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The wildfires in Los Angeles County have wreaked devastation in the area, with thousands of homes and other structures, vehicles, and more destroyed by the worst wildfire in L.A. history. In response, on January 8, 2025, President Biden approved a Major Disaster declaration for California, allowing impacted communities and survivors to immediately access funds and resources to jumpstart their recovery.

As it stands, impacted individuals are in need of funds, housing, food, clothing, medical care, and other assistance as they navigate their current circumstances and begin to rebuild.  For employers who want to help, there are various tax-free ways to provide housing, cash, food, and other assistance to those affected by the wildfires that will give employees the resources and flexibility they need to get through these incredibly difficult times.

The various forms of assistance with tax-preferred treatment include “qualified disaster relief payments” under section 139, leave sharing programs, and assistance through employer-sponsored private foundations, donor-advised funds, and public charities. While each of these is beneficial, section 139 is the simplest method of assistance to establish, followed by leave-sharing programs, whereas private foundations, public charities and donor-advised funds will take some time to set up for employers that have not done so previously, and have restrictions as to how much assistance can be provided and to whom. 

Section 139

Under section 139 of the Internal Revenue Code, employers can provide employees with assistance, or “qualified disaster relief payments.” Section 139 provides an exclusion for “qualified disaster relief payments” from any source, including from employers, for reimbursement or payment of individuals’ eligible expenses in connection with a “qualified disaster.”  Qualified disaster relief payments are excluded from gross income, net earnings from self-employment, wages, and compensation subject to tax.

Qualified disasters are defined in section 139 to include a Presidentially declared disaster.  

Qualified disaster relief payments include payments to or for the benefit of an individual for:

  • reasonable and necessary personal, family, living, or funeral expenses incurred as a result of a qualified disaster; and
  • reasonable and necessary expenses incurred for the repair or rehabilitation of a personal residence or repair or replacement of its contents to the extent that the need for such repair, rehabilitation, or replacement is attributable to a qualified disaster, to the extent any expense compensated by such payment is not otherwise compensated for by insurance or otherwise. 

Qualified disaster relief payments do not include lost wages or other income replacement or unemployment, and cannot be for expenses that have been otherwise reimbursed, such as by insurance.

It’s important to note that section 139 does not require that any type of policy or plan be in place or that one be established. Moreover, section 139 does not require any tracking or substantiation of the amounts reimbursed to or paid for the benefit of an employee, and does impose any limits on the amount that can be reimbursed to or paid on behalf of an employee as long as the assistance provided is reasonably expected to be commensurate with the amount of unreimbursed reasonable and necessary expenses.  Employees are not required to return amounts or items reimbursed or paid for by their employer for the benefit of the employee.   

Under section 139, the provision of both cash and in-kind benefits is permitted. Accordingly, employers who want to assist employees affected by the LA Wildfires are able to provide cash, as well as temporary housing or hotel stays, medical care, food, clothing and other items employees may need as they face evacuations, smoke and other damage to their homes and possessions.

Employers may provide qualified disaster relief payments to employees directly, or via employer-sponsored private foundations or donor-advised funds, as discussed below. 

Practically, while section 139 does not require that a written plan be in place nor that employers obtain any type of substantiation, it’s suggested that employers communicate that any assistance being provided is intended to be qualified disaster relief under section 139. It’s further suggested that employers obtain some sort of confirmation that employees receiving the assistance are affected individuals and that the expenses have not otherwise been reimbursed or paid for by insurance or otherwise.

Section 139 payments are deductible to the same extent as if they were includable in income.

Leave Sharing

While cash and in-kind assistance such as temporary housing, hotel stays, clothing and food are critical, the flexibility that additional leave, or paid time off, provides is often just as necessary as it permits employees to not have to choose between working to get paid, or taking unpaid time off during a period when they are dealing with mounting expenses, required evacuations, and rebuilding, sometimes from scratch. As such, leave-sharing programs are another excellent resource for employers to provide employees affected by the wildfires.

