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We’re not even out of 2023, and New York employers who engage independent contractors already have new obligations to reckon with before next spring. On November 22, 2023, New York Governor Kathy Hochul signed the New York State “Freelance Isn’t Free Act”, increasing obligations for parties who engage freelance workers (including independent contractors). Starting May 20, 2024, hiring parties (including employers who engage independent contractors) must provide freelance workers with written contracts, pay them within a specified time period, maintain records, and satisfy additional new obligations—and freelance workers will gain a private right of action for violations.

The Act replicates the 2017 NYC’s Freelance Isn’t Free Law, adding administrative oversight and support from the New York State Department of Labor and the New York State Attorney General while maintaining New York City’s local law. The Act will apply to contracts entered into on or after the May 20, 2024 effective date.

Here are some key details:

Definitions: “freelance workers” and “hiring parties” 

The Act defines a “freelance worker” as “any natural person or organization composed of no more than one natural person, whether or not incorporated or employing a trade name, that is hired or retained as an independent contractor by a hiring party to provide services in exchange for an amount equal to or greater than eight hundred dollars”—but does not include certain sales representatives, practicing attorneys, licensed medical professionals, and construction contractors. Also, a “hiring party” is any person (other than government entities) who retains a freelance worker to provide any service.

Written contracts required

The Act requires a written contract if the freelance work is worth at least $800, inclusive of multiple projects over a 120-day period. The hiring party must furnish a copy of the contract, either physically or electronically. At a minimum, the written contract must include:

  1. The name and the mailing address of both the hiring party and the freelance worker;
  2. An itemization of all services to be provided by the freelance worker, the value of the services to be provided under the contract, and the rate and method of compensation;
  3. The date on which the hiring party must pay the contracted compensation (or the mechanism by which the date will be determined); and
  4. The date by which a freelance worker must submit to the hiring party a list of services rendered under the contract to meet the hiring party’s internal processing deadlines to allow compensation to be paid by the agreed-upon date.

The New York State Department of Labor will provide model contracts on its website for freelancers and hiring parties to use.

Continue Reading More Scrutiny and Obligations for NY Businesses Engaging Independent Contractors Coming Spring 2024
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Does your holiday wish list include CLE credit and a quick tutorial on what to expect in California labor and employment law next year?

Excellent!

Join us for our virtual California 2023-2024 Employment Law Update on Wednesday, December 13 @ 1PM PT.

2023 has been a year of dramatic change for California employers, but have no fear as this fast-paced webinar will prepare you for a brighter 2024.

In a 75-minute program, our team will cover:

  • How to protect company trade secrets given the expansion of the state’s restrictions on non-competes under SB 699 and AB 1076
  • Best practices and crucial steps to take to avoid costly wage and hour class actions
  • Practical tips for managing charged speech in the workplace, as well as action items to consider with ID&E programming in the wake of the Supreme Court’s SFFA decision
  • How to implement the new requirements for increased paid sick leave under SB 616
  • Compliance tips for the state’s new leave entitlement for reproductive loss under SB 848
  • How to craft a workplace violence prevention policy that complies with SB 553
  • A quick update on new privacy rules employers need to know
  • What the Labor Code’s new rebuttable presumption of retaliation means for employers and more!

Register here.

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Special thanks to our Baker McKenzie speakers Pamela Church, Teisha Johnson, Cyrus Vance, Elizabeth Roper, Laura Estrada Vasquez, Joshua Wolkoff and Industry Experts, Alexandra Lopez, Privacy Counsel, Calix, Una Kang, VP and Associate General Counsel, Wolters Kluwer, and Pamela Weinstock, Managing Counsel, Intellectual Property, Tiffany & Co.

Join us in person on Tuesday, January 23, 2024 for an exclusive event discussing the transformative power of generative AI and the unfolding regulatory landscape.

In-house counsel in the cloud/software, publishing and luxury and fashion fields at top companies such as Calix, Tiffany & Co. and Wolters Kluwer will share insights on how they are embracing generative AI and its impact on their business operations. We will also examine recent legal and regulatory developments and discuss practical approaches to tackle associated issues.

Panel discussions will cover topics such as:

  • how to navigate both the use of AI and new technology,
  • how to practically tackle regulatory compliance,
  • how to appropriately identify and guard against evolving threat factors and risks,
  • and more!

The program will conclude with a networking cocktail reception in Baker McKenzie’s New York office.

Click here to view the invitation.

