Legal and Labor Relations Update - 2025 Year End

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 on the following topics:

• Client Alert: 2026 Loan-Out CA EDD Reporting

Legal Updates:  Federal/Global

No Change to 2025 Form W-2 and Employer Assistance is Encouraged but Optional for Employee 2025 Federal Overtime Premium Tax Deduction Under One Big Beautiful Bill Act (OBBBA)

As reported in our mid-year newsletter, employees for tax years 2025 through 2028 are eligible to claim a deduction for overtime premiums paid under federal law.  The deduction is for the federal weekly overtime premium (i.e., 0.5x premium factor of the 1.5x overtime payment).  The maximum tax deduction per employee taxpayer aggregated across all paying employers is $12,500 ($25,000 married filing jointly), and the deduction contains a graduated phase-out for high wage earners ($150,000-$275,000 and $300,000-$550,000 for married filing jointly).  The IRS has issued transitional guidance for employers for the 2025 tax year that there will be no changes to the 2025 Form W-2 and that employers are encouraged but not required to provide employees any kind of support on the amount of the potentially deductible overtime premium.  Employers choosing to offer support need to use a reasonable method for determining the estimated deductible overtime premium.  EP is planning to offer talent and crew paid by EP some support for the employee to look up estimated amount of 2025 EP-paid federal overtime premium that may be deductible; EP expects its self-serve support to be available by end of January 2026.  Ultimately, employee taxpayers must work with their tax advisors on the right amount of overtime premium deduction to claim as the employee taxpayer is solely responsible for their personal tax return.

Federal Trade Commission (FTC) Publishes Updates to Children’s Online Privacy Protection Act (COPPA) Rule

The FTC finalized amendments (Final Rule) to the COPPA Rule relating to the collection, use, and disclosure of personal information about children under the age of 13. The updates took effect on June 23, 2025, and created stronger protections for children’s personal information, including by (1) expanding the definition of “personal information,” (2) requiring separate parental consent for third-party disclosures, (3) creating new obligations for the “support for internal operations” exemption, and (4) implementing more prescriptive security requirements, including data retention limits. Although companies subject to the updates do not need to fully comply until April 2026, businesses should begin evaluating the sufficiency of their current data collection, disclosure, and security practices to ensure compliance with the Final Rule’s robust requirements.

Executive Order Issued to Challenge Onerous State Laws Regulating Artificial Intelligence

President Trump recently signed an executive order directing the Department of Justice and other federal agencies to mobilize against state artificial intelligence (AI) regulatory laws considered detrimental to the advancement of AI.  Though existing state laws regulating AI remain in effect, the executive order prompts the federal government to research and take steps to file court and agency actions and eliminate state funding for states with AI laws considered preempted, unconstitutional or otherwise unlawful under federal law.   The executive order also encourages Congress to pass preemptive legislation to prevent onerous regulation of AI.   Once attempts to carry out the executive order take hold, court challenges from affected states are certain. 

Legal Updates:  California 

CA Expands Pay Data Reporting Starting with 2026 Reporting Year 

California started requiring private employers in California with 100 or more employees to annually report demographic pay data to the state’s Civil Rights Department in 2021 (discussed here) and expanded the reporting requirements in 2022 (discussed here).  Now, with Senate Bill 464, CA significantly expands the reporting requirement again, which takes effect in the 2026 Reporting Year for which reporting is due in May 2027.  

As a short recap, the pay data report must contain the demographic pay data of California employees who were employed in a Snapshot Period (which is defined as one full pay period to be chosen by the employer, falling between October 1 and December 31 of the Reporting Year).  And for the chosen Snapshot Period, the report must identify the number of employees by seven different race/ethnicity categories (with the addition of Middle Eastern North African (MENA) in the future) and three gender categories across 10 different job categories. The report also must identify the number of employees by race/ethnicity and gender whose annual earnings fall within each of 12 earnings pay ranges (referred to as “pay bands”). The categories result in multiple cohorts of people, and the mean and median hourly pay rate must be calculated for each cohort.   