Pursuant to Notice 2006-59, employers can establish leave sharing plans that permit employees to donate a portion of their accrued leave to a pool, which can then be used by employees who have been affected by a declared disaster and need additional leave (beyond what they have individually accrued). If the leave-sharing plan meets certain requirements, the leave donor employee is not taxed on the donated leave, and the leave recipient employee is able to use the extra paid time off (which is taxed as wages to them), as needed.

Notice 2006-59 provides the following requirements in order for the donated leave to not be taxable to the leave donor employee:

  • The plan must be in writing;
  • The plan must permit leave donors to deposit accrued leave in an employer-sponsored leave bank for use by other employees who have been adversely affected by a major disaster (defined to include employees for whom the disaster has caused severe hardship to the employee or a family member of the employee that requires the employee to be absent from work).
  • The plan may not permit a leave donor to deposit leave for a specific employee.
  • The plan must limit the amount of leave that may be donated by a leave donor in any year so that it does not exceed the maximum amount of leave that an employee normally accrues during the year.
  • The plan must allow a leave recipient to receive paid leave at their normal rate of compensation from the leave bank, which leave must be used for purposes related to the disaster.
  • The plan must specify a period with a reasonable limit, based on the severity of the disaster, after the major disaster occurs during which leave may be deposited and received.
  • The plan may not permit leave recipients to convert leave received into cash in lieu of using the leave, though a leave recipient may use leave received to eliminate a negative leave balance resulting from taking advanced leaved as a result of the disaster, or use leave received in lieu of leave without pay.
  • The employer must make a reasonable need-based determination as to how much leave each employee may receive.
  • Leave deposited on account of one major disaster may be used only for employees affected by that major disaster, and other than de minimis amounts, any leave deposited that is not used by leave recipients by the end of the period specified above must be returned to leave donors in proportion to the leave donated within a reasonable period of time so that the donor will be able to use the leave. (If leave donor employees have terminated, the employer may choose to return leave only to currently employed employees.)

Setting up a leave-sharing program that complies with the requirements of Notice 2006-59 is relatively simple. Employers who either have a plan or want to set one up should communicate the plan to employees so that employees who wish to donate, or who are in need of leave, are familiar with the program and can take advantage of it. In practice, senior and other employees with significant amounts of accrued leave that is unlikely to be used, particularly if there are any “use or lose” restrictions on accruing leave, are generally happy to donate to employees affected by disasters.

Leave-based Charitable Donation Programs

Another potential option that is dependent on IRS guidance is to set up a leave-based charitable donation program. Under leave-based charitable donation programs, employees can elect to forgo vacation, sick or personal leave in exchange for cash payments that the employer makes to IRC Section 170(c) charitable organizations, as instructed by IRS guidance.

While the IRS has not yet issued guidance with respect to the current LA Wildfires, it would be normal course for such guidance to be issued.  If so, it would generally permit employers to set up leave-based donation programs, but rather than donating leave to other employees, the employer would make contributions to charities benefitting victims of the LA Wildfires.  The IRS issued similar guidance in Notice 2017-70 with respect to the 2017 California wildfires.  Once guidance is released, employers may want to consider this as an option, particularly if the company’s employees have not been directly affected.  

In general, under these programs, cash payments made pursuant to these programs will not be treated as wages or otherwise be included in the donating employees’ gross income if the payments are made to the IRC Section 170(c) charitable organizations for victims, as specified in IRS guidance, and paid to the IRC section 170(c) organization by the deadline set in IRS guidance.

Cash payments made pursuant to IRS guidance under these programs are not be included in Box 1, 3 (if applicable), or 5 of Form W-2 for the donating employee. In addition, employees may not claim a charitable contribution deduction under IRC Section 170 for the value of forgone leave.

Employers may deduct these cash payments in accordance with IRC Section 170 or IRC Section 162 if they otherwise meet the respective requirements.

As noted, these programs are dependent on IRS guidance so we will need to wait and see.

Private Foundations

Like public charities, employer-sponsored private foundations can make need-based distributions to victims of disasters or to members of a charitable class, though they tend to have more restrictions than public charities because of the control the employer has.  However, employer-sponsored private foundations can make qualified disaster relief payments to employees or their family members under section 139, as long as certain safeguards are in place to ensure that such assistance is serving charitable purposes, rather than the business purposes of the employer.

