The entertainment industry worked at a fast clip throughout 2020 to swiftly adapt production protocols to comply with federal, state, and local COVID-19 orders, and to keep cast and crew safe. While a widespread vaccine rollout is on the horizon, COVID-19 transmission rates in California—particularly in Los Angeles County—have remained high, prompting the state and local governments to issue new guidance to curb COVID-19 transmission.
The state has also enacted new, non-COVID-19-related laws applicable to all California employers, including producers and distributors. This advisory highlights key legal developments—both COVID- and non-COVID-related—of which California productions must be aware and affirmatively respond to in 2021.
California State Travel Advisory
On January 6, 2021, the California Department of Public Health issued an updated travel advisory that discourages "non-essential" travel to any part of California more than 120 miles from one's place of residence, or to other states or countries. Non-essential travelers from other states or countries are "strongly discouraged" from entering California, but those who do should self-quarantine for 10 days after arrival.
"Non-essential travel" includes travel that is considered tourism or recreational in nature. For example, an individual who is working in California and travels out-of-state to visit family will need to self-quarantine upon his or her return to California before they can resume work, unless an exemption applies.
The travel advisory exempts certain types of "essential travel," including:
- The operation, maintenance, or usage of critical infrastructure or otherwise required or expressly authorized by law (including other applicable state and local public health directives);
- Work and study;
- Critical infrastructure support;
- Economic services and supply chains;
- Immediate medical care; and
- Safety and security.
Additionally, the quarantine period does not apply to individuals who "routinely cross state or country borders for essential travel."
Why is this important?
Productions may be delayed due to narrowed California state and/or local (city or county) travel restrictions. Shooting schedules may need to be rewritten to accommodate delays caused by travel restrictions and quarantine periods, along with cancelling location bookings on short notice, which may result in additional fees and adjustments to production budgets.
Ongoing productions may experience delay due to staffing shortages created when employees who have engaged in personal travel are required to quarantine and be absent from work for one and one-half weeks. Keep on top of frequent state and local changes to travel by making it a daily (or at least weekly) habit to check in with the most recent changes to any travel restrictions or advisories.
Cal/OSHA's Emergency COVID-19 Prevention Rule
Cal/OSHA issued additional COVID-19 safety requirements for employers. These requirements under the Emergency Temporary Standard (ETS) are extensive and will necessitate updates to most businesses' COVID-19 safety documents for use in California. Productions are not exempted from compliance. The full text of the new rule can be found here.
One key requirement is to establish and implement a specific, written COVID-19 Prevention Program. Some of the required content in the written COVID-19 Prevention Program overlaps with the COVID-19 safety policies required by most major exhibitors, but other provisions go above and beyond what was previously required by law and by distributors. For example, there are additional restrictions and requirements for employer-provided housing and transportation, which are particularly relevant for productions filming on location and where talent travels to California for filming.
Further, the rule requires that employers maintain an employee's "earnings, seniority and benefits" including "the right to their former job status" upon return from leave. While it is unclear whether such leave must be paid or unpaid if an employee no longer has accrued paid sick leave available, Cal/OSHA held a Stakeholder's meeting on December 11, 2020, at which time it fielded numerous questions on this provision and promised clarification soon in the form of a revised FAQ.
However, the current FAQs are clear that an employer must provide paid, job protected leave for the time period employees are excluded. So until further notice, employers should pay "exclusion pay" if an employee does not have accrued paid sick leave available to cover the entirety of their covered absence.
Finally, the rule imposes significant new testing and training requirements, both preventative and during a workplace outbreak.
Why is this important?
The ETS imposes numerous (and burdensome) requirements on employers to regularly provide testing to employees and train them on COVID-19 safety related protocols. Many productions, particularly in Los Angeles County, are already subject to rigorous employee testing and training requirements, but the Cal/OSHA rule imposes these requirements on all productions.
Further, exclusion pay presents a potential new wrinkle if it is interpreted to be an additional paid leave entitlement. In all, the ETS will impact production schedules and budgets, and compliance should be considered early on in pre-production.
- See DWT's blog post here for more details about all of the key requirements of Cal/OSHA's Emergency COVID-19 Prevention Rule.
Broader Notification Requirements, Workers' Compensation Presumption, and OSHA-Related Reporting
California enacted Senate Bill (SB) 1159 and Assembly Bill (AB) 685, which require employers to review and update their practices concerning tracking and responding to positive tests to protect against potential liability.
SB 1159 (effective September 17, 2020) created a presumption of workers' compensation coverage for employees in specified industries who contract COVID-19 in the workplace and in the case of an outbreak, for all employees. The law also imposes new reporting obligations for all employers.
