Employers and employees are often caught off guard by the devastation and uncertainty created by natural disasters.  When emergencies arise from such wildfires, global pandemics, hurricanes, earthquakes, tornadoes, and flooding, employers are often faced with employment-related concerns, and it is imperative for employers to be as prepared as possible in the event an emergency arises.  This article touches on some of the most important concerns that employers should keep in mind if ever faced with a natural or other disaster, including (but not limited to) wage and hour implications, potential payroll relays, leaves of absence, notifying employees of mass layoffs, unemployment benefits, and safety and retaliation concerns, and modes of communication to employees.

Wage & hour implications:

• Under the FLSA, non-exempt workers must be paid only for the time they work, and therefore, employers need not compensate non-exempt employees who are not working because of an emergency.  Note that it generally does not matter whether the absence is based on the employer’s decision to close or the employee’s decision to stay at home or evacuate.  It is also important to note that non-exempt employees must be paid for performing any work remotely, even if the employee did not have express permission to work from home.  Accordingly, employers should ensure that they have a clear and enforceable time and attendance policy that, among other things, requires non-exempt employees to accurately record all time worked.
• On the other hand, when an employer shuts down its operations because of adverse weather or other disaster for less than a full workweek, exempt employees must be paid their full salary.  This rule also applies if exempt employees work only part of a day.  Keep in mind that if an employer deducts from the employee’s salary in such situations, it risks losing the exemption applicable to that employee.  Also note that, generally speaking, exempt employees may be required to use accrued leave or vacation time for their absences, including if the worksite is closed, and employers are able to direct exempt employees to take paid time off for the closure, pursuant to the employer’s established vacation or leave policy.  Employers should keep this in mind when updating and refreshing its vacation and leave policies.

Potential Payroll Delays:

• Sometimes a natural or other disaster can cause a delay in an employer’s processing of employees’ wage payments.  New York employers are required to give notice to employees for changes in their pay rate and/or payday.  Notice of any delays should be made in writing as soon as practicable. 
• This is often an unintentional result of a natural of other disaster, but employers should ensure that they keep open and ongoing communications with its employees about wages, scheduling, and related matters.

Leaves of Absence:

• Employees may need to take leave from work to deal with certain unforeseen circumstances that a natural disaster could cause.  Generally speaking, the FMLA does not, in itself, require employers to give employees time off to attend to personal matters arising out of a natural disaster, but, employees who have suffered a serious injury or illness resulting from the disaster, or who have a family member who did, may be entitled to leave under the federal Family and Medical Leave Act (FMLA).

Notifying Employees of Mass Layoffs:

• Employers that decide to close a facility or implement a mass layoff due to the effects of a natural disaster must evaluate whether a notice is required under the federal Worker Adjustment and Retraining Notification Act (WARN).
• The WARN Act requires a covered employer, i.e., 100 or more employees, to give 60 days’ notice prior to a mass layoff.  A mass layoff occurs when either of the following suffers a job loss: (a) 500 or more full-time employees at a facility; or (b) 50 or more full-time employees at a facility constituting at least 33% of the workforce.  A job loss includes a layoff of six months or more but does not include resignations or terminations for cause.
• When required, WARN notice must be provided to affected nonunion employees, the representatives of affected unionized employees, the state’s dislocated worker unit, and the local government where the closing or layoff is to occur.
• Note that a natural or other disaster is not considered a justifiable delay in providing WARN notice, and if necessary, they must give “as much notice as is practicable” and must state why they were unable to give notice earlier. 

Unemployment Benefits:

• Employees who are displaced from their positions due to a natural or other disaster may be eligible for unemployment compensation from the relevant state agency, and if ineligible for state assistance, the employee may be eligible for such Disaster Unemployment Assistance (DUA).