In general, the IRS will presume that section 139 qualified disaster relief payments made by a private foundation to employees (or their family members) of an employer that is a disqualified person (such as a company that is a substantial contributor or manager of the foundation) are consistent with the foundation’s charitable purposes if:

  • the class of beneficiaries is large or indefinite (a charitable class),
  • the recipients are selected based on objective determinations of need, and
  • the selection is made using either an independent selection committee (where the majority of the members are persons who are not in a position to exercise substantial influence over the affairs or the employer) or adequate substitute procedures to ensure that any benefit to the employer is incidental and tenuous.

If these requirements are met, then the foundation’s payments in response to a qualified disaster are treated as made for charitable purposes, do not result in taxable compensation to the employees pursuant to section 139, and do not result in prohibited self-dealing merely because the recipient is an employee (or a family member of an employee) of the employer-sponsor. However, the presumption described above does not apply to payments that would otherwise constitute self-dealing, such as payments made to (or for the benefit of) individuals who are directors, officers, or trustees of the private foundation or members of the private foundation’s selection committee. Such payments would be fully taxable to such individuals and may cause the individuals and managers of the foundation who approved the payments to be subject to the highly punitive self-dealing excise taxes.

To the extent employers would like to utilize a private foundation to assist employees affected by wildfires, it’s suggested that advice be sought to confirm that the payments are excludable and do not subject the foundation’s management and disqualified employees (employees who are substantial contributors to the foundation or serve in a management role at the foundation) to any excise tax.

Donor-advised Funds

While donor-advised funds cannot generally make grants to individual persons, as with private foundations, there is an exception for certain employer-related funds or accounts established to benefit employees and their family members who are victims of a section 139 qualified disaster.

Specifically, a donor advised fund or account can make grants to employees and their family members in the following circumstances:

  • the fund serves the single identified purpose of providing relief from one or more section 139 qualified disasters,
  • the fund serves a charitable class,
  • recipients of grants are selected based upon an objective determination of need,
  • the selection of recipients of grants is made using either an independent selection committee (where a majority of its members consists of persons who are not in a position to exercise substantial influence over the employer’s affairs) or adequate substitute procedures to ensure that any benefit to the employer is incidental and tenuous,
  • no payment is made from the fund to or for the benefit of any director, officer, or trustee of the sponsoring community foundation or public charity, or members of the fund’s selection committee, and,
  • the fund maintains adequate records to demonstrate the recipients’ need for the disaster assistance provided.

To the extent employers wish to provide assistance through a donor-advised fund, it is essential to note that while section 139 does not have substantiation requirements, in order for amounts to remain tax-free to the recipient employees, the fund itself must maintain adequate records to demonstrate the recipients’ need for the disaster assistance provided. It’s suggested that advice be sought to confirm that the payments are excludable and meet the relevant requirements.

Charities

An employer can establish an employer-sponsored public charity to provide assistance programs to respond to disaster or employee emergency hardship situations, subject to restrictions on employer control over the organization. To ensure the program is not impermissibly serving the related employer, the following requirements must be met:

  • the class of beneficiaries must be large or indefinite (a “charitable class”),
  • the recipients must be selected based on an objective determination of need, and,
  • the recipients must be selected by an independent selection committee (where the majority of the members of the committee consists of persons who are not in a position to exercise substantial influence over the affairs of the employer) or adequate substitute procedures must be in place to ensure that any benefit to the employer is incidental and tenuous.

If these requirements are met, the public charity’s payments to the employer-sponsor’s employees and their family members in response to a disaster or emergency hardship are presumed to be made for charitable purposes, and are not taxable to the employees.

Given the restrictions, employers are not able to direct a charity to provide aid to specific employees, and employees would need to seek assistance under normal course. 

Takeaways

  • Now that President Biden has declared the LA Wildfires a disaster, it is possible to provide employees, contractors, and others impacted by the wildfires with non-taxable disaster relief under section 139. 
  • Section 139 relief can be implemented through various vehicles.
  •  Direct section 139 qualified disaster relief payments programs are simplest to set up, as they require no written plan and no substantiation, and permit employers to provide assistance such as cash, housing, food, medical care, and clothing immediately as long as it is reasonable to do so.
  •  Other vehicles, such as assistance through private foundations, require more planning and set up to ensure that payments made through them remain excludable and meet the relevant requirements.

