Labor Relations and Legal Newsletter - Fall 2024

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 on the following topics:

• More Right to Work Changes as UK Phases Out Biometric Residence Documents
• United States Department of Labor Issues Final Federal Rule Increasing Salary Thresholds for Executive-Administrative-Professional Classifications
• Reminder of Impending Deadline and New Requirements in California’s Annual Employer Pay Data Filing

Legal Updates:  California 

PAGA Reforms Provide Relief for Employers

The Private Attorneys General Act (PAGA) authorizes aggrieved employees to file lawsuits to recover civil penalties on behalf of themselves, other employees, and the State of California for Labor Code violations.  On July 1, 2024, California Governor Gavin Newsom signed SB 92 and AB 2288 into law, significantly reforming PAGA.  Some of the key points are outlined below:

• Stricter standing requirements in that a plaintiff must now have “personally suffered” each of the alleged Labor Code violations; 
• A plaintiff can only seek penalties on behalf of other employees within a one-year period;
• A potential $25.00 wage statement penalty will instead apply when the employee could “easily determine from the wage statement alone” the required information (hourly rate of pay, hours worked, etc.) and where a claim is based on inaccuracies in the employer’s listed name and address when the employee would not otherwise be confused or misled about the employer’s identity;
• A $50.00 wage statement penalty will instead apply when the violation is an isolated, non-recurring event that does not extend beyond 30 consecutive days or four consecutive pay periods;
• The pre-existing heavy $200.00 “subsequent violation” wage statement penalty would only be available if, within five years, an agency or court determined that a policy or practice giving rise to a violation was unlawful, or if a court determines the employer’s conduct giving rise to the violation was malicious, fraudulent, or oppressive; and
• Cure provisions and caps on penalties have been expanded where reasonable steps were taken to comply with the law

These reforms apply to civil actions filed on or after June 19, 2024.  Employers are encouraged to read the PAGA in its entirety for specifics and to work with their labor counsel to ensure compliance.

Los Angeles County Imposes Fair Chance Ordinance

Starting September 3, 2024, employers with five or more employees doing business in unincorporated areas of Los Angeles County will be required to comply with the Fair Chance Ordinance (the “Ordinance”).  The Ordinance will impact job postings as well as how employers conduct and handle employee and job applicant background checks.  With respect to job postings, covered employers must state in postings that “qualified applicants with arrest or conviction records will be considered for employment in accordance with the Los Angeles County Fair Chance Ordinance for Employers and the California Fair Chance Act.”  Also, covered employers cannot ask about criminal history before extending a conditional offer of employment, which must include certain statements required by the Ordinance.  Further, covered employers must operate within the guardrails set forth in the Ordinance as to how background checks must be conducted and handled, including its detailed process on pre-adverse action notices.  The Ordinance also carries a posting requirement.

Violations of the Ordinance carry potential penalties of up to $5,000 for a first violation, $10,000 for a second violation, and $20,000 for the third and subsequent violations.  Applicants and employees also have the option of filing a civil action in court.  Employers should, therefore, consult with their labor counsel to ascertain to what extent they are covered by the Ordinance and how to ensure compliance.

Workplace Violence Prevention Plan and Training Required in California Since July 1, 2024

California Senate Bill 553 went into effect on July 1, 2024 (this topic was originally covered in a prior EP alert from November 21, 2023).  Under this law, employers must train their employees in California about the different types of workplace violence hazards and how the employer will protect employees from and respond to these hazards.  This law applies to almost every employer with employees in California (although there are exceptions for corrections facilities, law enforcement agencies, teleworkers, places of employment where there are fewer than ten employees working at a place not accessible to the public, and healthcare facilities).  The law does not just impose a one-time requirement, but rather sets forth a continuing obligation that requires annual employee training, regular interval plan reassessment, and detailed recordkeeping.  Cal/OSHA is expected to enforce all of these requirements through inspections, citations, and hefty fines.  To assist employers, Cal/OSHA has published a resources page and FAQs about the law’s requirements (available here).

New California Law Regarding Work Environment Temperature

California has, for many years, protected its workers against potential heat illness from working outdoors by requiring additional paid rest periods, shaded rest areas, and available drinking water.  On June 20, 2024, the Cal/OSHA Standards Board expanded these protections and adopted a new heat illness prevention standard for indoor workplaces in California.  With emergency approval, the new indoor regulations (here) became effective on July 23, 2024.  Now, when indoor temperature equals or exceeds 82°F, the employer must provide one or more cool-off areas indoors of less than 82°F for workers to sit, rest, cool off, and drink water as frequently as the worker needs. Failure to provide these cool-off rest periods is treated like failure to provide a regular rest period, which triggers an hour of penalty pay at the regular rate of pay per employee for each day that cool-off rest periods are not provided, which also can lead to waiting-time penalties in California.  If the temperature reaches 87°F (or 82°F for employees wearing heat restrictive clothing or working in high radiant heat), the employer will additionally need to measure and keep records of the indoor temperature and take additional steps to lower the indoor temperature.

Employers also are now mandated to provide training to employees and supervisors on both indoor and outdoor heat illness prevention.  The training need only be provided once to each employee and supervisor.  The employer must also create, maintain and train employees on the employer’s written Heat Illness Prevention Plan (“HIPP”), a copy of which must be available to employees and their authorized representatives upon request.  Cal/OSHA has created a sample HIPP template that employers can use as well as FAQs about both the indoor and outdoor regulations (here).  

Legal Updates:  New York 

New York Becomes First State to Require Employers to Pay for Prenatal Care 

Starting January 1, 2025, all private employers in New York must provide pregnant employees with up to 20 hours of paid prenatal leave per calendar year.  The leave can be used in hourly increments for “health care services received by an employee during their pregnancy or related to such pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to the pregnancy.”  It must be paid in hourly installments at the employee’s regular rate of pay during the leave period and there is no requirement that unused prenatal leave be paid out at end of employment. 