Safety & Retaliation Concerns:

• Under the federal Occupational Health and Safety Act, employers have a legal duty at all times to provide employees with a safe workplace, free of known health and safety hazards, and depending on the business, additional industry-specific regulations may apply.  Employers should conduct a workplace safety analysis to consider any and all post-disaster recovery issues.  Note that OSHA publishes fact sheets on disaster recovery which addresses topics such as flood and cleanup hazards, fungi, falls, chainsaws, asbestos, and electrical wires.

Communicating to Employees:

• Employers should establish a command center to serve as the central source for decision-making and communication and should also consider having a second alternative location in the case of a widespread event if possible.
• Employers should ensure that employee contact information is up-to-date and that employees know how to get information from the employer in an emergency.  This could include distributing relevant information in advance of inclement weather or other catastrophic event for employees to store at home, such as information about company policies and general preparedness, and ensure that there are sufficient modes of satisfaction for contact, such as an email or text alert system.

If you have any questions about the subject of this article and its implications for your business, please contact Forework.

In Separ v. Cnty of Nassau, the U.S. District Court in the Eastern District of New York held that a settlement agreement could not take effect without a signed confidentiality and non-disparagement preference acknowledgement.  The case dealt with an employer and employee who had entered into a settlement agreement to resolve the plaintiff employee’s allegations of discrimination and retaliation.  The settlement agreement contained an “effective date” clause which stated that the settlement agreement would not take effect until it was executed by the parties, and also contained a “review and revocation” clause that provided the employee the required consideration and revocation periods under New York General Obligations Law § 5-336 and N.Y. CPLR § 5003-B.  Specifically, Section 5-336 of the NYGOL prohibits employers from including non-disclosure language in a settlement agreement unless the “condition of confidentiality is the complainant’s preference” and the complainant has 21 days to consider the agreement and 7 days to revoke.  N.Y. C.P.L.R. § 5003-B prohibits a condition of confidentiality in a settlement agreement reached in response to a filed complaint unless such a condition is the plaintiff’s preference.  Notably, the statutes provide a mechanism for the complainant to acknowledge their preference for confidentiality via a separate acknowledgment form.

The parties in Separ agreed on the terms of the settlement, and the employee executed the settlement agreement within the 21-day consideration period.  However, the employee refused to sign the confidentiality and non-disparagement preference acknowledgement form, which was provided via a separate acknowledgment form, per CPLR § 5003-B.  The employer filed a motion to enforce the settlement agreement, arguing that the confidentiality and non-disparagement preference acknowledgement form was “separate and apart from the settlement agreement.”  However, the court rejected this argument and instead held this is a “material component of the broader settlement agreement,” and therefore the settlement agreement could not take effect without the signed confidentiality and non-disparagement preference acknowledgement.  This decision highlights the fact that even intentional and near-perfect adherence to both NYGOL § 5-336 and CPLR § 5003-B may still render a settlement agreement unenforceable if the employee refuses to sign a confidentiality and non-disparagement acknowledgement.  Employers should ensure that they review their settlement agreement templates to ensure that each and every “material component” of the entire settlement agreement is fully executed to ensure enforceability. If you have any questions about the subject of this article and its implications for your business, please contact Forework.

On January 9, New Jersey Attorney General Matthew J. Platkin and the Division on Civil Rights issued guidance stating that the New Jersey Law Against Discrimination (LAD) applies to AI-powered decision-making in hiring and beyond. Thus, AI-driven bias constitutes illegal discrimination.

New Jersey also launched a Civil Rights Innovation Lab to monitor AI compliance, enforce violations, and educate businesses on AI risks. New Jersey employers using AI-driven tools must now proactively ensure these systems don’t create discriminatory outcomes. 

AI Bias is Illegal under the LAD

 The LAD’s broad purpose is to eliminate discrimination, and it doesn’t distinguish between the mechanisms used to discriminate. “Automated decision-making tool” refers to any technological tool, including but not limited to, a software tool, system, or process that is used to automate all or part of the human decision-making process. The guidance makes clear that under the LAD, discrimination is prohibited regardless of whether it is caused by automated decision-making tools or human actions. If an AI system results in biased outcomes, the employer will be held responsible.