Regardless of the vehicle(s) used, given the destruction wrought by these wildfires and the long road affected employees will face in rebuilding and recovering what they’ve lost, both materially and emotionally, assistance and support from employers in helping employees move forward will have a positive impact

Continue Reading How Employers Can Help Employees Affected by the Wildfires Tax-Free
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As you plan your to-dos for the year ahead, our “2025 Top 10” will guide you through the material employment law changes ahead in the Golden State. While we have not included all new California employment laws effective 2025, we’ve highlighted the major changes our clients need to know.

Key California ChangeEmployer To-Dos
(1)Minimum Wage Increase | As of Jan. 1, 2025, the state minimum wage increased to $16.50 per hour for all employers, regardless of employee headcount. Also as of Jan. 1, exempt employees in California must be paid a minimum annual salary of $68,640.Confirm with HR, payroll, and accounting that all necessary changes have been made.
Provide updated Wage Theft Prevention Act notices to any employees impacted by the increased minimum wage.
Post the updated Minimum Wage Order and the Wage Order applicable to your workplace. (Posters can be downloaded from the Department of Industrial Relations’ website here.)
Be sure to check for higher minimum wages required by state law (e.g., fast food workers and certain health care workers must be paid higher minimum wages) and local ordinances (e.g. in Menlo Park, the minimum wage is now $17.10 and in Mountain View, the minimum wage is now $19.20). As a practical matter, most employees outside of rural areas will be entitled to a higher minimum wage than provided by state law. (See here for a list of City and County minimum wage requirements maintained by UC Berkeley.)
(2)New Posting Requirements
Whistleblower Rights Posting: Under AB 2299, and beginning Jan. 1, 2025, employers must “prominently display” a specific notice of a comprehensive list of employee rights and responsibilities under existing whistleblower laws. The notice, provided by the Division of Labor Standards Enforcement (and linked here) must be posted in 14 point or larger type (printing instructions are provided on the notice to meet that requirement).
Workers’ Compensation Legal Advice Notice: Beginning Jan. 1, 2025, AB 1870 requires employers to include in workplace notices related to workers’ compensation rights and benefits that (i) an injured employee has the right to consult an attorney, and (ii) in most instances, attorneys’ fees will be paid from the injured worker’s award. 		Ensure you are posting the specific “rights and protections” drafted by the Labor Commissioner.  
Revise any workplace notices related to workers’ compensation rights and benefits to meet AB 1870’s requirements, and take the opportunity to check-in on other workplace notices to ensure they are up-to-date and compliant.
(3)No Longer Allowed to Require Employees to Use Vacation Before Receiving State PFL Benefits | Under AB 2123, and beginning Jan. 1, 2025, employers can no longer require employees to use up to two weeks of accrued vacation before receiving PFL insurance benefits paid by the state.Update leave and PTO policies (including in the employee handbook) to reflect this change.  
Train HR, managers and supervisors on the change.
(4)No Longer Allowed to Require a Driver’s License (For Most Positions) | Effective Jan. 1, 2025, SB 1100 prohibits employers from discriminating against individuals without a driver’s license. Employers are prohibited from advertising a position of employment that requires a driver’s license unless there is a reasonable expectation that driving is a function of the position, and the employer reasonably believes an alternative form of transportation would not be comparable in travel time or costs to the employer. An “alternative form of transportation” includes, but is not limited to, using a ride hailing service, using a taxi, carpooling, bicycling, or walking.Review current job advertisements, postings, applications and other pre-employment documentation to comply with SB 1100.  
Limit requirements for a driver’s license to positions where driving is a core function of the role. If it is not, consider whether alternative forms of transportation are viable options.
If requiring a driver’s license for a position, explain the rationale for the requirement in the job posting to provide transparency.
(5)Expanded Protections for Victims (or Family Members) of Certain Crimes | Beginning Jan. 1, 2025, AB 2499 expands rights for employees who are victims of crime or who have family members who are victims of crime.
Among other things, the new law:
Broadens the definition of crime victim to include a victim of a “qualifying act of violence”-which includes domestic violence, sexual assault, stalking, and other violent acts;
Expands the definition of a “family member” who is a victim of crime-and employees may now choose a “designated person”;
Makes both employees who are victims and those who have family members who are victims eligible for reasonable accommodations at work;
Adds new prescribed purposes for taking time off, including to participate in safety planning and to relocate; Expands paid sick leave under California’s Healthy Workplace Healthy Families Act to allow employees to use such leave when an employee or an employee’s family member is a victim.
Employers can limit leave to 12 weeks for victims, 10 days for employees who have family members who are victims, and 5 days for relocation related to family members who are victims. Employers can require the leave to run concurrently with Family and Medical Leave Act and California Family Rights Act leave, if the employee is eligible for that leave. And employers with 25 or more employees cannot retaliate or take other adverse actions against employees taking time off for prescribed reasons.
In addition, the new law recasts existing crime victim protections as unlawful employment practices within the Fair Employment and Housing Act and, thus, within the enforcement authority of the California Civil Rights Department.		Update written policies and handbooks to address the expanded rights for employees who are victims of crime or have family members who are victims of crime.