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Effective February 6, 2024, all private employers in Texas will be prohibited from imposing or enforcing COVID-19 vaccine mandates as a condition of employment. While the practical impact of this new law may be limited, employers should still take note.

Newly-enacted SB 7 prohibits employers from adopting or enforcing a mandate requiring an employee, contractor, applicant for employment, or applicant for a contract position to be vaccinated against COVID-19 as a condition of employment or a contract position. The new law also prohibits employers from taking adverse actions against employees, contractors, and applicants based on their refusal to be vaccinated against COVID-19. An “adverse action” is defined as “an action taken by an employer that a reasonable person would consider was for the purpose of punishing, alienating, or otherwise adversely affecting an employee, contractor, applicant for employment, or applicant for a contract position.”

Workers may file complaints with the Texas Workforce Commission if they believe they have suffered an adverse action based on their vaccination status. Employers who violate the law face fines of up to $50,000 for each infraction.

Background

Prior to the enactment of SB 7, Texas largely prohibited vaccine mandates through executive orders issued by the Governor. On October 11, 2021, Governor Abbott issued Executive Order GA-40, prohibiting all entities from compelling individuals to receive the COVID-19 vaccine if they object to vaccination for any reason of personal conscience, including a religious belief or medical reason, such as prior recovery from COVID-19.  Prior to that, on August 25, 2021, Governor Abbott issued Executive Order GA-39, prohibiting government entities from compelling individuals to receive the COVID-19 vaccine, state agencies and political subdivisions from adopting any order requiring an individual to provide proof of vaccination status to enter any place or receive any service; and public and private entities that receive public funds from requiring consumers to provide proof of vaccination status to enter any place or receive any service. Even earlier executive orders banned vaccine passports and proof of vaccination to enter, access and receive services from businesses. 

The Final Word

SB 7 looks to put the final nail in the coffin for vaccine mandates in Texas, at least starting next February.

Notably, SB 7 does not carve out exceptions for healthcare settings, but does allow a health care facility, health care provider, or physician to establish and enforce a reasonable policy that includes requiring the use of protective medical equipment by an individual who is an employee or contractor of the facility, provider, or physician and who is not vaccinated against COVID-19 based on the level of risk the individual presents to patients from the individual ’s routine and direct exposure to patients.

To revisit return to workplace plans, please contact your Baker McKenzie attorney.

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Heads up, New York employers. New York recently expanded its #MeToo statute to bar some of the most common terms for which employers bargain in settlement agreements involving claims of discrimination, harassment or retaliation. On November 17, 2023, Governor Hochul signed S4516 into law, amending Section 5-336 of the General Obligations Law (“GOL”) (New York’s #MeToo statute) so that settlement agreements involving claims of discrimination, including discriminatory harassment or retaliation, cannot:  

  • Require the complainant to forfeit any consideration for the agreement if the complainant violates the nondisclosure or nondisparagement clause;
  • Require the complainant to pay liquidated damages if the complainant violates the nondisclosure or nondisparagement clause; or
  • Include or require an affirmative statement, assertion, or disclaimer that the complainant was not subject to unlawful discrimination, including discriminatory harassment or retaliation.

If settlement agreements contain these provisions, the complainant’s release is unenforceable (but the employer may still have an obligation to pay the settlement amount). The new law is effective as of November 17 and applies to all agreements entered on or after that date.

Other changes under S4516 for employers to know

21-day consideration period for complainant’s confidentiality preference can be waived

Under Section 5-336, New York employers are prohibited from including (or requiring to be included) in a settlement agreement any provision requiring nondisclosure of the underlying facts and circumstances of a sexual harassment or other employment discrimination claim, unless the condition of confidentiality was the complainant’s preference. If the complainant prefers confidentiality, certain steps are required (and this is where employers will see a change under S4516).

  • Before S4516, the complainant had to wait 21 days (the “consideration period”) before entering into a confidentiality agreement. If after the consideration period the complainant wished to move forward with confidentiality, the parties were required to enter into a separate agreement that memorialized the complainant’s preference for confidentiality and incorporated the preference into the larger settlement agreement. The complainant had 7 days in which to revoke the confidentiality preference before it became binding.
  • Under S4516, complainants can now waive the 21-day consideration period if they choose–but the requirements of a separate preference agreement and 7-day revocation period remain. Significantly, however, employers should note, for settlement agreements resolving employment discrimination claims in litigation, Section 5003-b of New York Civil Practice Law & Rules (CPLR) still requires a full 21-day review period before an employee signs an agreement containing a provision preventing the disclosure of underlying facts and circumstances of the discrimination claim.