The guidance emphasizes that employers cannot escape liability by outsourcing AI hiring, screening, or evaluation tools. Thus, employers cannot point to third-party vendors if a bad outcome occurs and a lawsuit follows. If an AI tool used by an employer leads to disparate impact or direct discrimination, the guidance says that the employer is still legally responsible.  

Civil Rights Innovation Lab

The guidance announced the creation of New Jersey’s Civil Rights Innovation Lab. This new government agency will:

• Develop AI tools to detect discrimination in hiring, housing, and credit.
• Enhance enforcement of AI-related discrimination complaints.
• Offer compliance training to businesses on AI risk management.

Evolving Regulatory Landscape

New Jersey’s guidance is one of many states issuing increased regulation of AI in the context of employment decisions.

• New York City’s Local Law 144 was the nation’s first law to create obligations for employers when AI is used for employment purposes – including obligatory bias audits.
• Colorado was the first state to pass a law requiring AI bias prevention measures.
• Illinois became the second state to pass AI workplace legislation that will require employers to provide notice to applicants and workers if they use AI for hiring, discipline, discharge, or other workplace-related purposes.
• Several other states– including Texas and Connecticut – have pending AI bias legislation for 2025.

Next Steps for Employers

Employers can take steps to identify and eliminate bias in its automated decision-making tools, such as:

• implementing quality control measures for any data used in designing, training, and deploying the tool;
• conducting impact assessments;
• having pre-and post-deployment bias audits performed by independent parties;
• providing notice of their use of an automated decision making tool;
• involving people impacted by their use of a tool in the development of the tool; and
• purposely attacking the tools to search for flaws;
• train HR teams on AI compliance; and
• monitor enforcement trends in anticipation of regulatory shifts.

If you have any questions regarding automated decision-making tools in the workplace, please feel free to reach out to any member of Forework.

On January 20, 2025, President Trump enacted several executive orders to advance his administration’s immigration policy priorities. These actions include: (a) a declaration of a national emergency at the southern border, (b) facilitating the allocation of federal funds for enhanced border security and (c) deploying armed forces to the region. Additionally, President Trump announced plans for a large-scale deportation initiative targeting undocumented immigrants, described as “the largest domestic deportation operation in American history.”

On January 21, 2025, Acting DHS Secretary Benjamine Huffman issued a directive overturning the previous administration’s policy of limiting immigration enforcement near “protected areas.” This change grants ICE agents broader authority to conduct enforcement activities in sensitive locations, including hospitals, schools, and religious institutions.  Indeed, a Crain’s article last week discussed how New York City area hospitals are preparing for ICE raids. 

Understanding ICE Raids

ICE raids typically aim to detain undocumented employees working for U.S. employers. These operations are often targeted, focusing on specific individuals or industries known to employ large numbers of undocumented workers, such as hospitality, construction, agriculture, cleaning services, and restaurants.

ICE agents may enter public areas of a business, such as lobbies or parking lots, without prior notice. However, access to non-public areas requires either a judicial search warrant or explicit consent from the employer. While employers are obligated to cooperate with ICE investigations, they must also ensure compliance with privacy laws and avoid inadvertently violating employee rights during such operations.

Preparing for Potential ICE Raids

Employers can take proactive measures to minimize risks and ensure compliance with immigration laws. Consider the following steps:

