Legal and Labor Relations Newsletter - Summer 2026
This Legal and Labor Relations 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 the prior EP alert we released since our last newsletter for more information on the following topic:
· Hawaii Legislation Changes its General Excise Tax Treatment
Legal Updates: Federal/Global
Proper Completion of the Form I-9 is Now More Important Than Ever
In March 2026, Immigration and Customs Enforcement (ICE) significantly tightened its Form I-9 enforcement standards, reclassifying dozens of routine paperwork errors (aka technical violations) – previously correctable during an I-9 audit without a fine – as substantive violations now subject to immediate fines between $288 to $2,861 per form. The financial impact is substantial - a company with just 100 forms containing these newly elevated errors could face penalties ranging from $28,800 to over $286,100. ICE further makes clear under this policy shift that retaining copies of List A, B, or C documents does not cure any missing or incomplete information on the I-9. Proper Form I-9 training for production and H.R. staff members who help onboard newly hired employees is more important than ever.
Some of the often-occurring technical violations that are now considered substantive violations subject to immediate fine without opportunity to cure are:
- Failure to include date of birth in Section 1.
- Failure to include a date of signature in Section 1.
- Failure to identify the first day of employment in Section 2.
- Failure to record name and title of the employer’s representative in Section 2.
- Use of the Spanish-language Form I-9 outside of Puerto Rico.
For a full list of violations deemed substantive violations under the new stricter standard, see the government’s fact sheet here: https://www.ice.gov/factsheets/i9-inspection.
US Department of Labor (US DOL) Proposes New Regulations on Independent Contractor and Joint Employer Tests
The US DOL proposed new rules early this spring on independent contractor and joint employer classification that largely resemble standards used in the first Trump presidential administration. The public comment period has expired on both, and the US DOL is evaluating comments before issuing final rules. The current US DOL test for independent contractor status uses six equally-weighted factors (degree of worker control, investment, profit/loss opportunity, job length, skill level, and integrality to customer business) while the new test ranks degree of control and opportunity for profit or loss highest with skill, job length and integrality being less significant. The new rules also declined to adopt a stricter ABC test used by some states like California that favor employee classification. Similarly, the proposed rules on determination of joint employer status in vertical (supplier-customer) and horizontal (separate businesses using same worker in concert) relationships are considered more business-friendly because the focus is on substantial, direct and immediate control over the worker rather than unexercised reserved control in a contract or other types of indirect control from prior guidance. Final US DOL rules in these areas would not impact state laws using stricter worker-friendly tests because federal law in this area constitutes a floor rather than a ceiling.
Children’s Online Privacy Protection Act (COPPA)’s Amended Rule in Effect
On April 22, 2026, the Federal Trade Commission’s (FTC’s) amended Children’s Online Privacy Protection Act (COPPA) Rule took full effect for operators of child-directed websites and online services, as well as those with actual knowledge that they collect personal information from children under the age of 13. Some of the compliance obligations include separate parental consent for third-party disclosures, written data retention policy and security program, and expanded online notices. Operators that have not completed their compliance programs now face active enforcement exposure under the Rule. COPPA civil penalties carry a maximum of $53,088 per violation. The April 22, 2026 deadline marks the first comprehensive update to children’s online privacy obligations in over a decade, and one of the most significant since COPPA took effect in 2000.
Legal Updates: California
Risk Assessments & Cybersecurity Audit Certification Requirements (Rolling Deadlines: 2026–2030)
Regulations from the California Privacy Protection Agency (CPPA) require businesses to conduct a risk assessment before starting any processing of personal information that presents a "significant risk" to consumer privacy. For covered processing activities that began before January 1, 2026, and continue on or after that date, assessments must be completed by December 31, 2027. Annual summary reporting and attestation to the California Privacy Protection Agency (CPPA) begins April 1, 2028. Businesses must also amend their service provider agreements to require their service providers to assist them in completing their cybersecurity audits, risk assessments, and complying with the new Automated Decision-Making Technology requirements. Unlike the risk assessment, the cybersecurity audit submission deadlines vary between April 1, 2028 and April 1, 2030 depending on the size of the business’s gross revenue.
Pay Data Reporting Expands Starting with 2026 Reporting Year
As reported in our 2025 year-end newsletter (here), the California Civil Rights Department (“CRD”) expanded the reporting requirements for the state’s annual demographic pay data reporting. The reporting applies to employers with 100 or more employees during the calendar year with at least 1 employee who either (1) worked in CA or (2) worked remotely outside of CA but reported into an office in CA. For employers that meet this threshold, the employer is obligated to file the report by the second Wednesday in May of the following year (for example, the 2026 report is due on Wednesday, May 12, 2027). There are two types of reports required, one report covering the employer’s directly hired employees and a second report covering employees that the employer procured from a 3rd party labor contractor. These requirements are fully explained in the CRD’s Handbook (here) and FAQs (here). Starting with the report due on May 12, 2027 (covering employees in calendar year 2026), the CRD requires that the employees in both reports be slotted in one of 23 job categories (up from 10 job categories in previous years) and into 8 different race/ethnicity categories (with Middle Eastern North African – aka MENA – being the newest race/ethnic category added by the CRD last year). Regarding the MENA category, employers should include MENA in the 8 race/ethnicity options that they ask newly hired employees about during onboarding so that this information is included in the employer’s reporting due on May 12, 2027.