Train HR, managers and supervisors on the change in the law-including providing reasonable accommodations and expanded leave options for affected employees, such as allowing time off for safety planning, relocation, and other prescribed purposes, and ensuring that paid sick leave can be used when an employee or their family member is a victim.
(6)Workplace Violence Restraining Order Law Expanded to Include Harassment | Effective Jan. 1, 2025, SB 428 expands California’s existing workplace violence restraining order law to let employers seek temporary restraining orders on behalf of employees who have suffered harassment (in addition to workplace violence or threats of violence, which are bases for a temporary restraining order under existing law). Under the law, “harassment” is defined as a course of conduct directed at a specific person that serves no legitimate purpose and “seriously alarms, annoys, or harasses the person[.]” The course of conduct must be conduct which would cause a reasonable person to suffer substantial emotional distress, and must actually cause substantial emotional distress.Update anti-harassment training and policies to ensure employees understand the law’s definition of “harassment,” can recognize behaviors that meet the law’s criteria, know how to report any such behaviors, and understand the importance of reporting.
Make sure managers, EROs and HR understand that in the event of a complaint of harassment, the company can explore whether a workplace violence restraining order is an appropriate remedy to address the complaint.
(7)Minimum Requirements Relating to Contracts with a Freelance Worker | Under the “Freelance Worker Protection Act” (SB 988), starting January 1, 2025, employers must heed additional guardrails when using independent contractors:
Written contract: A written contract is required when freelancers (independent contractors) perform over $250 of freelance work (as specified in California Labor Code Section 2778(b)(2)) for a hiring entity within a four-month period. The contract must outline the scope of work expected, the rate of pay, and the method of payment.  
Pay requirements: Hiring entities must pay freelancers by the date specified in the contract, or within 30 days after the completion of services if no date is specified. Hiring entities cannot require independent contractors to accept less than the contract stipulates in exchange for faster payment.   Damages: If freelancers are not paid as required, they are entitled to damages equal to double the payment originally specified in their contract, plus costs and attorney’s fees-and the Act provides for a private right of action as well as action by public prosecutors.		Review the freelance-style services contained in Labor Code Section 2778(b)(2) to determine if SB 988 is relevant to the company.
If it is, train HR, hiring managers and procurement on SB 988’s obligations.  
(8)Combinations of Protected Characteristics | California is the first state to explicitly recognize intersectionality. Effective Jan. 1, 2025, SB 1137 amends anti-discrimination laws pertaining to employment, housing, public accommodations and education to clarify that those laws also prohibit discrimination based on the intersection, or combination, of two or more protected characteristics.
Under the new law, when a party claims multiple bases for discrimination or harassment, it may be necessary to determine whether the alleged discrimination or harassment could have occurred due to a combination of factors, or just a single protected characteristic.		Update anti-discrimination and anti-bias training to ensure HR, managers and supervisors understand that the Unruh Civil Rights Act and the FEHA prohibit discrimination on the basis not just of individual protected traits, but also on the basis of the intersectionality (combination) of two or more protected traits.
Keep watch on how courts handle claims of intersectional discrimination, and consult with counsel when faced with these (or any discrimination) claims by employees.
(9)Ban on “Captive Audience” Meetings | California is the 10th state to ban so-called captive audience meetings.  Effective Jan. 1, 2025, SB 399 prohibits employers from requiring workers to attend meetings on religious or political matters, including anti-unionization meetings.
California employers will face a $500-per-employee fine if they make workers sit through these meetings. Employers may continue to hold such meetings — a popular tool to discourage union organizing — as long as attendance is voluntary.		Ensure any meetings on religious or political matters (including anti-unionization meetings) are voluntary, and clearly communicate to employees the right to opt out of such meetings without repercussion.  
Train HR, managers and supervisors on SB 399’s requirements, noting that the law broadly defines “political matters.” Keep an eye on this trend. On November 13, 2024, the National Labor Relations Board banned captive audience meetings (though we’ll see whether this holds under the new administration), and several other states also passed similar laws banning captive audience meetings (e.g. Hawaii, Illinois, Vermont and Washington).
(10)Social Compliance Audits & Child Labor | Effective Jan. 1, 2025, under AB 3234, any employer that voluntarily subjects its business to a “social compliance audit”-whether the audit is conducted in whole or in part to determine if child labor is involved in the employer’s operations or practices-must post a link on the employer’s website to a report detailing the findings of the audit regarding child labor. Though “social compliance audit” is broadly defined to also include an audit of an employer’s wage and hour and health and safety regulations, only employers who conduct audits to determine if child labor is involved in the employer’s operations or practices are required to post a link to the report of its findings. Employers who believe they may be required to comply by posting a link to a report should first consult with counsel to walk through several considerations, including (i) whether the audit was “voluntary” by the law’s definition, (ii) whether the audit is privileged (and therefore should not be disclosed), and (iii) how the law interacts with other applicable ESG laws.  
Keep an eye out for regulatory guidance on AB 3234.