1. Designate a Point of Contact: Assign a representative from the Human Resources or Legal Department to manage ICE-related matters.
2. Develop Protocols: Establish clear procedures for handling ICE raids, including training for designated representatives on managing judicial search warrants, communicating with agents, and addressing employee concerns.
3. Front Desk Preparedness: Equip reception staff or other first points of contact with guidelines on who to notify and how to respond to ICE agents.
4. Internal Audits:
   • Review and update Form I-9 records for all active employees.
   • Correct any errors on I-9s promptly.
   • Retain I-9 records for the legally required period for terminated employees.
5. E-Verify Compliance:
   • Audit E-Verify cases for accuracy.
   • Address any missing cases and ensure mandatory posters are displayed.
6. Document Organization:
   • Align immigration petition documents with personnel files, ensuring consistency in details such as compensation and work locations.
   • Separate personnel, I-9, and immigration files, removing any unnecessary or sensitive personal data while adhering to state laws governing personnel records.
7. Vendor and Contractor Reviews:
   • Confirm that contracts with staffing agencies or vendors include clauses ensuring compliance with I-9 and immigration laws.
8. Managerial Awareness:
   • Instruct supervisors not to provide legal advice to employees or customers regarding immigration issues. Instead, provide informational materials from reputable organizations like the National Immigration Law Center.
9. Media Preparedness:
   • Draft a statement for use in the event of an ICE raid to address concerns from employees and the media.
10. Legal Support:

• Consult with an immigration attorney to develop protocols and provide training for key personnel.

Broader Implications for Employers

The administration’s enforcement efforts may initially target undocumented immigrants with criminal records or those at the southern border. However, additional executive actions could affect individuals under programs such as Deferred Action for Childhood Arrivals (DACA), Temporary Protected Status (TPS), and humanitarian parole programs. Employers should also prepare for potential DHS site visits to audit immigration-related files.

Organizations serving the public, such as hospitals, schools, and religious entities, are generally not required to disclose the immigration status of individuals unless mandated by a lawful warrant. However, employers must avoid actions that could be interpreted as obstructing government operations.

By taking these proactive steps, employers can better navigate the challenges posed by heightened immigration enforcement while maintaining compliance and protecting their workforce.

In the absence of federal regulations, several states have passed or are considering legislation aimed at mitigating the risk of an employer’s use of AI systems resulting in algorithmic discrimination.

“Algorithmic discrimination” is defined as the use of an artificial intelligence (AI) system that results in differential treatment or impact disfavoring an individual based on protected characteristics (e.g., age, color, ethnicity, disability, national origin, race, religion, veteran status, sex, etc.). AI systems have the potential to create discriminatory results in decision making.  And such discrimination is particularly harmful in the context of employers that use AI systems to make employment decisions.

Enacted and Proposed Legislation

While President Biden released an executive order on the development and use of AI, there is no comprehensive federal regulation regarding the use of AI systems, especially in the context of employment decision making. Several states have enacted or proposed legislations to impose a duty of reasonable care on employers to mitigate and assess the risk of algorithmic discrimination caused by their use of AI systems.

• Colorado: Senate Bill 24-205: The Colorado Artificial Intelligence Act will take effect on February 1, 2026, and adopts a risk-based approach to AI regulation similar to the European Union’s AI Act.
• Illinois’ House Bill 3773: Amends the Illinois Human Rights Act to protect employees against discrimination from, and require transparency about, the use of AI in employment-related decisions.
  
  
• California Privacy Protection Agency (CPPA):In November 2024, the California Privacy Protection Agency released draft regulations on the use of AI and automated decision-making technology, which were promulgated under the California Consumer Privacy Act.       
  
  
• The California Civil Rights Department (CRD): Under the proposed rules, employers that use AI in their hiring or employment practices would not be able to use a system that screens out, ranks or prioritizes applicants based on their religious creeds, disabilities or medical conditions unless the factors are job-related.           
  
  
• Texas’ 88(R) HB 1709:If passed, the Texas Responsible AI Governance Act would establish obligations for developers, deployers, and distributors of “high-risk AI systems.” The proposal adopts a risk-based approach to AI regulation like the European Union’s AI Act. “High risk” systems include those used in consequential decisions, such as employment, healthcare, financial services, and criminal justice.

