There has been a lot of political talk lately about the pay gap between male and female workers, and California is one of the more progressive states when it comes to tackling this issue. In October, Governor Jerry Brown took steps to help close that gap in California by signing S.B. 358, which will revise the existing version of the California Fair Pay Act, specifically Cal. Labor Code §1197.5.

The existing law prohibits an employer from paying male and female workers in the same establishment at different wage rates for equal work requiring equal skill, effort, and responsibility. Exceptions exist under the current law, for seniority, merit, quality and quantity of work, or some other bona fide factor other than the sex of the worker. At present, it is a misdemeanor offense to pay workers of opposite sex differently in violation of the law.

Taking effect on January 1, 2016, the law will be strengthened and will incorporate changes, such as:

• Employees are permitted to discuss their own wages, and the wages of others, openly. These changes are designed to promote pay transparency.
• Instead of prohibiting wage differentials between workers of the opposite sex in the same establishment, the new law will prohibit paying workers of the opposite sex differently for substantially similar work, taking into consideration skill, effort, and responsibility associated with the work.
• If there is a wage differential between workers of the opposite sex, the burden is on the employer to affirmatively demonstrate why the wage differential exists, based on seniority, merit, quality and quantity of work, or some other bona fide factor other than the sex of the worker. These factors must be applied reasonably, and must account for the whole differential. This new provision will place a higher burden on employers who are trying to justify a pay gap between similarly situated employees of different sex.
• Employers are prohibited from discharging, discriminating against, or retaliating against workers who seek action under the new provisions of the new law, and any employee who is discharged, discriminated against, or suffers retaliation by their employer for seeking action under the provisions of the new law will be eligible to recover lost wages (including interest and lost benefits), may seek reinstatement or other suitable equitable relief. This change makes it easier for employees to establish a prima facie case against their employer.
• Employers are required to retain records concerning employees’ wages and wage rates for a period of three years, as opposed to the current two years.

What Can Employers Do In Preparation For This Change?

The new law is meant to provide additional protections to employees by placing new burdens on employers. Worker’s rights are important, and it is important that business owners and employers be appraised of the new changes that will be taking effect in the new year concerning employee wages. Any business who has California employees will be subject to these new requirements.

Employers should get ready for this change by evaluating employees’ payment structure and assessing whether there is any potential for problems to arise. Employers have a few months before the law takes effect, in which they can take steps to correct or mitigate any potential employee pay issues. Analyzing any wage differentials and assessing whether any reasonable factors exist that warrants the differential in employee’s pay are just a couple of important steps an employer should be taking at this time. Employers can also advise management of the changes in the law, especially the provisions concerning workers’ new ability to openly discuss wages.

For more information on the ramifications of this legal update, or should you need advisement for any employment-related matter, contact Spotora and Associates, PC today and to speak with a senior level Los Angeles business attorney.

This past spring, one of the Department heads we work with at FremantleMedia invited us to attend the live performance of an “American Idol” taping. This taping, or rather, pop-hysteria, led to conversations relating to the management of those that do not win the title of the next “American Idol”.

Now we all know that the winner is locked into a contract with Music Label/Management Company, “19”, but what of the other near-Idols? Who gets to run their proverbial show? This question, in accompaniment to some of the surrounding conversations and eager talent managers, reminded us of a piece of legalese that has come up time and time again in our practice. The issue: Managers vs. Agents.

Whether you are a bona fide Talent Manager, a Stage Mom, or the girlfriend who listened to her boyfriend’s band play one night at the local pub and decided to serve as its manager, you should understand the differences between the roles that managers and agents are legally entitled to play. . . for your own good!

For starters, agents are licensed by the state they work in and most commonly earn their money by negotiating deals for their clients. Typically, they also enter into a client agreement which is, in pertinent part, regulated by industry labor unions such as, the Screen Actors Guild (SAG), the Writers Guild of America (WGA) and, the Directors Guild of America (DGA). Through these regulated agreements, the commissions that agents charge their clients are legally bound to a prescribed percentage. Furthermore, it should be noted that agents may not serve as a producer on their clients’ projects.

On the other hand, managers are not commission-regulated, do not need a license to ‘manage’ and, can charge their clients 15% or more. . . and often do. Moreover, managers may produce film or television if they wish to and so of course, they are also afforded the ‘glamour’ element in that they might find themselves in the spotlight one Award evening with an Emmy or an Oscar in tow.

In light of these representative differences, and as you might imagine, the ever-evolving entertainment industry has shifted gears over the years to accommodate and benefit from both of these roles. Without surprise to anyone, these specialty services have impacted not only the way talent pursues work, but the manner in which movies and television are actually made.

So what’s the big deal!? We all have a job to do, right!?

Well, one common issue arises from infuriated agents who argue that managers who attach themselves to their clients’ projects as producers are not legitimate producers and are consequently driving up production costs. Subsequent to such a contention, agents have put pressure on industry guilds by lobbying to either deregulate agents, or regulate managers. And, while no exact resolution has been reached to date, SAG has begun to pay closer attention to the black letter law and has consequently cracked down on the procurement of employment by managers for their clients. On the what you ask? On getting the talent a gig!

In California, Labor Code Sec. 1700.4(a) defines “talent agency” as “a person or corporation who engages in the occupation of procuring, offering, promising, or attempting to procure employment of engagements for an artist.” Moreover, Sec. 1700.5 provides that “[n]o person shall engage in or carry on the occupation of a talent agency without first procuring a license…from the Labor Commissioner.”

Therefore, ATTENTION ALL MANAGERS: Be Weary of The Services You Provide!

Procuring employment for your artist-client is not only illegal without proper licensing but, should you attempt to collect any unpaid fees, you can rightfully not only be denied those monies for having performed a service you were not licensed to perform but, you can also be ordered to return any fees already received!

So what’s the bottom-line? Both forms of talent reps are still widely used and widely needed in the ‘industry’. However, it is important that Managers know their role in their clients’ professional lives and also know the potential consequences they may face if they knowingly (or even unknowingly) provide services reserved for licensed Agents.