On the cutting room floor

There were a handful of notable legislative defeats in 2024, including:

  • The California minimum wage hike ballot measure (Proposition 32), which would have gradually increased the state minimum wage to $18 by 2026, was voted down (but it was a close vote, with a 50.2% of voters voting “no” and 49.2% voting “yes”).
  • AB 2930 would have regulated the use of automated decision tools in employment but the bill died in the Senate. We expect there’s more to come on this topic and we’re keeping a close watch on legislative developments impacting how employers use AI.
  • SB 1022 would have brought changes to FEHA administrative timelines, including changes to tolling rules, and would have extended the deadline for the Civil Rights Department Director to file a group or class complaint to seven years from the date of the alleged violation. Governor Newsom vetoed the bill, citing the limitations period, which would have been “significantly longer than the limitations period for similar civil matters, including class action litigation on behalf of employees” as the reason.
  • SB 1116, which would have made employees eligible for unemployment benefits after two weeks of absence due to a trade dispute or strike, failed to make it out of committee.

For advice and counsel on implementing changes to comply with any of your new California obligations, please contact your Baker McKenzie employment lawyer.

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Special thanks to co-presenters Jose Larroque, Ma. Rosario Lombera, and Javiera Medina-Reza.

In a climate marked by high levels of insecurity, immigration issues and the anticipated renegotiation of the Trade Agreement between Mexico, the United States and Canada, proposed labor reforms under Mexico’s first female president, Claudia Sheinbaum Pardo, aim to reshape the country’s workforce landscape.

In this episode of “Quick Chats for the Mexican Workplace,” we discuss the key legislative changes under the new administration, focusing on labor reforms such as ensuring gender pay equality, providing social security for digital platform workers, and reducing the work week.

Employers may face a potential 30-40% increase in payroll costs due to enhanced employee standards and must be vigilant about not exceeding the legal workday limits, as this is considered labor exploitation and is a crime.

With insights about the broader implications of these changes for employers with operations in Mexico from Pepe Larroque, Managing Partner of Baker McKenzie’s five offices in Mexico, our employment partners outline best practices and practical tips to prepare for 2025.

Click here to watch the video.

This video was recorded on December 2, 2024. 