New York City: Local Law 144 (LL 144)

• Effective Date: July 5, 2023.
• Scope: Prohibits the use of Automated Employment Decision Tools (AEDTs) unless a bias audit is conducted and specific notices are provided.
• Notice Requirements:
  • Employers must notify applicants that an AEDT will be used.
  • Notice must include information on how to request reasonable accommodations.
  • For NYC applicants, notice must be provided at least 10 business days before use, including a description of job qualifications assessed by the AEDT.

• Bias Audits:
  • Employers must conduct an audit to check for bias against protected groups (race/ethnicity, sex) before using an AEDT.
  • The audit must be performed by an independent third party and repeated annually.
  • Results of the audit must be publicly available.
• Applicability:
  • Applies to employers and employment agencies using AEDTs in NYC, including jobs based in NYC, remote jobs with a NYC office, or agencies located in NYC.
• Penalties for Non-Compliance:
  • $500 fine for the first violation.
  • Fines of up to $1,500 for subsequent violations.

What’s Next for Employers?

The Trump administration is unlikely to make a major impact on regulation AI because most AI regulatory efforts are occurring at the state level and local level. It is likely that we will see an uptick in AI regulations in democratic-led states.

Employers that use or are considering using AI to make employment decisions are advised to stay up to date on current legislations and prioritize transparency measures and proactive audits to manage the risk of bias in AI tools.

If you have any questions or concerns regarding use of AI systems for employment decision making, please feel free to contact any member of the Poricanin Law team.

Effective June 1, 2025, to comply with the Warehouse Worker Injury Reduction Program, certain New York warehouse employers will need to prepare and implement a program identifying and minimizing the risks of musculoskeletal injuries to their employees, which are the leading cause of injury that results in workers missing work.  Such musculoskeletal injuries include those to the muscles, nerves, tendons, ligaments, joints, and cartilage of the lower limbs, neck, and lower back.

To comply with the Warehouse Worker Injury Reduction Program, employers that employ more than 100 employees at a single warehouse distribution center, or more than 1,000 employees at one or more warehouse distribution centers within New York, must establish an injury reduction program and work with employees to continuously evaluate and reduce or eliminate musculoskeletal risks and injuries in the workplace.

A compliant program includes evaluating worksites and exposures, controlling exposure, providing employee training, providing on-site medical and first aid practices, and having employee involvement.  Additionally, employers will be required to consult with a qualified ergonomist to evaluate each job, process, or operation, and perform a written worksite evaluation for risk factors that cause or are likely to cause musculoskeletal injuries, including rapid pace, forceful exertions, repetitive motions, bending, twisting, and awkward postures and combinations that have caused or are likely to cause musculoskeletal injuries and disorder. 

Employees must be notified in writing of the results of the worksite evaluation and employers must maintain copies of the evaluations at locations within the warehouse.  Employers must review and update worksite evaluations annually, and a new analysis of risk factors must be conducted within 30 days of whenever a new job, process, or operation is introduced that could increase the risk factors for musculoskeletal injuries and disorders.  If a risk factor is identified, the employer must correct the risk within 30 days; if it cannot be corrected, then the employer must minimize the exposure to the extent feasible.

Employees and their supervisors must also receive annual injury reduction training in the employee’s language and during employees’ normal hours of work.  The training must include information on musculoskeletal injury and disorder risk factors and exposures in the workplace; identification of the early symptoms of musculoskeletal injuries and disorders; musculoskeletal injury and disorder prevention, including both engineering controls and administrative controls; the employer’s risk factor identification and prevention program, including the summary protocols for medical treatment; the employees’ right to report risk factors, hazards, injuries, and health and safety concerns; and unlawful retaliation and workplace discrimination.

This law is the latest attempt to reduce warehouse injuries in New York State.  To ensure compliance with the law, employers should begin evaluating their worksites for risk factors and determine how to reduce or eliminate risks. If you have any questions about the subject of this article and its implications for your business, please contact your Forework representative.