Certain protections extended to independent contractors–and employers must notify complainants of a right to contact the Attorney General

In addition, under the existing provisions of Section 5-336, any provision in an agreement between the employer and employee / potential employee preventing the disclosure of factual information related to any future claim of discrimination is unenforceable unless the provision notifies the employee / potential employee that it does not prohibit the complainant from speaking with law enforcement, the Equal Employment Opportunity Commission (EEOC), the New York State Division of Human Rights, a local human rights commission, or an attorney employed by the employee / potential employee.

Now, under S4516, these protections apply to independent contractors as well. And employers must now also notify employees, potential employees and independent contractors of their right to speak to the Attorney General (in addition to the parties referenced above).

Takeaways

  • Employers must ensure that any template settlement agreements, agreements in progress or future agreements do not include liquidated damages clauses, forfeiture clauses, or clauses stating that the complainant was not subject to unlawful discrimination, including discriminatory harassment or retaliation. The inclusion of such clauses will now render the release of claims of discrimination, harassment, or retaliation unenforceable–but may not affect the employer’s obligation to pay the settlement amount.
  • Employers should ensure any template agreements used with employees, potential employees and independent contractors preventing the disclosure of factual information related to future claims of discrimination are updated to comply with the changes under S4516 (including notification of the right to speak to the Attorney General).
  • Employers should be careful to differentiate between the 21-day consideration period provided under S4516 for a complainant preferring confidentiality in a release agreement (which can now be waived) and the 21-day consideration period required under Section 5003-b of CPLR for employees resolving employment discrimination claims in litigation or in an administrative proceeding (which cannot).

For any questions related to S4516, please contact your Baker McKenzie attorney.

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In 2023, we helped US employers overcome a host of new challenges across the employment law landscape. Many companies started the year with difficult cost-cutting decisions and hybrid work challenges. More recently, employers faced challenges around intense political discourse boiling over in the workplace. We’ve worked hard to keep our clients ahead of the curve on these issues, as well as crafting enforceable noncompetes, developing nationwide strategies for pay transparency compliance, and preparing for federal and state leave law changes.

Our year-end employment update webinars and seminars will cover these and other critical topics that multistate employers need to know, including the key legislative changes taking effect in 2024.

Join us for one session or join all — it’s entirely up to you.

CALIFORNIA 2023–2024 EMPLOYMENT LAW UPDATE 
Wednesday, December 13, 2023
1 pm PT / 3 pm CT / 4 pm ET
75 minutes (Webinar)
Click here to register.

ILLINOIS 2023 –2024 EMPLOYMENT & COMPENSATION UPDATE
IN-PERSON CO-HOSTED BY THE NORTH SHORE LABOR COUNSEL
Thursday, January 11, 2024
8:00 am CT | Breakfast, Registration & Networking
8:30 am CT – 10:00 am CT | Legal Update
90 minutes (This session will not be recorded.)
Chicago Botanic Garden
1000 Lake Cook Rd, Glencoe, IL 60022
Click here to register.

NEW YORK 2023–2024 EMPLOYMENT LAW UPDATE 
Tuesday, February 13, 2024
10 am PT / 12 pm CT / 1 pm ET
60 minutes (Webinar)
Click here to register.

Click here to view the program invitation and additional program details.

To view these programs in a different time zone, click here. 
If you are unable to attend during the live programming, please “register” for a copy of the webinar recording and materials.

Each program is pending CLE accreditation.

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Many thanks to our Franchise, Distribution & Global Brand Expansion colleague Will Woods for co-authoring this post.

On October 25, 2023 the National Labor Relations Board issued a final joint employer rule (accompanied by a fact sheet) making it easier for multiple companies to be deemed “joint employers” under the law. This legal classification can have profound consequence by making independent entities now liable for labor law violations as well as obligations to negotiate with unions.

The new standard casts a wider net for “joint-employer” status

Under the new rule, an entity may be considered a joint employer of a group of employees if the entity shares or codetermines one or more of the employees’ “essential terms and conditions of employment.” The Board defines the essential terms and conditions of employment as:

  1. wages, benefits, and other compensation;
  2. hours of work and scheduling;
  3. the assignment of duties to be performed;
  4. the supervision of the performance of duties;
  5. work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
  6. the tenure of employment, including hiring and discharge; and
  7. working conditions related to the safety and health of employees.