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Join our AI and Cyber CLE Series

If your last name starts with A-G, you are probably well aware that your (recently extended) MCLE compliance deadline is on March 30, 2025. In addition to the general credit requirement, the state of California requires all attorneys to complete:

  • At least four hours of legal ethics
  • At least two hours on competence issues
  • At least two hours on the elimination of bias in the legal profession and society. Of the two hours, at least one hour must focus on implicit bias and the promotion of bias‑reducing strategies.
  • At least one hour on technology 
  • At least one hour on civility
Continue Reading California’s CLE Compliance Deadline Is Approaching – We can help!
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Here’s your go-to guide for annual filing and reporting requirements for global employee share plans.

It is almost the end of the calendar year and time for multinational companies to consider the necessary tax and regulatory filings for global share plans triggered by the close of 2024 (or by the end of a local tax year or company fiscal year different from the CY).

As you consider the steps your company may need to take to start the new year right, please see our Annual Equity Awards Filing Chart, describing key employee share plan filing and reporting requirements.

Should you have any questions about your company’s filing and/or reporting obligations, please contact your Compensation attorney.

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We are pleased to share with you The Global Employer – Global Immigration & Mobility Quarterly Update, a collection of key updates from Australia, Italy, Spain, Thailand, United Kingdom, and the United States.

Click here to view.

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Following the Illinois’ Supreme Court’s decision in Cothron v. White Castle System, Inc., the Illinois legislature amended the Biometric Information Privacy Act (BIPA), which the governor signed into law as Public Act 103-0769 on August 2, 2024. Public Act 103-0769 clarified that multiple BIPA violations against the same person using the same method, constitute a single violation and accordingly limited damages recovery. But since Public Act 103-0769 became law, its retroactivity has sparked controversy, which has only been fueled by recent conflicting court decisions on the issue. On November 13, 2024, the District Court for the Northern District of Illinois, in Gregg v. Central Transport LLC, held that the amendment applied retroactively because it was enacted to clarify an existing ambiguity in the statute’s text and was consistent with the statute’s intent. Thus, the court determined that the plaintiff’s damages were limited to a single recovery for the same BIPA violation.

Days later, on November 22, 2024, a different judge on the same court, in Schwartz v. Viking SupplyNet, held that Public Act 103-0769 did not apply retroactively. Though the Gregg decision made it appear that the retroactivity debate had been settled, the Schwartz decision reopened the door. It remains to be seen what the prevailing approach will be, which leaves BIPA defendants in a state of uncertainty.

Click here to read more.

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2024 was a ‘super year’ for elections. Half of the world’s population – some 4.7 billion people – went to the polls in 72 countries. Political shifts often lead to significant changes in employment laws. We’re here to help you prepare for the changes ahead and to stay ahead of the curve on employment law developments in the US and beyond.

A focal part of our programs (particularly in the US and in Mexico) will be what to expect from the recent presidential elections. In addition, we’ll address key legislative updates, workplace immigration changes, data privacy developments, new pay transparency obligations, expanding leave entitlements and more!

Please RSVP for the location(s) and topic(s) most of interest to you outlined in our “menu” below. (Please note that our Chicago program on January 8 is an opportunity to connect in person while the other review / preview updates are virtual.)

California 2024–2025 Employer Update

Wednesday, December 11, 2024
12 PM PT | 75-Minute Webinar
1.25 CLE credits pending.
In our typical “quick hits” format, our California team will bring you up to speed on hot topics like what to expect with the new Trump administration (including immigration changes and shifting enforcement priorities), California and federal 2025 legislative changes, new obligations with respect to pay equity reporting and wage / salary transparency, best practices for using AI tools in HR, practical tips and best practices with respect to confidentiality provisions, key data privacy developments, and workplace immigration updates.
Click here to register.

Illinois 2024–2025 Employment & Compensation Law Update 

Cohosted with the North Shore Labor Counsel
Wednesday, January 8, 2025
8 AM CT | Breakfast, Registration & Networking
8:30 – 10 AM CT | 90-Minute In-Person Legal Update
Chicago Botanic Garden
1000 Lake Cook Rd, Glencoe, IL 60022
1.5 CLE credits pending.
At our popular in-person event to kick off the new year, our Chicago team will cover what to expect with the new Trump administration (including immigration changes and shifting enforcement priorities), Illinois and federal 2025 legislative updates, important labor developments in the US and beyond, best practices for managing AI tools in HR, and practical tips for navigating employee activism.
Click here to register.