AB 685 (effective January 1, 2021) increases potential Cal/OSHA exposure concerning COVID-19 by implementing new reporting requirements and eliminating the need for advance notice of potential Serious and Willful violations. A primary effect of AB 685 on productions is that it requires employers to provide written notice of potential exposure to COVID-19 to all employees and subcontractors (and their union representatives) who were on the premises at the same time as an individual with COVID-19 while the individual was infectious.
This written notice must be provided within one business day of the employer learning of the potential exposure. AB 685 also specifies the content that must be included in the written notice, such as the disinfection and safety plan that the company plans to implement and complete per CDC guidelines.
- See DWT's blog post here for more details about all of the key requirements of SB 1159 and AB 685.
Why is this important?
There are now several reporting requirements under state and local laws, including Cal/OSHA's ETS, which must be complied with immediately when an employer is on notice that an employee tested positive for COVID-19 or had close contact with someone who tested positive. Some of these notification and reporting obligations overlap, but all must be complied with.
Non-compliance can result in a production being shut down until the agency deems the company is in compliance, along with other monetary penalties. Given the tight deadlines imposed by the various, overlapping rules, it is essential that employers have written notice templates prepared in advance, before an outbreak occurs.
Stricter Face Covering Guidance
On November 16, 2020, the California Department of Public Health issued an updated Guidance for the Use of Face Coverings. This updated guidance, applicable throughout the state of California, mandates that a face covering is required to be worn at all times when outside of the home, with some limited exceptions.
According to the guidance, individuals are exempt from wearing face coverings in the following specific settings:
- When in a car alone or solely with members of their own household;
- When working in an office or in a room alone;
- When actively eating or drinking, as long as they are able to maintain a six-foot distance from persons who are not members of their same household;
- When outdoors and maintaining at least six feet of distance from others not in their household;
- When obtaining a service involving the nose or face, for which temporary removal of the face covering is necessary to perform the service;
- When workers are required to wear respiratory protection; and
- When specifically exempted from wearing face coverings by other California Department of Public Health Guidance.1
The guidance also describes exemptions to the face covering requirement for individuals based on age, disability, and workplace safety. For example, persons under the age of 2 are not required to wear face coverings.
If an employee's serious medical condition precludes him or her from wearing a face covering, the employer should engage in the interactive process to determine a reasonable accommodation. Examples of a reasonable accommodation may include a face shield or other legally compliant covering, additional social distancing, or other reasonable accommodations that may substitute the face covering, if appropriate to the work circumstances. Employers should also consider offering employees a leave of absence if such reasonable accommodations would not safely permit the employee to perform the essential functions of his or her job.
Why is this important?
Some employees may object to wearing a mask for personal, medical, political, religious, or other reasons—some of which may be protected under the law and others which may not be, depending on the circumstances. Be prepared with a clear policy on when masks will be required and how employees must immediately request an accommodation to this policy so that human resources can promptly evaluate an employee's refusal, under applicable law.
Expanded Definition of "Independent Contractor"
At one point, more than 30 amendments were proposed to amend AB 5, the landmark 2019 legislation which codified the stringent ABC test for worker classification. Many of the proposed amendments affected the entertainment industry, and numerous lobbyists demanded specific creative professionals be exempted from the ABC test under the professional services exemption.
Lobbyists further pushed for broadening of the narrow business to business exemption, including efforts aimed at strengthening the viability of services and loan out agreements common to productions. The legislation has been (and still is) an awkward fit with the entertainment industry standard and practice.2
The net result of collective lobbying efforts was AB 2257, which clarifies and changes previous exceptions, such as lifting the 35 submission per year cap on work by freelance writers and photographers, and adds new occupations as qualifying as professional services under the exemption, including:
- Freelance writers, editors, photographers, photojournalists, videographers, photo editors, fine artists (now defined as someone who creates work of art appreciated for the imaginative, aesthetic, or intellectual content, including paintings, sculptures, etc.), translators, editors, copy editors, illustrators, content contributors, producers, narrators, or cartographer for a journal, book, periodical evaluation, other publication or educational, academic, or instructional work, all subject to further terms and conditions set forth in the exemption.
The new law is not as broad as lobbyists pushed for—in particular, the professional services specifically carves out application of the exemption to its industry in certain professions such as photographers, photo editors, photojournalists, and videographers.
The new law created an entirely new exception to the ABC test for the recording industry, exempting recording artists and nearly every profession associated with a sound recording or musical composition. (Notably absent from the new law are exemptions for film and television unit production crews working on live or recorded performances for audio visual works.)