How the new rule dramatically shifts away from the 2020 rule

In issuing the final rule, the NLRB rescinded the prior 2020 joint employer rule (a remnant of the Trump-era Board), which provided that a business is a joint employer only if it both possesses and exercises substantial direct and immediate control over one or more essential terms and conditions of employment-with “substantial” meaning control that is not exercised on a “sporadic, isolated, or de minimis basis. ” (For more on the 2020 rule, see our prior blog here.) The 2020 rule’s higher threshold meant a lower likelihood that businesses would be considered joint employers. The new rule’s impact on employers could be wide-ranging, and particularly difficult for non-unionized employers who are not used to navigating typical union activity such as being required to show up at the bargaining table, handling unfair labor practice charges, or dealing with picketing by a vendors’ employees (which would have previously been considered an illegal secondary boycott).

No direct (or even exercised) control required

The new rule rejects the previous rule’s focus on “direct and immediate control.” Instead, now, indirect or reserved control is sufficient to establish joint employer status. Thus, if a company has contractual authority over certain employment terms but never acts on that authority, that may be enough to establish a joint employer relationship. The same goes for a company that exercises authority over another company’s workers through a “go-between” company or intermediary, or a company requiring a vendors’ employees to follow certain health and safety rules while on-premises. In these instances, liability under the National Labor Relations Act, including the requirement to negotiate with a union, could ensue.

Continue Reading NLRB Announces Most Expansive Definition of Joint Employment Yet, With Potential Significant Implications for Franchisors, Staffing Agencies and More
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On October 30, 2023, President Biden issued a 63-page Executive Order to define the trajectory of artificial intelligence adoption, governance and usage within the United States government. The Executive Order outlines eight guiding principles and priorities for US federal agencies to adhere to as they adopt, govern and use AI. While safety and security are predictably high on the list, so too is a desire to make America a leader in the AI industry including AI development by the federal government. While executive orders are not a statute or regulation and do not require confirmation by Congress, they are binding and can have the force of law, usually based on existing statutory powers.

Instruction to Federal Agencies and Impact on Non-Governmental Entities

The Order directs a majority of federal agencies to address AI’s specific implications for their sectors, setting varied timelines ranging from 30 to 365 days for each applicable agency to implement specific requirements set forth in the Order.

The actions required of the federal agencies will impact non-government entities in a number of ways, because agencies will seek to impose contractual obligations to implement provisions of the Order or invoke statutory powers under the Defense Production Act for the national defense and the protection of critical infrastructure, including: (i) introducing reporting and other obligations for technology providers (both foundational model providers and IaaS providers); (ii) adding requirements for entities that work with the federal government in a contracting capacity; and (iii) influencing overall AI policy development.

Continue Reading Biden’s Wide-Ranging Executive Order on Artificial Intelligence Sets Stage For Regulation, Investment, Oversight and Accountability
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Happy Halloween from the EEOC! The federal agency’s 2022 EEO-1 Component 1 data collection is now open.

  • The deadline for submitting and certifying 2022 data is December 5, 2023

Covered employers

By way of reminder, all private employers that have at least 100 employees are required to file the EEO-1 form annually, detailing the racial, ethnic and gender composition of their workforce by specific job categories. Likewise, federal government contractors and first-tier subcontractors with 50 or more employees and at least $50,000 in contracts must file EEO-1 reports. The form does not currently include pay data, though some states (like California) have added that requirement. 

Non-binary employees

The updated instruction booklet provides more detail on reporting the sex of employees who self-identify as non-binary. Because the EEO-1 Component 1 data collection form still provides only binary options (i.e., male or female) for reporting employee counts by sex, job category, and race or ethnicity, the booklet states that employers may voluntarily choose to report employee demographic data for non-binary employees in the “comments” section of the report. Employers that voluntarily choose to report non-binary employees in the “comments” section should not assign such employees to the male or female categories or any other categories (i.e., job category and race or ethnicity) within the report.

For support with your filing obligations, please contact a member of our team.

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With special thanks to Danielle Benecke and Ben Allgrove for their contributions.

Baker McKenzie recently hosted industry leaders from Anthropic, Google Cloud and OpenAI in Palo Alto to discuss how in-house legal counsel can best reckon with the transformative power of GenAI.

Baker McKenzie partners joined the panel, sharing insights from their vantage point both advising clients on deploying GenAI and our own experience of using it within one of the largest legal businesses in the world.

The discussion was conducted under Chatham House rules, but read our 5 strongest recommendations for in-house counsel here.