Quick Hits

• Contracts for freelance work of $250 or more must be in writing and contain certain specific information regarding services to be provided and dates for contract completion, among other things.
• Payment for freelance work must be made on time or within thirty days after the completion of the work if no due date is specified in the contract.
• The FWPA prohibits discrimination or adverse action against freelance workers for protesting violations of the FWPA or seeking to enforce it.
• The FWPA takes effect on January 1, 2025.

“Freelance Workers” and “Hiring Parties”

The FWPA defines “freelance worker” as “a person or organization composed of no more than one person … that is hired or retained as a bona fide independent contractor by a hiring party to provide professional services in exchange for an amount equal to or greater than two hundred and fifty dollars ($250).”

A “hiring party” is defined as “a person or organization in the State of California that retains a freelance worker to provide professional services.” The FWPA specifically excludes the following from the definition of “hiring party”: the U.S. government, the “State of California or any subdivision thereof,” a foreign government, and “individual[s] hiring services for the personal benefit of themselves, their family members, or their homestead.”

Contracts Must Be in Writing

Under the FWPA, contracts between hiring parties and freelance workers must be in writing. The hiring party must provide the freelance worker with a signed copy of the written contract, either physically or electronically, and must retain the contract for at least four years.

Contracts Must Include Certain Information

Applicable contracts must include the following information, at a minimum:

• “The name and mailing address of each party.”
• “An itemized list of all services to be provided by the freelance worker, including the value of those services and the rate and method of compensation.”
• “The date on which the hiring party shall pay the contracted compensation or the mechanism by which the date shall be determined.”
• “The date by which a freelance worker shall submit a list of services rendered under the contract to the hiring party to meet the hiring party’s internal processing deadlines for purposes of timely payment of compensation.”

Notably, the FWPA provides that where a formal written contract does not exist, the parties’ actions and communications may serve as evidence of contract formation.

Payment

The FWPA specifies that “[e]xcept as otherwise provided by law, a hiring party shall pay a freelance worker the compensation specified by a contract for professional services: (1) [o]n or before the date compensation is due pursuant to the contract [or] (2) no later than 30 days after the completion of the freelance worker’s services under the contract,” if the contract does not specify a payment due date.

Prohibition Against Discrimination

Under the FWPA, a hiring party may not “discriminate or take any adverse action against a freelance worker that penalizes a freelance worker for, or is reasonably likely to deter a freelance worker from, taking any of the following actions”:

• “Opposing any practice prohibited by [the FWPA].”
• “Participating in proceedings related to the enforcement of [the FWPA].”
• “Seeking to enforce rights provided by [the FWPA].”
• “Otherwise asserting or attempting to assert rights provided by [the FWPA].”

Enforcement

An aggrieved freelance worker may bring a civil action to enforce the FWPA and may be entitled to recover reasonable attorneys’ fees and costs, injunctive relief, and any other remedies deemed appropriate by the court.

The FWPA provides that “[d]amages shall be awarded to an aggrieved freelance worker as follows”:

• “If the freelance worker requested a written cont[r]act prior to commencing work under the contract and the hiring party refused in violation of Section 18103 [of the FWPA], the freelance worker shall be awarded an additional one thousand dollars ($1,000).”
• “If the hiring party failed to pay the freelance worker the contracted compensation by the time required under Section 18102 [of the FWPA], the freelance worker shall be awarded damages up to twice the amount that remained unpaid at the time payment was due. If the freelance worker requested a written contract prior to commencing work under the contract and the hiring party refused in violation of Section 18103 [of the FWPA], the amount unpaid shall be determined by the rate the freelance worker reasonably understood to apply to the work.”
• “If the hiring party violates any other provision of [the FWPA], the freelance worker may be awarded damages equal to the value of the contract or the work performed, whichever is greater.”

Ogletree Deakins will continue to monitor the FWPA and will provide updates on the firm’s California blog as additional information becomes available.

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The first article in this series provided a general overview of the OSH Act and OSHA; the second article examined OSHA’s rulemaking process; the third article reviewed an employer’s duty to comply with standards; the fourth article discussed the general duty clause; the fifth article addressed OSHA’s recordkeeping requirements; the sixth article covered employees’ and employers’ respective rights; the seventh article addressed whistleblower issues; and the eighth article covered the intersection of employment law and safety issues; and the ninth article discussed OSHA’s Hazard Communication Standard (HCS). In this, the tenth article in the series, we examine voluntary safety and health self-audits.

Quick Hits

• Voluntary self-auditing may assist organizations in identifying and addressing hazards, demonstrating commitment to safety, improving regulatory compliance, and evaluating trends in safety performance.
• OSHA has implemented a policy that outlines certain protections for companies that conduct documented voluntary self-audits and take corrective action to address any identified hazards.
• Other legal protections for self-audit information include attorney-client privilege, the work product doctrine, and state-specific audit privileges.

In today’s complex regulatory landscape, voluntary self-auditing has become a common practice for organizations to ensure compliance with workplace safety and health regulations. While audits can be a valuable tool for identifying and addressing potential hazards, they also raise concerns about the potential for audit information to be used against companies in legal proceedings.