This benefit was added to the existing sick leave requirements of the New York Labor Code (See Section 196-B) and is in addition to any paid sick and safe leave to which an employee is already entitled.  New York employers should consult with their labor counsel to ensure compliance with this law by the time it becomes effective in 2025.  

Legal Updates:  Federal/Global

Joint Statement on Enforcement of Civil Rights, Fair Competition, Consumer Protection, and Equal Opportunity Laws in Automated Systems

On April 3, 2024, the Consumer Financial Protection Bureau, Department of Justice’s Civil Rights Division, Equal Employment Opportunity Commission, Federal Trade Commission, Department of Education, Department of Health and Human Services, Department of Homeland Security, Department of Housing and Urban Development, and Department of Labor (the “Agencies”) issued a joint statement on the Enforcement of Civil Rights, Fair Competition, Consumer Protection, and Equal Opportunity Laws in Automated Systems (the “Statement”).  The Agencies acknowledge that artificial intelligence and automated systems may offer significant efficiencies and cost savings. However, they also highlight the risks these technologies pose, including the potential for perpetuating unlawful biases, automating potential discrimination, and potentially causing a myriad of other harmful effects. They define “automated systems” broadly to mean “software and algorithmic processes, including AI, that are used to automate workflows and help people complete tasks or make decisions.” In the Statement, the Agencies affirm that their enforcement authority extends to these technologies and commit to applying existing laws to automated systems and ensuring responsible development of automated systems in compliance with the law.  

Employers are encouraged to work with their labor counsel to ensure that automated systems are not employed that may run afoul of the Statement.   

The Federal Trade Commission’s Upcoming Nationwide Ban on Non-Compete Restrictive Covenants Has Been Halted by a Federal Judge

In early May 2024, the Federal Trade Commission (FTC) published a U.S. nationwide final rule (the “Rule”) that sought to prohibit businesses from entering into or enforcing agreements with current or former employees or individual independent contractors that would either prohibit such workers from working for the business’ competitor(s), starting a competing business, or otherwise acting in competition in the U.S. against the restricting business.  The Rule did not disturb bona fide confidentiality agreements, but would have prohibited non-solicitation, non-interference, and non-disparagement agreements that had the effect of restricting competition, similar to a non-compete.  The Rule was scheduled to take effect on September 4, 2024, and would have additionally required businesses to give written notification to affected individuals with existing prohibited non-compete restrictive covenants that those non-competes are void and no longer enforceable in the U.S.

The Rule has undergone multiple federal court challenges from the business sector, and, on August 20, 2024, a Texas federal court struck down the FTC’s attempt to ban non-competes as an overreach of the FTC’s authority from Congress and an arbitrary exercise of what power Congress has given the FTC.  The federal government is considering an appeal of the Texas federal court’s decision.  While the Rule’s final outcome remains to be decided, it is clear that the blocked Rule will not take effect on September 4, 2024 or any time in the near future.

Pregnant Worker Fairness Act Regulations

On June 18, 2024, the U.S. Equal Employment Opportunity Commission (EEOC) issued its final regulation to carry out the Pregnant Workers Fairness Act (PWFA), which requires a covered employer to provide a reasonable accommodation to a qualified employee or job applicant’s known limitations (i.e., physical or mental conditions) related to, affected by, or arising out of pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an undue hardship (i.e., something causing significant difficulty or expense).  A covered employer is defined to include private employers that have 15 or more employees.  And a reasonable accommodation may include (1) additional, longer, or more flexible breaks to drink water, eat, rest, or use the restroom; (2) seating for jobs that require standing; and (3) schedule changes, among other potential accommodations. 

The EEOC’s regulations, in many ways, expand a covered employer’s obligations to accommodate pregnancy-related conditions beyond what is required by the ADA.  For example, the PWFA may require employers to temporarily suspend the essential functions of an employee’s job to accommodate a pregnancy-related limitation.  Employers must, therefore, consult their labor counsel to ascertain whether and how they are impacted by the PWFA.

Updated EEOC Guidance on Harassment

On April 29, 2024, the EEOC released its Enforcement Guidance on Harassment in the Workplace (the “Guidance”), which applies to private employers of 15 or more employees and addresses harassment by co-workers, supervisors, and third parties, including clients.  More specifically, the Guidance addresses (1) virtual harassment by highlighting that comments based on stereotypes during Zoom meetings or in “joke” emails, for example, may constitute harassment; (2) an employer’s potential liability where an employee’s conduct on social media outside the work environment may contribute to a hostile work environment; (3) that unlawful harassment may still occur even where the harasser and victim share the same protected characteristic (“intra-class harassment”); and (4) that sex-based harassment can include questions about an individual’s sexual orientation, gender identity, gender transition, or intimate body parts.  Harassment can even include denial of access to a bathroom or facility consistent with the employee’s gender identity.

Covered employers should review their anti-harassment policies and ensure they are prepared to address any updates on what may constitute workplace harassment in light of the EEOC’s Guidance.

Legal Updates:  Multi-State

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

• 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
• Pantea Lili Ahmadi (Director, Corporate & Employment Law Counsel):  pahmadi@ep.com
• Robyn Coltin (Director, Employment Law & Litigation Counsel):  rcoltin@ep.com
• Lydiann Betzer (Labor Relations Senior Manager):  lbetzer@ep.com
• Jade Nguyen (Privacy Manager):  jnguyen@ep.com
• Melissa Antuono (Senior Labor Relations Specialist):  mantuono@ep.com