By the second Wednesday of May 2027, the newest change to the 2026 Reporting Year expands the 10 job categories into 23 job categories, making an already complex report even more complicated.  But two additional changes imposed by the expanded law will go into effect sooner on January 1, 2026.  First, courts will be required to impose a financial penalty upon request by the Civil Rights Department for employers not filing timely compliant pay data reporting, thereby removing the court’s prior discretion to levy an optional penalty for transgressions.  Second, demographic information (i.e., race/ethnicity and gender) must be collected and stored separately from employees’ personnel records. Practically-speaking, this means that employers that collect demographic information as part of general onboarding paperwork may need to reconsider how they collect and store this information.  The full text of the expanded law (SB 464) is available here.

New Employee Notice Must Be Distributed in California by February 1, 2026 and Emergency Contact Information Must Be Permitted by March 30, 2026 

Senate Bill 294 (known as “The Workplace Know Your Rights Act”) in California takes effect in 2026.  By January 1, 2026, the California Labor Commissioner must create a new template notice for employees listing a myriad of legal rights and protections that exist for employees. And by no later than February 1, 2026 (and annually thereafter), employers must provide their current California employees (and to all new employees upon hire) with the new standalone notice.  

By March 30, 2026, employers must allow employees and new hires the opportunity to name an emergency contact and permit the employee to make a separate election that the emergency contact be notified by the employer in the case of the employee’s arrest or detention while on the job.  The employee must be allowed to update their emergency contact throughout the duration of employment.  

The penalty for violation is significant, carrying a fine of up to $500 per employee for failure to provide the notice.  Failure to allow designation of an emergency contact as described above may also result in another fine of $500 per employee for each day of violation up to a max of $10,000 per employee.  Punitive damages and attorney fees can also be assessed against the employer.  

As of this article’s publication date, the California Labor Commissioner has not yet released a template of the new notice.  The full text of the new law (SB 294) is available here. 

New Cal-WARN Notice Requirements Effective January 1, 2026

Beginning January 1, 2026, California employers subject to the Cal-WARN Act  and experiencing a triggering mass layoff, relocation or establishment termination must comply with expanded notice requirements under Senate Bill 617. In addition to existing obligations for mass layoffs, relocations, and establishment terminations, employers must (1) specify whether they plan to coordinate job placement or retraining services through a local workforce development board (LWDB) or another provider, (2) include accurate contact information for the LWDB along with a description of the rapid response services available to affected employees such as job search assistance and resume workshops, (3) provide information about the CalFresh food assistance program including how workers can apply, and (4) list employer contact name, phone number, and email address to ensure employees can reach a designated representative directly. These changes are intended to strengthen support for displaced workers by connecting them to reemployment resources, supportive services, and clear communication channels during employment transitions.

California Expands Personnel File Access to Include Training Records

Effective January 1, 2026, California employers will be required to include employee training and education records in personnel files accessible to current and former employees under Senate Bill 513(SB 513).  This legislation amends Labor Code § 1198.5, which previously granted employees the right to inspect records related only to performance and grievances. Now, that right extends to any education or training provided by the employer. If an employer maintains such records, they must include the employee’s name, the training provider’s name, the date and duration of the training, the core competencies covered (e.g., such as equipment or software skills) and any resulting certifications or qualifications. While SB 513 does not mandate the creation or retention of training records, it does require that any existing records be made available upon request.

California Update To Job Postings

In 2023, California introduced new pay transparency requirements as part of the State’s Equal Pay Act.  This required employers of 15 or more employees in California to post a “pay scale” in all job postings for open positions.  Effective January 1, 2026, California Senate Bill 642 (SB 642) amends existing pay transparency laws to clarify the definition of “pay scale.” More specifically, SB 642 redefines “pay scale” to mean a “good faith estimate of the salary or hourly wage range that the employer reasonably expects to pay for the position upon hire.”  

SB 642 also extends the statute of limitations for violations from two to three years after the last date a cause of action occurs and introduces a new six-year lookback period for relief. California employers should consult their employment counsel to ensure that all covered job postings include a good faith estimate of the pay scale under the amended law.