What Is a Voluntary Safety and Health Self-Audit?

A voluntary safety and health self-audit is a systematic process conducted by an organization to assess its workplace safety practices and compliance with OSHA regulations. It involves a thorough review of various aspects of the workplace and organizational adherence to legal requirements.

Conducting a voluntary safety and health audit generally involves several key steps. Audit teams—often comprised of company personnel and outside consultants—assess, among other things, safety procedures, training, equipment, and compliance with regulations. The scope of an audit can vary from limited to comprehensive, depending on a company’s size and needs. Gathering information through interviews, observation, and technical assessments helps identify potential hazards and areas for improvement. Once an audit is complete, a report is often generated that outlines findings, recommendations, and corrective actions.

Potential Benefits of Voluntary Self-Auditing

Safety and health audits offer a comprehensive approach to monitoring compliance, identifying hazards, and demonstrating diligence in regulatory efforts. Voluntary self-auditing offers several benefits for organizations, including:

• Identifying and addressing hazards: Regular audits can help companies proactively identify and address safety hazards before they lead to accidents or injuries.
• Demonstrating commitment to safety: Audits can show that a company is taking workplace safety seriously and is committed to providing a safe and healthful working environment for its employees.
• Improving regulatory compliance: By regularly assessing their compliance with safety regulations, companies can reduce their risk of fines and penalties or lessen fines and penalties if they are issued against the company.
• Identifying trends: Over time, audits can help companies identify trends in safety performance and make data-driven decisions to improve their safety programs.

Potential Risks of Self-Auditing

Despite the benefits, there are also potential risks associated with self-auditing. One significant concern is that audit information may be used against a company in legal proceedings, such as in OSHA enforcement.

OSHA’s Voluntary Self-Audit Policy

To address some of these concerns, OSHA has implemented a voluntary self-audit policy. The policy statement, titled, “Final Policy Concerning the Occupational Safety and Health Administration’s Treatment of Voluntary Employer Safety and Health Self-Audits, was published in the Federal Register in July 2000. This policy outlines certain protections for companies that conduct documented voluntary self-audits and take corrective action to address any identified hazards.

Key provisions of the policy include:

• No routine requests for self-audit reports: OSHA will not generally request self-audit reports at the initiation of an inspection.
• No citations for corrected conditions: If a company discovers a violation through a self-audit and corrects it before an inspection, the policy states OSHA will not issue a citation.
• Protection from willful violation findings: If a company is responding in good faith to a violation identified through a self-audit, the policy states that OSHA will not use the audit report as evidence of a willful violation.
• Penalty reduction: Companies that conduct self-audits and take corrective action may be eligible for a penalty reduction.

Other Legal Protections for Audit Information

In addition to OSHA’s policy, there are other legal protections that may be available to protect audit information. These include:

• Attorney-client privilege: If an attorney is involved in conducting or reviewing the audit, certain communications between the attorney and the company may be protected by attorney-client privilege.
• Work product doctrine: This doctrine protects certain materials prepared by an attorney in anticipation of litigation.
• State-specific audit privileges: Some states have enacted laws that provide specific protections for self-audit information.

While many states afford employers a so-called “audit privilege” that is intended to prevent the audits or their results from being used against an employer in litigation, those audit results can provide a roadmap for someone seeking to assail the employer’s efforts and lead them to information that is disadvantageous to the employer. Moreover, in some states the privilege is somewhat limited, and in others there is no such privilege.

Voluntary self-auditing can be a valuable tool for improving workplace safety and health. However, there are potential legal risks associated with self-auditing, so organizations may want to take steps to protect their audit information. By understanding OSHA’s voluntary self-audit policy and other available legal protections, companies can use self-auditing to enhance their safety programs while potentially minimizing their legal risks.

Ogletree Deakins’ Workplace Safety and Health Practice Group will publish additional articles on the Workplace Safety and Health blog as an ongoing part of its OSH Law Primer Series. The next article in the series addresses OSHA citations.

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Quick Hits

• Newly enacted AB 2499 expands the FEHA by making it unlawful to discriminate or retaliate against an employee for taking time off from work for jury duty or to comply with a subpoena or other court order as a witness in a judicial proceeding, or, if the employee is a victim (i.e., an individual against whom a “qualifying act of violence” has been committed) or has a family member who is a victim, for taking time off to obtain relief or for other related reasons, as enumerated in the law.
• Victims of “qualifying acts of violence” are provided with certain job-related protections under the law, including an entitlement to reasonable accommodation.
• Employees may use paid sick leave for time taken off for a purpose specified under this new law.
• Employers must provide employees with written “notice” of their rights under this new law.

Expansions to Protections Against Discrimination and Retaliation

AB 2499 makes it an unlawful employment practice, under the FEHA, to discriminate or retaliate against:

(a) an employee who is taking time off to serve on a jury;

(b) an employee, including an employee who is a victim, for taking time off to appear in court to comply with a subpoena or other court order as a witness in any judicial proceeding;

(c) an employee who is a victim, or who has a family member who is a victim, for taking time off from work to obtain or attempt to obtain any relief, including, but not limited to, “a temporary restraining order, restraining order, or other injunctive relief, to help ensure the health, safety, or welfare of the victim or … the family member of the victim”; or

(d) an employee who is a victim, or who has a family member who is a victim, from taking time off from work for any of a number of enumerated situations, including, but not limited to, seeking or obtaining medical attention, psychological counseling, or mental health services with respect to injuries caused by a qualifying act of violence, or seeking or obtaining services from a domestic violence shelter, program, or related services organization or agency as a result of a qualifying act of violence.