Canadian 2024–2025 Employer Update

Tuesday, February 11, 2025
12 PM ET | 75-Minute Webinar
1.25 CPD/CLE and HRPA credits pending.
In our typical “quick hits” format, our Canada team will bring you up to speed on major developments like Ontario’s ‘Working for Workers’ legislation, managing pay transparency obligations across Canada, significant case law updates and best practices for managing AI tools in HR.
Click here to register.

Mexican 2024–2025 Employer Review / Preview Video Chat

Proposed new labor reforms under Mexican President Claudia Sheinbaum Pardo aim to reshape Mexico’s workforce landscape. In our Review/Preview video chat, our Mexico team will outline best practices and practical tips to prepare what’s ahead in 2025.
Click here to register to receive our on-demand “Quick Chats” video.

If you are unable to attend during the live programming, please “register” for a copy of the webinar recording and materials.

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Companies with a US workforce can expect material changes to employment laws under the Trump administration, with impacts felt across their business operations. President-elect Trump’s first term, his campaign platform, and the typical shifts in a Democratic to Republican transition provide clues about what’s to come: federal agencies, policies and rules will become more business-centered and many of the Biden-era worker-focused protections will be rolled back.

Below are four major shifts we anticipate:

(1) Significant shifts in US Department of Labor policy

The end of the DOL’s 2024 final overtime rule. On November 15, 2024, a federal judge in Texas blocked implementation of the DOL’s final rule in its entirety, thereby preventing the agency from instituting increases to the salary thresholds for the “white collar” overtime exemptions under the Fair Labor Standards Act. While the government may appeal the judge’s order before the change in administration, any such appeal is likely to be short-lived come January 2025.

Accordingly, employers can halt plans to change their compensation levels or exempt classifications in response to the now-blocked rule. If such changes have already been made, employers should consult with counsel on how best to unwind undesirable changes, if any.

A lower burden for employers to classify workers as independent contractors under federal law. Trump will likely reverse Biden’s worker-friendly contractor classification efforts, making it easier for businesses to classify workers as independent contractors, and pivoting away from the Biden administration’s 2024 DOL independent contractor rule.

Notwithstanding this easing at the federal level, employers must remember that, under US and state law, there is no single test for independent contractor classification. Many states have their own tests, which are often more stringent than federal law and that apply to state wage and hour claims. Moreover, even within the same states, different tests will apply to unemployment claims, workers’ compensation, wage and hour, and taxation.

Continue Reading Back to Business: Trump’s Second Term and the Four Major Shifts Employers Should Expect
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President-elect Trump’s announced (and rumored) Cabinet member selections confirm that immigration enforcement will be a top priority from day one. With less than two months before inauguration day, US employers should take action now to ensure they are compliant with immigration regulations, are prepared for worksite ICE (Immigration & Customs Enforcement) or DOJ (Department of Justice) raids or enforcement activity and are ready to respond to government investigations or employee complaints regarding the employment of foreign workers.

We recommend the following three steps:

1. Conduct an Internal I-9 Audit

We expect to see a significant rise in worksite inspection and I-9 audits from the incoming administration. All employers are required to verify the work authorization of all employees in the United States by completing and maintaining the Form I-9. Employers should conduct internal I-9 audits every 2-3 years to identify potential liability and make necessary corrections; conducting an internal audit with counsel is a helpful tool to protect the audit under attorney/client privilege. Immediate steps employers can take include:

  • Conduct an internal I-9 audit if one has not been completed in the past 3 years.
  • Review current protocols and conduct internal training to ensure a consistent and complaint work verification procedure and prevent future errors.
  • Review electronic platforms to ensure they are complaint with I-9 regulations and audit ready.
Continue Reading The Pre-Inauguration Playbook: Steps US Employers Should Take to Ensure Immigration Compliance as We Enter a New Era of Enforcement