An Employer’s Burden of Proof for Showing Exempt Status Under the FLSA

On January 15, 2025, the United States Supreme Court held in E.M.D. Sales, Inc. v. Carrera that employers must prove that an employee is exempt from the minimum wage and overtime pay provisions of the Fair Labor Standard Act (“FLSA”) by only a preponderance of the evidence—meaning more likely than not—and not by the more stringent and demanding standard of “clear and convincing” evidence.

Generally, all employees who are not considered exempt are eligible to receive minimum wage and overtime pay for overtime work.  An employee’s exempt status is an exception to this general rule.  For employees who are exempt from overtime pay, the basic rule is that such employees receive a pre-determined salary, from pay period to pay period, and there are no fluctuations in their salary, for all the hours of their work.  Thus, irrespective of whether they work 45 hours or 25 hours, they are supposed to receive their full salary for that work time.

Employees are exempt from overtime obligations if each of the following 3 tests are met: (1) the employees are paid on a “salary basis”; (2) the employees receive a predetermined minimum salary amount, as required by federal or State law (whichever has the higher minimum salary threshold); and (3) the employees’ primary duty involves performance of one of the exempt duties, which includes executive, professional, administrative, outside sales, and certain computer-related duties.

An employer’s burden to prove an employee’s exempt status from those provisions of the FLSA often arises when an employee alleges that their employer failed to pay them minimum wage or failed to pay them overtime compensation for hours worked in excess of 40 hours in a workweek in violation of the FLSA.  The Court’s rejection of the higher evidentiary standard used by some courts will make it less difficult for employers to demonstrate an exemption.

In reaching its decision in E.M.D. Sales, the Court explained that, historically, it has only imposed a heightened evidentiary over the default preponderance standard in the following three circumstances: (a) where a statute specifies a heightened standard of proof; (b) where the Constitution requires one, and (c) in “uncommon” cases involving coercive government actions, such as taking a person’s citizenship.  The Court emphasized how “other workplace protections that vindicate important public interests remain subject to the preponderance standard,” including Title VII employment discrimination cases, where the preponderance of evidence standard also applies.

Employers who classify employees as FLSA-exempt should take appropriate steps to ensure they would be able to demonstrate – by a preponderance of evidence – that they properly classified each employee who is not paid minimum wage or overtime compensation.  Employers should consider auditing exemptions and job descriptions to ensure they have appropriate and sufficient records of their payment on a salary basis and the nature of the duties the employee performs and confirm that their job duties and compensation meet the requirements of the applicable exemption, and make any adjustments as necessary., please feel free to contact any member of the Forework team.

On January 14, 2025, the Department of Labor issued an Opinion Letter regarding the applicability of the Family and Medical Leave Act (FMLA) substitution rule when an employee on FMLA leave is receiving state or local paid family and medical leave benefits (PFML).

FMLA Substitution Rule

FMLA is designed to help employees balance their work and family responsibilities by allowing them to take reasonable unpaid leave for certain family and medical reasons. Under the FMLA substitution rule, an employer may require, or an employee may unilaterally choose, to use accrued paid leave during unpaid FMLA leave. When paid leave is “substituted” for unpaid FMLA leave, the accrued paid leave runs concurrently with the FMLA leave. 

If the employee is receiving any pay through short-term disability or workers’ compensation benefits, the substitution rule does not apply because the leave is not unpaid, unless the employer and employee agree otherwise.

PFML Benefits

Although the FMLA regulations only specifically mention short-term disability and workers’ compensation as sources of pay that preclude the applicability of the FMLA substitution rule, many states have passed PFML programs, e.g., New York’s Paid Family Leave program. These programs offer partially paid leave, often for reasons that overlap with FMLA and may exceed FMLA benefits in terms of leave duration or reasons covered.

The DOL’s Opinion Letter is meant to address the question of whether an employee’s receipt of PFML benefits should be treated the same as receipt of short-term disability or workers’ compensation benefits during FMLA.