When taking time off with respect to (c) and (d) above, the employee should give the employer “reasonable advance notice,” unless such notice is not feasible. This new law also removes the twenty-five–employee threshold from provisions for victims of crime and abuse and, except as specified, applies its provisions to employers of one or more persons.

What Is a “Qualifying Act of Violence”?

The term “qualifying act of violence” now replaces the terms “crime” and “crime and abuse,” which were used in existing Labor Code Sections 230 and 230.1. The term “qualifying act of violence” includes domestic violence, sexual assault, stalking, or “[a]n act, conduct, or pattern of conduct that includes any of the following”: (i) “an individual caus[ing] bodily injury or death to another individual”; (ii) “an individual exhibit[ing], draw[ing], brandish[ing], or us[ing] a firearm, or other dangerous weapon, with respect to another individual”; or (iii) “an individual us[ing], or mak[ing] a reasonably perceived or actual threat to use, force against another individual to cause physical injury or death.”

Notably, the above-mentioned acts are considered to be “qualifying acts of violence,” regardless of whether there has been an arrest, prosecution, or conviction.

Expanded Definition of “Family Member”

Under this new law, the term “family member” will follow the FEHA definition, which includes an employee’s “child, parent, grandparent, grandchild, sibling, spouse, or domestic partner … or designated person,” and which is more expansive than the Labor Code’s definition.

Expansion of Reasonable Accommodation Eligibility

AB 2499 expands reasonable accommodation eligibility to include employees who are victims—or whose family members are victims—of “qualifying acts of violence.” Employers must reasonably accommodate these employees to ensure their safety while at work. AB 2499 specifically provides that reasonable accommodations may include the implementation of safety measures, including a “transfer, reassignment, modified schedule, [or] changed work telephone,” among other accommodations. An employer must engage in a timely, good-faith interactive process with an employee to determine effective reasonable accommodations, taking into consideration any “exigent circumstance or danger facing the employee or their family member.”

Regardless, an employer is not required to undertake an action that would constitute an undue hardship on the employer’s business operations, as defined by the FEHA. AB 2499 notes that “an undue hardship also includes an action that would violate an employer’s duty to furnish and maintain a place of employment that is safe and healthful for all employees as required by Section 6400 of the Labor Code.”

If an employee is provided with leave as a reasonable accommodation, and the absence would qualify under the Family and Medical Leave Act (FMLA) or the California Family Rights Act (CFRA), the leave must run concurrently.

Employees May Use Paid Sick Leave

An employee may use vacation/paid time off and/or paid sick leave for time taken off for a purpose specified under this new law.

Omission of Reinstatement and Reimbursement Requirements

Existing law requires reinstatement and reimbursement for discrimination or retaliation, where prescribed. This new law, as it will now appear under the FEHA, omits such reinstatement and reimbursement provisions.

Notice Requirement

Employers must provide notice to employees of their rights under this new law. Notice must be provided “upon hire, to all employees annually, at any time upon request, and any time an employee informs an employer that the employee or the employee’s family member is a victim.”

By January 1, 2025, the Civil Rights Department must develop and post a form that employers may use to comply with the notice requirement.

Ogletree Deakins will continue to monitor developments with respect to this new law and will provide updates on the firm’s Leaves of Absence and California blogs as additional information becomes available. Premium-level subscribers to the Ogletree Deakins Client Portal will also be able to receive more information about the law in our California Paid Sick Leave and California Crime Victim Leave law summaries. For more information on the Client Portal or a Client Portal subscription, please reach out to clientportal@ogletree.com.

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Quick Hits

• The Washington Court of Appeals affirmed a lower court’s decision requiring a hospital to compensate employees for missed meal periods, not only with the time worked but also with an additional thirty minutes of pay per missed break, as a remedy for depriving them of their statutory break rights.
• The ruling emphasizes the importance of employers in Washington adhering to statutory obligations regarding breaks during meal and rest periods, underscoring that the courts take such obligations seriously and they are not considered mere technicalities.

On September 30, 2024, a panel for the Court of Appeals for the State of Washington affirmed a lower court summary judgment ruling that sided with employees, finding that they were owed additional compensation in the amount of thirty minutes of pay for each missed meal period to compensate them for the deprivation of their right to take a break from work during the meal periods, plus prejudgment interest.

In Androckitis v. Virginia Mason Medical Center, the appellate court rejected the hospital’s argument that the employees need only be compensated for the time of their meal period and that additional pay for the missed periods was an improper, judicially created “penalty.”

But the court stated that it is “well-established law” that the Industrial Welfare Act provides employees “a right to the respite of a meal and rest period, an implied cause of action to enforce that right, and a remedy to compensate them for the loss of the statutorily granted opportunity to have respite from work.”