Sales Tax Will Apply to Digital Products Starting in January 2027
As part of California’s budgetary strategy, the Legislature recently enacted an upcoming expansion of California’s sales and use tax to digital products (i.e., pre-written software) whether accessed in physical media or electronically/online, such as software-as-a-service subscriptions. Previously, software delivered or accessed electronically was not sales-taxable in California. The expansion would take effect on in-scope transactions starting on January 1, 2027. A custom-designed/coded software solution built specifically for and unique to a particular customer would be excluded from the expanded sales tax on digital products. Depending on locality adjustments, California sales tax rates can range from 7.25%–11.25% on taxable purchases which would now include digital products starting January 1st.
Legal Updates: New York
New York Bill Drastically Impacts Personnel Files
The New York Legislature passed legislation (Senate Bill S3460) this past May significantly broadening employee rights regarding personnel files (click to read bill) that the governor is expected to sign into law. The bill contains three important requirements:
- Employers must provide current and former employees with a copy of their personnel records at no cost within a short timeframe of 5 business days of a written request (up to twice per calendar year).
- Employers must also notify employees within 10 calendar days whenever negative information is added to their file and allow the employee to submit a written rebuttal that becomes a permanent part of the personnel file. (A review caused by placing negative information in the personnel file is not deemed one of the two annually permitted reviews.)
- The employee’s personnel file must be retained from date of hire until 3 years after the employee’s termination of employment.
Violations carry a civil fine of $500 to $2,500 per violation, enforced by the New York Attorney General. The law also contains an anti-retaliation provision. If signed, the law takes effect 60 calendar days after becoming law.
New York Legislature Passes GenAI Transparency Bill
The New York Legislature passed legislation (Assembly Bill A3411B) that would require owners, licensees, and operators of generative AI systems and services to display prominent notices on the user interface that the outputs may be inaccurate. The bill is pending action from the governor. If signed, it would take effect 90 days thereafter. If signed into law, this requirement would apply to customer-facing AI tools such as chatbots, automated hiring assistants, and AI-driven production management platforms — making it essential for companies operating in New York to inventory their consumer-facing AI touchpoints and prepare compliant disclosure language ahead of the effective date.
If Signed into Law, Employer Documentation Burdens Will Increase for Their Sexual Anti-Harassment Training and Policies
The New York Legislature passed a bill (Assembly Bill A368A) shortly before adjournment in June 2026 that if signed by the governor will increase recordkeeping responsibilities of employers. The bill would take effect 90 days after becoming law. Specifically, employers must obtain a signed and dated acknowledgment from their employees each time they provide written notice of sexual harassment training and policy information. The acknowledgment must be provided in English and the employee’s primary language and retained for six years. And employers must provide seven days’ advance written notice of any changes to their sexual anti-harassment training or policy information.
New York's "No Severance Ultimatums Act"
New York has passed legislation entitled the "No Severance Ultimatums Act," (Senate Bill S372A), which is currently awaiting the governor’s signature. Once signed, the law takes effect immediately, leaving employers little to no lead time to update their severance agreement practices. Under the new law, any employer offering a severance agreement that includes a release of waivable claims must provide the employee, regardless of age, with written notice of the right to consult an attorney, at least 21 calendar days to review and consider the agreement, a 7-day revocation period after signing, and written confirmation that the agreement does not become effective until that revocation period has expired. Until now, these requirements applied only to employees age 40 or older under the federal Older Workers Benefit Protection Act. This new law extends those protections to all New York employees. Severance agreements that fail to comply with the statute will be void and unenforceable. Employees may voluntarily sign before the 21-day consideration period expires, but only if the decision is knowing and voluntary. Employers cannot pressure early signing by offering different terms or threatening to withdraw the offer. The statute also permits a limited waiver for severance agreements negotiated pursuant to a collective bargaining agreement that specifically acknowledges the law.
Minimum Wage Updates
Click here to see the Minimum Wage Chart.
Labor Relations Key BTL Agreement Updates
For Labor Relations Key BTL Agreement updates, please reach out to laborrelations2@ep.com.
EP Legal and Labor Relations Contacts
- Edward Pak (General Counsel): epak@ep.com
- Scott Bishop (Senior Vice President, Chief Employment & Litigation Counsel): sbishop@ep.com
- Joseph Scudiero (Senior Vice President & Chief Labor Counsel): jscudiero@ep.com
- Bob Pucher (Vice President, Labor Relations): rpucher@ep.com
- Alan Wu (Senior Director, Employment & Labor Relations Counsel): awu@ep.com
- Robyn Coltin (Director, Employment Law & Litigation Counsel): rcoltin@ep.com
- Jade Nguyen (Senior Privacy Manager): jnguyen@ep.com
- Melissa Antuono (Senior Labor Relations Specialist): mantuono@ep.com