California Crime Victim Unpaid Leave & Related Expansion of California Paid Sick Leave

Starting October 1, 2025, pursuant to Assembly Bill 406, California law prohibits discrimination or retaliation against an employee who is a victim of certain crimes or whose family member is a victim of such crimes based on the employee taking leave related to a “qualifying act of violence.”  A victim is defined as a person against whom a violent felony, serious felony, and/or felony theft or embezzlement is committed, as well as a person who suffers direct/threatened physical, psychological, or financial harm due to the commission or attempted commission of specific crimes or delinquent acts.  

Employers with 25 or more employees must also approve leave for a purpose related to a “qualifying act of violence.”  Though, employees should provide reasonable advanced notice where possible.  And employers may request certification to justify the leave.  Employees may choose to use paid sick leave for this expanded purpose.  Starting January 1, 2026, California law also allows for the use of protected unpaid leave for such victims or family members of victims, which may run concurrently with FMLA and CFRA leave where eligibility requirements are met. 

California employers should consult their employment counsel about this expanded use of paid sick leave and/or protected unpaid leave and ensure leave policies, manager training, and HR practices incorporate the expanded protection.  Also, California employers should consult with their counsel regarding the “Survivors of Violence and Family Members of Victims Right to Leave and Accommodations” notice, which must be given to new hires and to all employees annually and may be updated based on changes to the law.

Salaried Exempt Minimum Increases in 2026

Because California’s white collar (i.e., executive, administrative, professional) salaried exempt pay minimum is a function of state minimum wage and the state minimum wage is increasing in 2026, California’s salaried exempt minimum likewise will increase from $1,320/week to $1,352/week starting January 1, 2026.  The California exempt computer professional minimum pay also rises as of January 1, 2026 to $58.85/hour or monthly and annual salary minimums of $10,214.44 and $122,53.13 respectively.

“Stay or Pay” Ban Takes Effect on Employment Contracts Entered into on or After January 1, 2026 

Though arguably already banned indirectly under other Labor Code provisions, California has enacted a general ban on agreements that require an employee to repay certain costs (including training costs, for example) if they leave the employer, or that would require the employee to repay the employer such costs if they leave their employment before a particular date.  The law applies to contracts entered into as of January 1, 2026.  There are a number of exceptions with conditions.  For example, tuition reimbursement agreements are still valid if (i) documented separately from the employment contract, (ii) the tuition is for a transferable credential and not required for the job, (iii) the repayment amount is specified in the agreement and does not exceed cost of tuition, and (iv) repayment is prorated based on amount of employment period completed and only applicable in case of resignation or termination for misconduct.  Another exception involves repayment of signing or retention bonuses which remain permissible if (i) specified in a separate agreement, (ii) the employee is notified of and given at least five business days to consult an attorney before signing, (iii) the employee has the choice to defer the  employer’s payment of the signing or retention bonus until completion of the specified service period, (iv) any repayment is interest free, prorated based on remaining term and cannot exceed two years, and (v) repayment of the prorated remainder only applies to voluntary resignations or termination for misconduct.  

Contracts that violate the stay-or-pay ban are unenforceable and the employee has a private right of action for damages of at least $5,000 and attorneys’ fees and costs.

California Imposes New Data Breach Notification Requirements

The new law, which takes effect on January 1, 2026, mandates deadlines for data breach notification to affected individuals and the State attorney general. The new law requires disclosure of a data breach “within 30 calendar days of discovery or notification of the data breach,” unless one of two exceptions apply: (1) “to accommodate the legitimate needs of law enforcement” or (2) “[as] necessary to determine the scope of the breach and restore the reasonable integrity of the data system.” Additionally, disclosures of a data breach will be required to be made to the California Attorney General “within 15 days of notifying affected consumers of the security breach” when more than 500 California residents have been notified. The new statutory deadlines are intended to promote timely notification addressing the absence of specific notification deadlines under current law. 