The decision is significant for employers because it clarifies that Washington courts will take employers’ statutory obligations to provide meal and rest periods seriously and will not treat failure to provide such periods as mere technical violations of labor law.

Background

The case involved a class action of Virginia Mason Medical Center employees who alleged the hospital violated the Washington Industrial Welfare Act, which empowers the Washington Department of Labor and Industries to protect employees from unhealthy labor conditions, and the Minimum Wage Act.

The employees alleged that even though the hospital had mechanisms for employees to report when they worked through meal periods and receive pay for that time worked, employees were not adequately compensated for the loss of their right to take a meal period.

The trial court granted the employees’ summary judgment, ruling that Virginia Mason owes them an additional thirty minutes of compensation for each missed meal period and that the hospital’s failure to properly compensate employees from the outset was willful, entitling them to “double damages.” The parties had agreed to a damages award of more than $3.3 million to forgo a trial on damages.

Right to a Meal Period and Penalty Pay

Virginia Mason had argued that it should not be required to make additional or “penalty” payments to employees who work through meal periods beyond paying them for the time they worked. The hospital pointed out that the Minimum Wage Act only requires employees to be paid for the hours worked.

However, the court of appeals rejected that argument, stating it is “predicated on the erroneous notion that the right to the respite of a meal period has no value.” The court explained that the Industrial Welfare Act is not duplicative of the Minimum Wage Act and addresses working conditions beyond the minimum wage.

The court of appeals stated:

Indeed, if an employer could have a policy of providing an employee with an unpaid meal period, require an employee to work during that unpaid meal period, pay that employee for their hours worked, and not provide that employee with another meal period, then, on balance, the employer would receive 30 minutes of additional labor from the employee and the employee would not have received 30 minutes of respite from work—frustrating the legislature’s clear directive in the welfare act to protect workers against unhealthy conditions of labor. We cannot adopt a proposed interpretation that would thwart the purpose of such remedial employee protection measures.

The court of appeals further found the trial court did not abuse its discretion in finding that pay for an additional thirty minutes of work was a remedy as it “reflects that the trial court measured the remedy according to the value attributed by Virginia Mason to the wages for that amount of work by the plaintiffs.”

Finally, Virginia Mason had argued that summary judgment for the employees was improper because there were factual questions over whether employees waived their right to take meal periods. However, the court of appeals ruled that the hospital failed to meet its burden to avoid summary judgment because “[i]t did not present the trial court with specific instances in which its employees had indicated that they had waived their right to a meal period.”

Key Takeaways

The court of appeals’ decision clarifies that employer obligations to provide breaks from work for meal and rest periods are serious, as the court emphasized that these are not merely technical requirements. The decision suggests that there are few, if any, justifications otherwise, including being short-staffed or busy. The ruling comes after a Washington trial court held another hospital liable for nearly $100 million in damages for time-clock rounding and meal period violations.

The ruling further indicates that simply paying employees for the time worked is insufficient if meal periods are missed or compromised. According to the court, it was reasonable to assess additional damages equal to the pay for a meal period as a penalty for each missed meal period. Employers may need to promptly compensate employees to avoid the assessment of prejudgment interest payments and double damages for meal and rest period violations unless the error is genuinely isolated or inadvertent.

Finally, the decision shows that employers have the burden of proof to avoid summary judgment, and double damages are considerable. The ruling suggests that employers must show that employees, in every case, waived every single meal period not taken or that each missed meal period was truly an inadvertent or isolated mistake.

Employers in Washington state may want to review their policies to ensure that employees actually take breaks from work during required meal and rest periods.

Ogletree Deakins’ Seattle office will continue to monitor developments and will provide updates on the Healthcare, Wage and Hour, and Washington blogs.

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Port Workers’ Strike Suspended. Workers represented by the International Longshoremen’s Association (ILA) paused a brief three-day strike this week after reaching a tentative wage agreement with the group representing shippers and employers at East Coast and Gulf Coast ports. The tentative agreement reportedly will provide workers a 62 percent wage increase over six years. The ILA was demanding a 77 percent increase over seven years and previously rejected an offer from the ports that would have increased worker pay by 50 percent and tripled contributions to employee retirement plans. With the suspension of the strike, work at the ports will resume under provisions of the recently expired contract through January 15, 2025, while the parties negotiate over outstanding issues. These outstanding issues involve potential port automation and technology, which have been more readily embraced not just around the world, but also at ports in Los Angeles and Long Beach, California.

FTC to DOL, NLRB, and DOJ: It’s Not You, It’s Me. Late last week, the Federal Trade Commission (FTC) announced that it would withdraw from the August 2024 Memorandum of Understanding it had entered into with the National Labor Relations Board (NLRB) general counsel, the U.S. Department of Labor (DOL), and the U.S. Department of Justice (DOJ) Antitrust Division. The memorandum is intended to facilitate agency cooperation relating to labor issues in merger investigations. The FTC did not provide a reason for its withdrawal, but stated, “The agency will continue to closely scrutinize all issues related to mergers, including potential impacts on labor, in accordance with its merger guidelines.”