Impact of Opinion Letter

The Opinion Letter confirms that when an employee on FMLA is receiving PFML benefits, the FMLA substitution rule does not apply because the employee is not on unpaid FMLA leave. Therefore, both the employer and employee must agree to the employee’s use of accrued paid leave to supplement the PFML benefits to receive 100% of pay.

Next Steps for Employers

1. Review Leave Policies. Employers should review their leave policies to ensure compliance with the DOL’s interpretation that PTO cannot be substituted during FMLA leave if the employee is receiving state/local paid leave benefits, disability, or workers’ compensation.
2. Policy Revisions. Any policy that mandates PTO substitution during concurrent FMLA and paid leave should be revised. PTO may only be used to supplement other benefits (e.g., state/local paid leave or disability benefits) if both the employer and employee agree to it.
3. State/Local Paid Leave Considerations. There may be situations where employees are eligible for benefits under state/local paid leave laws that are not also covered by the FMLA. As such,employers should be aware that each jurisdiction may have specific rules governing the use of PTO during paid family or medical leave periods that are not concurrent with FMLA.

If you have any questions or concerns regarding the DOL opinion or FMLA substitution rule, please feel free to contact any member of the Forework team.

As 2025 begins, New York employers should keep in mind the following New York State laws taking effect in 2025:

Minimum Wage Increases

• The state minimum wage increased by $0.50 on January 1, 2025 and is scheduled to increase again by $0.50 on January 1, 2026.
• Up from $16.00, the hourly minimum wage for non-tipped workers New York City, Westchester County and Long Island increases to $16.50.
• Up from $15.00, the hourly minimum wage for non-tipped workers throughout the rest of New York State increases to $15.50.

Paid Prenatal Leave

Paid prenatal leave is a separate benefit from NYS sick leave or any other leave policies and laws. Accordingly, employees are entitled to 20 hours of paid prenatal leave in addition to any other available leave options. Employers cannot require an employee to choose one leave type over another or exhaust one type of leave before using paid prenatal leave. 

As mentioned in last week’s article, pregnant employees in New York who work for private employers are eligible for 20 hours of paid leave for prenatal care.

Effective January 1, 2025, New York employers will be required to provide up to 20 hours of paid prenatal leave to pregnant employees during any 52-week period for a long list of pregnancy-related doctor visits.

Effective June 19, 2025, the Fashion Workers Act will require model management companies to register their business within one year of the effective date, i.e., June 19, 2026. The Fashion Workers Act will also impose several duties and responsibilities on both model management companies and clients related to working with models in New York. As detailed herein, the Fashion Workers Act is aimed at providing greater protections for fashion workers and introduces regulations aimed at implementing labor protections for models and creatives.

Such duties and responsibilities include: (1) a fiduciary duty to the models that the model management company represents, (2) conducting due diligence to ensure that any employment or engagement “does not pose an unreasonable risk of danger to the model,” (3) using “best efforts to procure employment” for models signed to the model management company, (4) providing models with copies of the “final agreements” that the model management company has negotiated with clients and “any deal memos memorializing such agreements” at least 24 hours before the start of the model’s services, (5) clearly specifying the items that will be paid for initially by the company but that will ultimately be deducted from the model’s compensation, (6) disclosing any financial relationship that may exist between the model management company and the client, (7) notifying former models if the company collects royalties due to a model whom the company no longer represents, (8) obtaining “clear written consent for the creation or use of a model’s digital replica, detailing the scope, purpose, rate of pay, and duration of such use,” which must be separately obtained from the representation agreement, and (9) posting a physical copy of the company’s certificate of registration in their office, posting a digital copy on the company’s website, and including “the registration number of the [company] in any advertisement, including social media profiles for the [company], for the purpose of solicitation of models . . . and in any contract with a model or client.”