California Consumer Privacy Act (CCPA) Regulatory Updates

The California Office of Administrative Law approved revisions to the CCPA Regulations, which will take effect on January 1, 2026. Revisions to the CCPA’s existing obligations will require businesses to assess whether their current compliance programs will need updates, including with respect to the processing of sensitive personal information (now including personal information of consumers under the age of 16), and the handling of consumers’ rights requests. The revisions will also require businesses to evaluate whether their current interfaces for websites, mobile apps, connected devices, and augmented/virtual reality devices meet the updated transparency requirements. New obligations introduced in the revised regulations related to automated decision-making technology, cybersecurity audits, and risk assessments will take effect in 2027.

Legal Updates:  New York 

NY Secure Choice Savings Program Launches March 2026

Beginning in March 2026, New York’s Secure Choice Savings Program (“NY Savers”) will require private-sector employers with 10 or more employees in the previous calendar year, who have been in business for at least two years and do not already offer a qualified retirement plan to facilitate payroll deductions into Roth IRAs for eligible workers. Employers must register based on workforce size, with deadlines of March 18, 2026 for those with 30 or more employees, May 15, 2026 for those with 15 to 29 employees, and July 15, 2026 for those with 10 to 14 employees. Participating employers are responsible for setting up payroll deductions, distributing program materials and opt-out information to employees, and certifying exemption if they already sponsor a qualified retirement plan. Employers are not required to contribute to employee accounts and do not assume fiduciary responsibility. More information is available here.

New York City Expands Paid Safe & Sick Time Benefits

Effective February 22, 2026, employers must provide their employees working in NYC with 32 hours of unpaid safe and sick time leave each year, available for use immediately upon hire.  This allotment of unpaid leave is in addition to paid safe and sick time leave that NYC already requires (discussed here).  And it is also in addition to the 20 hours of paid prenatal leave that NYC newly required as of July 2, 2025 (discussed here).  The 32 hours of unpaid safe and sick leave is replenished at the start of each year, which is a 12-month period set by the employer.  The expansion also expanded the reasons that employees can use paid or unpaid safe and sick time in NYC, in cases of public disaster, caregiving, workplace violence incidents, and seeking of subsistence and housing benefits.  As of the date of this article, NYC has not yet published new FAQs to address the new unpaid safe and sick time, but the FAQs are expected to be updated here.  The notice that must be distributed to employees has also not been updated yet, but should be available here once it is published.

Salaried Exempt Minimum Increases in 2026

Since New York’s salaried exempt minimum is tied to minimum wage and New York minimum wage is increasing, New York’s new salaried exempt minimum pay will be $1,275.00/week (New York City and Nassau, Suffolk, and Westchester counties) and $1,199.10/week (rest of New York) starting January 1, 2026.

Legal Updates:  Multi-State

Sick & Paid Leave Updates

Pittsburgh’s sick leave law first went into effect in 2020.  Effective January 1, 2026, the law is being updated to increase the rate of accrual to 1 hour of sick leave for each 30 hours worked in Pittsburgh (previously 1 hour of sick leave for each 35 hours worked).  For employers with 15 or more employees (counted on a worldwide basis), the updated law also increases the maximum sick leave hours that can be accrued in a year while working in Pittsburgh to 72 hours (previously 40 hours per year).  If the employer has fewer than 15 employees worldwide, then the maximum sick leave that can be accrued per year while working in Pittsburgh is increased to 48 hours (previously 24 hours per year).  The mandatory notice that must be given to each employee who works in Pittsburgh and also must be posted at each of the employer’s worksites in Pittsburgh is available here.

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

• Kirsten Richesson (Executive Vice President, Chief Legal Officer):  krichesson@ep.com
• Joseph Scudiero (Senior Vice President & Chief Labor Counsel):  jscudiero@ep.com
• Bob Pucher (Vice President, Labor Relations):  rpucher@ep.com
• Scott Bishop (Vice President, Employment Law):  sbishop@ep.com
• Ed Pak (Vice President, Lead Technology & Privacy Counsel):  epak@ep.com
• Alan Wu (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