Republican Senators Introduce Bill to Curb “Parole in Place.” More than a dozen Republican senators have introduced the Visa Integrity Preservation Act. The bill would amend the Immigration and Nationality Act to clarify that undocumented noncitizens must depart the United States and proceed through the in-person consular interview process to apply for employment authorization and permanent residency. The bill is intended to counter President Biden’s “parole in place” initiative, which allows certain individuals to obtain lawful parolee status and employment authorization without leaving the country if certain eligibility criteria are met.

DOL Releases AI and Inclusive Hiring Framework. The DOL and the Partnership on Employment & Accessible Technology (PEAT), an outside organization funded by the DOL’s Office of Disability Employment Policy, have released the “Artificial Intelligence (AI) & Inclusive Hiring Framework.” A DOL press release describes the framework as “a new tool designed to support the inclusive use of artificial intelligence in employers’ hiring technology and increase benefits to disabled job seekers.” The framework, which does not have the force of law, lays out ten focus areas and related practices: (1) “Identify Employment and Accessibility Legal Requirements”; (2) “Establish Staff Roles, Responsibilities, and Training”; (3) “Inventory Technology and Classify the Technology”; (4) “Work With Responsible AI Vendors”; (5) “Assess Possible Positive and Negative Impacts”; (6) “Provide Accommodations”; (7) “Use Explainable AI and Provide Notices”; (8) “Ensure Effective Human Oversight”; (9) “Manage Incidents and Appeals”; and (10) “Monitor Regularly.” Each focus area is subdivided into various topics, goals, considerations, examples, and the like, which can be hard for employers to follow. Ogletree Deakins’ Technology Practice Group will continue to help employers navigate and implement ongoing policy developments relating to the implementation of new technologies in the workplace.

Marshall Joins SCOTUS. This week in 1967, Thurgood Marshall (1908–1993) was sworn in as an associate justice of the Supreme Court of the United States. After graduating first in his class at Howard University School of Law in 1933, Marshall joined the National Association for the Advancement of Colored People (NAACP). From 1940 to 1961, Marshall led the NAACP’s Legal Defense and Educational Fund. During that time, Marshall famously argued Brown v. Board of Education of Topeka, in which the Court unanimously ruled that public school segregation was unconstitutional. In 1961, President John F. Kennedy appointed Marshall to the U.S. Court of Appeals for the Second Circuit, and in 1965, President Lyndon B. Johnson appointed Marshall to be solicitor general of the United States. As solicitor general, Marshall successfully argued in Harper v. Virginia Board of Elections that poll taxes are unconstitutional. President Johnson quickly appointed Marshall to the Supreme Court, where he served until his retirement in 1991.

Quick Hits

• It is anticipated that Governor Phil Murphy will soon sign into law legislation requiring certain employers to disclose compensation and benefits in job postings and provide notice of promotion opportunities.
• Noncompliance with the act may result in civil penalties of $300 for a first violation and $600 for subsequent violations.
• S2310 will “take effect on the first day of the seventh month next following the date of enactment.”

Covered Employers

S2310 applies only to those employers that have “10 or more employees over 20 calendar weeks” and “do[] business, employ[] persons, or take[] applications for employment” in New Jersey.

Temporary help service firms and consulting firms are also covered under S2310 and are similarly required to provide to an applicant for temporary employment the same “pay and benefit information” required of other types of employers at the time of interview or hire for a specific job opening. However, such firms are not required to provide this information “on job postings that are posted for the purpose of identifying qualified applicants for potential future job openings and not for existing job openings.”

Disclosure of Pay and Benefits Information

S2310 requires employers to disclose in each “posting for new jobs and transfer opportunities that are advertised by the employer either externally or internally the hourly wage or salary, or a range of the hourly wage or salary” along with a “general description of benefits and other compensation programs for which the employee would be eligible.” S2310 does not, however, prohibit an employer from “increasing the wages, benefits, and compensation identified in the job opening posting at the time of making an offer for employment to an applicant.”

Notice Requirements

With respect to promotion opportunities, S2310 requires employers to make “reasonable efforts” to “announce, post, or otherwise make known” any promotion opportunity advertised either internally within the employer or externally “to all current employees in the affected department or departments of the employer’s business.” S2310 defines the term “promotion” as a “change in job title and an increase in compensation.”

Notably, however, any promotion for a current employer that is “awarded on the basis of years of experience or performance” would not be subject to this notice requirement. The proposed law also carves out promotion decisions made on an “emergent basis due to an unforeseen event,” but unfortunately does not define these terms nor identify the circumstances under which this exception would apply.

Effective Date

S2310 provides that it will take effect exactly seven months after being signed into law. It is anticipated that Governor Murphy will soon sign the bill, especially as there is a growing trend across the country in favor of pay transparency. Employers that have not yet already begun assigning estimated pay ranges and benefits information for available positions may want to begin doing so soon.

Noncompliance Penalties

Employers that violate the proposed law’s requirements will be subject to civil penalties payable to the commissioner of labor and workforce development in amounts not to exceed $300 for a first violation and not to exceed $600 for each subsequent violation. Notably, while each violation of the law will be considered a “separate violation,” S2310 makes clear that employers will be fined only once for each promotion, job listing, or transfer opportunity that fails to comply with the requirements, even if that promotion, job listing, or transfer opportunity is listed or posted on multiple forums.