The individuals in these categories may be classified as independent contractors (subject to the Borello test) if they satisfy a long list of criteria. Likewise, a musical group or musicians may be contractors for the purpose of a single engagement, unless the group performs in an orchestra, plays at a theme/amusement park, performs in a musical theater production, headlines a performance with more than 1,500 attendees, or performs at a festival that sells more than 18,000 tickets per day.
Individual performance artists playing their original work may also be classified as contractors so long as they are free from the control and direction of the hiring entity, retain the rights of their intellectual property, set their own terms of work, are able to negotiate their rates, and are free to accept or reject performance engagements.
AB 2257 included a number of other exemptions pertinent to the entertainment industry, such as an exemption for single engagement events. The legislation also expanded the business to business exemption.
First, it removed the requirement that a business service provider furnish services directly to the contacting business rather than to customers of the contracting business so long as the "service provider's employees are solely performing the services under the contract under the name of the business service provider and the business service provider regularly contracts with other businesses."
The new law further clarified that a business can be located at the contractor's home. It further no longer requires the contracting business to actually contract with others for the same services provided, but rather that it advertise and hold itself out to public as available for like services. Finally, it clarified that proprietary materials are not included in the definition of "tools, vehicles, and equipment" when analyzing whether the exemption is met.
The law added a curious addition to the business to business exemption, as follows:
When two bona fide businesses are contracting with one another under the conditions set forth in subdivision (a), the determination of whether an individual worker who is not acting as a sole proprietor or formed as a business entity, is an employee or independent contractor of the business service provider or contracting business is governed by Section 2775.
It is unclear how this provision will be interpreted by courts and or the Labor Commissioner when applied to loan out agreements, which are widely used in the entertainment industry for the tax advantages they provide to both the company and the individual. Ever since the passage of AB 5, there has been widespread concern that the legislation would affect the use of loan out agreements.
There was hope that AB 2257 would include more industry specific exemptions and allow for the flexible (and unique) contractual arrangements. Lobbyists have insisted since the law was enacted that it does not affect the usage of loan out companies to do business. However, until this clause is tested by a court or the Labor Commissioner, it is not certain whether or not loan out arrangements will be affected and if a court will honor the industry's long-standing usage of this contractual arrangement with interpretative guidance or case precedent.
For now, the clause clarifies that the individual worker working through a loan out is still analyzed under the ABC test as to both their loan out company and the contracting business (i.e., production company).
Why is this important?
AB 2257 gave the entertainment industry some (but not enough) relief from the restrictive ABC test. More intense lobbying to change the exemptions and application of the test is likely, and we can expect additional legislation in the future.
For now, employers need to amend their written contractor agreements with individuals their company does not classify as employees. Some individuals may qualify for more than one exemption, so it is recommended that employers gather documentary evidence in support of any and all applicable exemptions. Employers should work with legal counsel to prepare an updated compliant contractor agreement. In particular, employers should consider the strength of their written loan out agreements under the business-to-business exemption.
Key Takeaways for Producers and Distributors
- 1. Be sure to regularly check and comply with the California state travel advisory and any local travel restrictions when resuming filming in 2021.
- 2. Consistently and regularly update company templates used for notifying cast, crew, the applicable guilds, and others in the event of workplace COVID-19 exposure.
- 3. Consistently and regularly update workplace face covering policies for compliance with the updated statewide guidance, while also taking necessary steps to keep cast, crew, participants, and communities safe.
- 4. With the assistance of legal counsel, review contractor agreements used for productions with creative professionals and loan out companies to address worker classification issues and update applicable agreements in accordance with the applicable exemption(s). Audit workforce for compliance with AB 2257.
- 5. Continue to monitor applicable federal, state, and local guidance and orders for updates, and update workplace policies and protocols as needed.
1 In some counties and under some guild agreements, there are exemptions to the face covering requirement for talent when on-camera. Productions should be sure to review and comply with the applicable government orders and guild agreements (if any).
2 Under the ABC test, a worker is properly considered an independent contractor to whom a state wage order does not apply only if the hiring entity establishes all of the following: "(A) The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact[;] (B) The person performs work that is outside the usual course of the hiring entity's business[; and] (C) The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed." Cal. Labor Code § 2775(b)(1).
The facts, laws, and regulations regarding COVID-19 are developing rapidly. Since the date of publication, there may be new or additional information not referenced in this advisory. Please consult with your legal counsel for guidance.
DWT will continue to provide up-to-date insights and virtual events regarding COVID-19 concerns. Our most recent insights, as well as information about recorded and upcoming virtual events, are available at www.dwt.com/COVID-19.