The Fashion Workers Act also outlines a number of prohibitions placed on model management companies, including, among other things, that a model management company cannot “require or collect any fee or deposit from a model” at the time of signing or as a condition to entering into any agreement, and cannot require a model to sign a model management company contract that contains a term greater than three years or renews without the model’s affirmative written consent. Any power of attorney agreement between a model management company and a model must also be optional and “subject to termination by the model at any time and for any reason.”

Clients will also have duties under the Fashion Workers Act, including, among other things, the requirement that they compensate models at an hourly rate at least 50% higher than their contracted rate for anything that exceeds eight hours in a 24-hour period, provide a 30-minute meal break for any employment that exceeds eight hours in any 24-hour period, ensure that any employment that requires nudity or sexually explicit material complies with the requirements set out in Section 52(c)(3) of the Civil Rights Law, “provide adequate levels of liability insurance,” and “obtain clear and conspicuous prior written consent for any creation or use of a model’s digital replica, detailing the scope, purpose, rate of pay, and duration of such use.”

The relevant definitions relating to the Fashion Workers Act include the following:

• A “model management company” is defined as any person or entity in New York that “(a) is in the business of managing models participating in entertainments, exhibitions or performances; (b) procures or attempts to procure, for a fee, employment or engagements [for] models; or (c) renders vocational guidance or counseling services to models for a fee.”
• A “model” is defined as “an individual, regardless of the individual’s status as an independent contractor or employee, who performs modeling services for a client and/or model management company or who provides showroom, parts, or fit modeling services.”
• “Client” is defined as “a retail store, a manufacturer, a clothing designer, an advertising agency, a photographer, a publishing company or any other such person or entity that receives modeling services from a model, directly or through intermediaries.”

Model management companies with five or less employees must pay a $500 registration fee, and those with more than five employees must pay a $700 registration fee. Registration must be renewed every two years. The only exemptions to this are for those model management companies (1) domiciled outside the state, (2) registered in another state with the same, or greater, requirements than the Act, and (3) that do not maintain an office in New York or solicit clients in New York.

Enforcement of the Act will be conducted by the New York State Department of Labor (NYSDOL). Model management companies should be on the lookout for further guidance from the NYSDOL as to the required forms necessary to meet the registration requirements and other relevant guidance relating to the significant compliance burdens. In the meantime, management companies and fashion businesses operating in New York should review existing policies and practices with an eye towards payment and overtime, and should aim to establish comprehensive policies and training programs focused on workers’ rights, financial transparency and anti-harassment, as the legislation may require significant adjustments to current practices.

In the midst of the ongoing regulatory scrutiny of noncompete agreements, an NLRB judge issued a favorable finding to an employer enforcing its employment agreement which contained a noncompete provision.

As a condition of employment, Permobil Inc. gave its workers an employment agreement which contained a noncompete provision barring employees from working for competitors in the United States for one year after leaving the company. Permobil sued a former employee for violating the noncompete provision and alleged that the former employee took top-secret company information to their main competitor.

National Labor Relations Board (“NLRB”) General Counsel brought the matter before the NLRB, contending that Permobil’s employment agreement was overly restrictive and that the noncompete provision violated an employee’s Section 7 rights under the National Labor Relations Act (“NLRA”) by preventing the employee from voluntarily quitting to force their employer to meet their demands.

An NLRB Judge found that, based on the current law, the noncompete provision did not violate the employee’s Section 7 rights, reasoning that the employer had legitimate business reasons for the provision and was not driven by any unlawful motive to retaliate against the former employee. Specifically, the provision was limited to employees working on a certain secret project, indicating the importance of the confidentiality of said secret project and “whose primary thrust is the protection of [Permobil’s] business and technological interests.” The NLRB reasoned: “Any Section 7 rights affected by employees agreeing not to be employed by a competitor is remote and, in any event, overridden by the language spelling out the business reasons for the ban.”

This ruling is favorable to employers and their non-compete provisions and further indicates support for enforcing non-competes. If you have any questions about the subject of this article and its implications for your business, please contact Forework.