Importantly, S2310 does not provide for a private right of action for individuals who claim to be aggrieved by an employer’s failure to comply with the proposed law.

Conclusion

Businesses with employees in New Jersey may want to pay particular attention to each of their job postings to ensure that sufficient information is being provided about anticipated compensation and benefits available for each advertised position.

Ogletree Deakins’ Morristown office will continue monitoring developments with respect to S2310 and its impact on the workplace and will provide updates on the New Jersey and Pay Equity blogs as additional information becomes available.

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Quick Hits

• The bill would have required developers of large AI models made available to the public to take specific steps to ensure that they did not cause critical harm. It would have imposed employment protections for developers’ employees who blew the whistle about potential dangers.
• The legislation was one of several AI bills presented to the governor during the year’s regular legislative session as California looks to be a leader in developing and regulating this emerging technology.
• It is likely that California will try again to enact AI safety legislation amid continuing concerns over the fast-growing technology.

On September 29, 2024, Governor Newsom vetoed Senate Bill (SB) No. 1047, known as the “Safe and Secure Innovation for Frontier Artificial Intelligence Models Act.” In a veto message, Governor Newsom warned that though the bill sought to address some real concerns, it went too far in its restrictions.

“While well-intentioned, SB 1047 does not take into account whether an Al system is deployed in high-risk environments, involves critical decision-making[,] or the use of sensitive data,” Governor Newsom stated in the veto message. “Instead, the bill applies stringent standards to even the most basic functions—so long as a large system deploys it. I do not believe this is the best approach to protecting the public from real threats posed by the technology.”

SB 1047, which California lawmakers passed in August 2024, would have implemented wide-ranging safety requirements for developing specific large AI models with the goal of preventing technology available to the public from being misappropriated to cause “critical harm,” such as to make weapons of mass destruction.

Governor Newsom, however, stated that SB 1047’s focus on regulating large and expensive AI models and their developers “could give the public a false sense of security about controlling this fast-moving technology.”

“Smaller, specialized models may emerge as equally or even more dangerous than the models targeted by SB 1047—at the potential expense of curtailing the very innovation that fuels advancement in favor of the public good,” his veto message continued.

SB 1047’s Proposed Safety Protocols and Whistleblower Protections

The groundbreaking legislation would have imposed one of the strictest state regulatory regimes on the developers of large AI models. It would have made California perhaps the first jurisdiction to implement job protections for those working on AI models who blew the whistle on potential dangers related to the technology.

Specifically, SB 1047 would have required developers of certain covered large AI models and their derivatives to implement specific safety measures, including:

• reasonable cybersecurity protections “to prevent unauthorized access to, misuse of, or unsafe post-training modifications” of the covered models;
• a mechanism to “promptly enact a full shutdown” of a model; and
• “a written and separate safety and security protocol.”

In addition, SB 1047 would have prohibited developers of large AI models from preventing employees, through terms and conditions of employment, “from disclosing information to the Attorney General or the Labor Commissioner” or from retaliating against employees who reported to the authorities their reasonable belief that a developer was not following the bill’s safety protocols or other laws or that an AI model “pose[d] an unreasonable risk of causing or materially enabling critical harm.”

Such “critical harm” would have included the “creation or use of a chemical, biological, radiological, or nuclear weapon in a manner that results in mass casualties,” “cyberattacks on critical infrastructure” causing mass casualties of at least $500 million in damage, or “[o]ther grave harms to public safety and security that are of comparable severity.”

Under SB 1047, developers would also have been required to provide notice to their employees of their rights and to establish internal reporting processes for employees and subcontractors to anonymously disclose information to the developers if they believed “in good faith that the information indicate[d] that the developer[s] ha[d] violated” the bill’s safety provisions.

Potential to Stifle Innovation

Governor Newsom’s veto came after he had signed into law seventeen recently passed AI-related bills addressing issues such as deepfakes, AI watermarking, the protection of children and workers, and AI-generated misinformation. The same day that Governor Newsom vetoed SB 1047, he announced new initiatives to advance safe and responsible AI that will focus on “developing an empirical, science-based trajectory analysis of frontier models and their capabilities and attendant risks.”

But California Senator Scott Wiener, SB 1047’s primary sponsor, posted a statement on social media calling the governor’s veto “a setback” for those who believe government oversight of AI is necessary.

“This veto leaves us with the troubling reality that companies aiming to create an extremely powerful technology face no binding restrictions from U.S. policymakers,” Wiener said in the statement.

SB 1047 faced stiff opposition from the business community, which had raised concerns that the legislation would stifle innovation in California and cause developers to leave the state without providing a clear benefit for the public or a sound evidentiary reason for the restrictions.

Opponents of the bill also included U.S. Representative Nancy Pelosi (D-CA), who issued a statement in opposition to the bill, and eight other members of California’s congressional delegation who signed a letter arguing that the bill “create[d] unnecessary risks for California’s economy with very little public safety benefit.” On the other side, more than one hundred Hollywood artists signed an open letter urging Governor Newsom to sign the bill into law.

