 and January 2026, respectively, to allow for adequate time to launch the program.
Paid Sick & Safe Time Leave in Minnesota
Effective January 1, 2024, employers with at least one employee in Minnesota must allow in-state employees to accrue one paid sick and safe time leave (“SST”) hour for every 30 hours worked up to a maximum of 48 hours in the first year of employment, and up to 80 hours in the second and subsequent years of employment. The employer can also choose to frontload the hours at the start of each year instead of using the accrual method. The leave can only be used for specified sick or safety issues described in the law. There is no waiting period before an employee can use accrued hours, but rather an employee is not covered by the law unless he/she has worked at least 80 hours for the employer in a year in Minnesota. Unused hours must be carried over from year-to-year and do not need to be paid out upon the end of employment (though they must be reinstated if the employee is rehired within 180 days of separation). The paystub must include the total number of SST hours accrued and the total number of SST hours used during the pay period. A notice of rights (the State will create a model notice employers can use) must be provided to employees by (a) posting a copy at the worksite, (b) providing each employee a copy directly, or (c) posting it in a conspicuous place on an online platform through which the employees perform work. Further, if there is an employee handbook, then the notice of rights must be included in the handbook. The SST law was part of a larger omnibus bill and does not contain an exemption for the motion picture industry. The bill is available here (please see Articles 12 and 13) and preliminary FAQs are available here.
Paid Sick & Safe Time Leave Specific to Bloomington, Minnesota
While the State of Minnesota’s SST leave law will go into effect on January 1, 2024, the City of Bloomington, Minnesota took a head start and implemented a new paid SST leave law as of July 1, 2023. Employers with five or more employees anywhere must allow employees working in Bloomington to accrue one paid SST leave hour for every 30 hours worked up to a maximum of 48 hours in the first year of employment, and up to 80 hours during the second and subsequent years of employment. Employers with four or less employees must also allow employees working in Bloomington to accrue unpaid SST hours using the same formula. The employer can also choose to frontload the hours at the start of each year instead of using the accrual method. The Bloomington ordinance applies to those employees who worked for the employer for at least 80 hours in a year within City boundaries, and such employees cannot use accrued SST hours until after a 90-day waiting period from the date of hire or July 1, 2023, whichever is later. There is no requirement to pay out unused hours upon end of employment, but if the employee is rehired with 120 days, any previous unused balance must be reinstated. The leave can only be used for specified sick or safety issues described in the law. A poster explaining employees’ rights must be posted at the worksite, and a model poster has been made available by the City. If there is an employee handbook, then the notice of rights must be included therein. The paystub must include the balance of SST hours accrued and available and the total number of SST hours used. The text of the Bloomington ordinance is available here and the FAQs and model poster are available here.
Minnesota Passes Paid Family Medical Leave Program Taking Effect in January 2026
Minnesota is the latest among over 10 other states to enact a paid family medical leave program. Minnesota’s program will launch on January 1, 2026 and will be funded by a combination of employee paycheck deductions and employer contributions. The program will be operated by the State, adopting similar qualifying reasons for benefits as other jurisdictions. Like other states, Minnesota will adopt regulations to facilitate the launch of its PFML program.
Multi-State Privacy Legislations
Indiana, Tennessee, Florida, and Montana have joined the U.S. privacy landscape, with now ten states having enacted comprehensive privacy legislation. In addition to the newly-enacted laws, Texas and Oregon are also on the horizon with privacy bills in the last stages of the legislative process. In line with existing U.S. privacy legislation, these pieces of legislation introduce requirements governing the collection, use, sale and sharing of consumer data, and establish consumer data rights. While the earliest compliance enforcement date for the new state laws identified above does not begin until January 1, 2024, organizations can assess their potential impact and should begin to prepare for these changes now.
Minimum Wage Updates
Click here to see the latest Minimum Wage Chart.
LABOR RELATIONS KEY UPDATES
Click here to see the chart of updates to Collective Bargaining Agreements.
EP LEGAL AND LABOR RELATIONS CONTACTS
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