Next Steps

While AI technology can potentially increase efficiency and improve decision-making, the unchecked exponential growth of AI may require some smart and practical regulation that can respond to the ever-changing landscape. Principles that appear in the AI laws of other jurisdictions include notice, consent, transparency, explainability, security, bias elimination, and auditing.

There remains a small chance the California Legislature will override Newsom’s veto of SB 1047, as the Senate has taken it under consideration. Regardless, California lawmakers are likely to take another stab at AI safety regulation. Moreover, the California Civil Rights Department is developing final regulations addressing the potential for employment discrimination in the use of AI and automated decision-making systems.

Ogletree Deakins will continue to monitor developments and will provide updates on the California, Ethics / Whistleblower, and Technology blogs.

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Quick Hits

• A Supreme Court of Korea opinion provides employers with useful insights into just cause for dismissing an employee based on poor performance.
• The court found that a former employee, who had been with the employer for more than twenty-five years, had received poor performance reviews for more than ten years before being dismissed, and had failed to meet the requirements of a performance improvement plan seven out of eight times.
• Employers in South Korea must have just cause to dismiss an employee, and therefore may want to err on the side of caution when considering unilateral terminations of employment based on poor performance.

The Labor Standards Act of Korea mandates that there be just cause for dismissing an employee. This means that employers may not dismiss employees “at will,” which is often the case in countries like the United States. Courts in South Korea have defined “just cause” as a cause that is attributable to the employee that renders continued employment impossible from a societal perspective.

Many court cases in South Korea have attempted to determine what it means for an employment relationship to be deemed “impossible to continue from a societal perspective.” Unambiguous factors establishing just cause include conviction of a serious crime, stealing, and falsifying a resume. Where performance is the cause, however, the proof requirements are less clear.

In general practice, Korean courts do not find inadequate performance, in and of itself, to be a sufficient cause for an employee’s dismissal. Yet, they have established that poor performance may constitute just cause for termination of employment.

Overall, the legal standard for performance-based dismissal in South Korea remains difficult to meet. The employer wishing to unilaterally dismiss an employee—whether the employment is permanent or temporary—for poor performance will need to exert substantial effort and spend significant time to sufficiently satisfy the standard.

When making such determinations, Korean courts look to whether the employer can demonstrate the following factors:

1. The employee at issue has, in fact, performed poorly when compared to other employees, and the evaluation used in the decision to dismiss the employee was fair and objective.

Elements include the following:

• well-established performance evaluation criteria that is transparent and accessible; and
• the fairness of the performance review process. (Were multiple parties involved in the evaluation process? Was the employee given the opportunity to provide feedback?)

2. The employer has made substantial efforts to coach and guide the underperforming employee. Options include:

• adjusting targets so they become realistic goals for the employee to achieve; and
• reassigning the employee to a different position—with appropriate training. (This involves receiving feedback from the employee on placement and a careful assessment of the employee’s strengths and weaknesses.)

The courts examine whether the employer has fully explored these options, as opposed to, for example, simply reassigning the employee without consultation or temporary adjustment of targets. The employer must make a consistent effort to explore alternatives to dismissal. Commonly, employers utilize performance improvement plans to meet this standard.

Performance Improvement Plans

These plans are also subject to scrutiny by the courts. Employees must be given several warnings with feedback as part of the performance improvement plan. Employers are expected to provide sufficient time for an employee to improve performance—typically, nine to twelve months. An employer can dismiss an underperforming employee only if the employer can successfully demonstrate that, despite its efforts, the employee has failed to show any sign of improvement.

The Supreme Court of Korea’s Analysis

The Supreme Court of Korea recognized that no bright-line standards and criteria existed to establish just cause for performance-based employment terminations. Nevertheless, the court determined that the employer had met the requirements for a just-cause dismissal.

The court cited several reasons for its decision.

• Length of employment/level of expertise: The employee had worked for the company for twenty-five years and held a high-level managerial position. Based on this factor, the court ruled that a certain level of performance and expertise could be expected.

• Evaluations: The employee’s performance had been evaluated for more than ten years, from 2007 through 2017. Out of the five grades possible—S, A, B, C, and D, in descending order, from best to worst—the employee received Grade D every year. The court found that this showed that the employee had consistently performed poorly compared to other employees for a long period of time.

• Performance improvement plan: The employee had been provided with a performance improvement plan for three years. Compared to all other employees who were placed on similar plans, only this employee had failed to satisfy the requirements seven out of eight times. The court found that the employer had demonstrably given sufficient time and opportunity for the employee to improve work performance.

Key Takeaways

While this ruling may indicate that courts in South Korea are becoming more flexible regarding unilateral performance-based terminations of employment, it also demonstrates and reaffirms the high standards for such terminations of employment. Employers may want to err on the side of caution when considering unilateral terminations of employment based on poor performance because of the multiple requirements that must be met.

Ogletree Deakins’ Cross-Border Practice Group will continue to monitor developments and will provide updates on the Cross-Border blog as additional information becomes available.

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Quick Hits

• Private and public employers with fifteen or more workers must accommodate reasonable requests from workers to observe religious holidays (pursuant to federal law; however, state law coverage varies and might only require one or more workers).
• Employers may avoid confusion by clearly stating leave policies and company holidays in the employee handbook.
• Employers can use online systems or software to detect patterns in approving or denying requests for leave on religious holidays.

With many religious holidays taking place in the next two months, employers are likely to see many requests for time off for religious celebrations.

Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against workers for practicing their religion unless the worker’s religious practice cannot reasonably be accommodated without an undue hardship to the business. If a manager approves holiday leave requests from Christian employees, but rejects holiday leave requests from Muslim or Jewish employees, that could raise the risk of religious discrimination lawsuits. Additionally, some states, including California, also prohibit religious discrimination and require reasonable accommodation.

In June 2023, in Groff v. DeJoy, the Supreme Court of the United States ruled that employers cannot legally deny a valid religious accommodation request, unless they can show a substantial burden from a proposed religious accommodation. In Groff, an evangelical Christian postal worker sued the U.S. Postal Service for failing to accommodate his request to not work on Sundays for religious reasons. The Supreme Court held in favor of the postal worker and remanded the case to lower courts.

This decision raised the bar for employers to invoke an undue hardship defense. A de minimis cost is no longer enough to demonstrate an undue burden. If an employee holds a sincere religious belief or practice that conflicts with a workplace policy or staffing schedule, then the employer must engage in an interactive process to see whether an accommodation can be made without substantially interfering with its overall business operations.

Some workplaces, including in the healthcare, hospitality, and transportation industries, require staffing 24/7 every day. In that situation, it may be possible to coordinate schedules so that leave requests can be honored for religious holidays. For example, non-Jewish employees may agree to work during Jewish holidays, and non-Muslim workers may agree to work during Muslim holidays. And, then, those employees might cover gaps in staffing caused by time off for Christian holidays. Compliance with the religious accommodation laws contemplates this type of interactive process and teamwork to find an appropriate solution.

If this type of shift-swapping is not possible or practical, it may be helpful for an employer to document why that is the case.

Next Steps

Employers may wish to review their religious accommodation request procedures, leave policies, scheduling process, and related practices to ensure that managers do not engage in religious discrimination when they approve or deny leave requests. In addition, employers may wish to train managers to apply all of the time off rules consistently.

These holidays are upcoming:

• The Jewish holidays Rosh Hashanah and Yom Kippur fall on October 3, 2024, and October 12, 2024, respectively. Hanukkah will be celebrated December 25 through January 2, 2025.
• The Hindu holiday Diwali falls on November 4, 2024.
• The Buddhist holiday Bodhi Day falls on December 8, 2024.
• The Christian holiday Christmas Day falls on December 25, 2024.

Ogletree Deakins will continue to monitor developments and will provide updates on the Leaves of Absence blog as new information becomes available.

James M. Paul is a shareholder in Ogletree Deakins’ St. Louis office.

Charles L. Thompson, IV, is a shareholder in Ogletree Deakins’ San Francisco office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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Quick Hits

• Governor Newsom recently signed into law legislation directing the California Occupational Safety and Health Standards Board, by March 1, 2027, to amend existing standards to require hospitals to implement weapons detection screening policies.
• The standards will also require hospitals to implement policies addressing personnel education and training, alternative search and screening protocols, response protocols for detected weapons, and public notification.

Newly enacted Assembly Bill (AB) No. 2975 requires the California Occupational Safety and Health Standards Board to develop standards including several critical requirements aimed at bolstering security in hospitals.

Weapons Detection Screening Policies

By March 1, 2027, the Cal/OSHA Standards Board must amend existing standards to include a requirement that hospitals implement weapons detection screening policies. These policies will mandate the use of weapons detection devices that automatically screen individuals at specific hospital entrances.

Personnel Education and Training

Hospitals must assign “appropriate personnel, other than a health care provider,” who meet specified training standards to manage the weapons detection process.

Alternative Search and Screening Protocols

Hospitals must have “reasonable protocols for alternative search and screening for patients, family, or visitors who refuse to undergo weapons detection device screening.”

Response Protocols for Detected Weapons

Hospitals will be required to “adopt reasonable protocols” for responding when a dangerous weapon is detected. These protocols must be clearly defined and actionable.

Public Notification

Hospitals will be required to post notices in conspicuous locations near “public entrances where weapons detection devices are utilized.” These notices must inform the public that a specific hospital “conducts screenings for weapons upon entry but that no person shall be refused medical care,” in accordance with federal law.

Next Steps

Now that AB 2975 has been signed into law, California’s healthcare employers can participate in the rulemaking process at the Cal/OSHA Standards Board.

Ogletree Deakins’ Workplace Violence Prevention Practice Group will continue to monitor developments and will provide updates on the California, Healthcare, and Workplace Safety and Health blogs as additional information becomes available.

For more information on this and similar state laws around the United States, the Ogletree Deakins Client Portal has launched a new law summary on Workplace Violence Prevention. (Full law summaries and templates are available for Premium-level subscribers; Snapshots and Updates, which clients can use to create fifty-state tables, are available for all registered clients.) For more information on the Client Portal or a Client Portal subscription, please sign up here or reach out to clientportal@ogletree.com.

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