The Condoms are Coming

http://www.xbiz.com/articles/137838/fattorosi

With words similar to those, Paul Revere ushered in a revolution that transformed the face of a nation. Similarly, on June 7, Cal/OSHA changed the shape of this industry’s future which might ultimately lead to a revolution in adult entertainment. I was able to attend the meeting and even tweeted the discussions from the meeting live via my Twitter account. As it has been reported, the turnout was strong with numerous industry people in attendance representing all aspects of the industry.

What was quite clear from the meeting was the absolute distrust the industry has for those on the Cal/OSHA Board that have drafted the proposed regulations. There were statements made during the meeting that Cal/OSHA was attempting to regulate the industry out of existence for moralistic and religious reasons or perhaps that the AIDS Healthcare Foundation, the Pink Cross Foundation and Cal/OSHA were in some way working together to drive the industry out of California.

I can certainly understand how many in the industry may feel this to be true, from my experience dealing with Cal/OSHA and state safety regulations, that is simply not the case. Cal/OSHA is attempting to bring this industry in line with numerous other industries that are regulated in regards to employee safety. Cal/OSHA actually feels that the proposed regulations are less intrusive and harsh than the current regulations. While the new regulations proposed by Cal/OSHA are yet to become law and may not for another year, it was clear from their meeting that condoms and other barrier protection methods are now required and are currently the law in porn.

Under the proposed regulations, barrier protection and condoms may not have to be utilized for oral sex scenes when certain requirements are met by the producers and talent. However, other than that one issue, barrier protection and exposure issues will change how adult entertainment is produced and consumed.

Unfortunately due to the heated nature of the meeting, not all issues could be covered and there are still numerous discussions that are necessary as to the most basic issues such as how to dispose of the used barriers, how to handle clothing used on set, record keeping requirements and employee training issues. This article will focus on the proposed regulations and want it means to producers and talent.

INDEPENDENT CONTRACTORS OR EMPLOYEES ?

One of the first issues to be raised during the meeting was that the proposed regulations only apply to employees and not independent contractors. Numerous performers and producers spoke up and attempted to declare themselves independent contractors and thus not bound by the regulations. Cal/OSHA did not directly address the IC vs. EE issue and merely referred the audience to the California Labor Code and existing case law.

Rest assured that for purposes of the proposed regulations, performers are indeed employees, even if only for a day, of the hiring studio. However, under the tax code, many of those same performers may actually be independent contractors. There are two different legal tests to determine employee status under the California Labor Code and the U.S. Tax Code. According to the Department of Industrial Relations of the state of California, the California Supreme Court has adopted the “economic realities test” as noted in S. G. Borello & Sons, Inc. vs. Dept. of Industrial Relations (1989) 48 Cal.3d 341. The economic realities test sets forth several factors for determining whether someone is an independent contractor or employee:

Whether the person performing services is engaged in an occupation or business distinct from that of the principal;
Whether or not the work is a part of the regular business of the principal or alleged employer;
Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work;
The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers;
Whether the service rendered requires a special skill;
The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
The alleged employee’s opportunity for profit or loss depending on his or her managerial skill;
The length of time for which the services are to be performed;
The degree of permanence of the working relationship;
The method of payment, whether by time or by the job; and,
Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests.

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative vs. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288).

There is little doubt that a performer would be determined to be an employee under the above noted tests. Several studios have already been fined by Cal/OSHA and to this author’s knowledge none have been overturned on appeal. Most recently, Hustler Video was fined over $14,000 by Cal/OSHA for the lack of barrier protection on set, lack of a blood borne pathogen plan as well as other infractions. According to an article on XBIZ.com on April, 5, 2011, Hustler plans on appealing its fine. However, there has been no recent news as to that particular case.

The only potential exception this author can see to the regulations is when performers coproduce a scene and trade content with each other. As long as there is no monetary compensation offered as payment for services, then more than likely, Cal/OSHA would not determine that a content trade situation to be employment.

Getting past the IC vs. EE argument, what does this mean for the industry and how will the proposed regulations effect content production in California on a daily basis?

Condoms for blow-jobs? First, the proposed regulations require condoms and/or barrier protection (dental dams) for all sex scenes where there is a possibility of an exposure by a performer to the bodily fluids of another performer. The only exception to this has been carved out for mainstream studios in so much that saliva has not been classified as a bodily fluid. The reason for this exception is probably apparent to everyone except Cal/OSHA.

The only exception to the condom/barrier rule is for oral sex scenes and only when both performers have a clean DNA PCR HIV test as well as clean gonorrhea and chlamydia test results within 14 days of the scene and have both been completely vaccinated for Hepatitis B and HPV.

It should be noted that the proposed regulations call for urine testing as well as throat and anal swabbing for gonorrhea and chlamydia for both male and female performers. It should also be noted that it takes a series of three injections over the course of six months for someone to be fully vaccinated for hepatitis B. Therefore, all performers should immediately seek hepatitis B vaccinations so as to insure they can continue to work once the proposed regulations actually take effect.

If a performer is not properly vaccinated or does not have a clean test, then condoms/barrier protection must be used at all times.

No more facials? The next question is — what about the money shot? According to the proposed regulations ejaculate cannot be placed into any orifice and or on any non-intact skin. In layman’s terms, cream pies, facials and/or swallowing will no longer be allowed. Ejaculate can only make contact with intact unbroken skin found on a performer’s breasts/chest, back, legs and feet. Obviously, any producer is still free to use non-harmful fake ejaculate to simulate real cum or squirting.

If for some reason, real human ejaculate or bodily fluids other than saliva does find its way onto broken skin and or an orifice — that would be considered an “exposure” and immediate medical attention must be provided and documented by the employer. Further, the employer must provide post exposure testing and all results recorded in accordance with Title 8 of the California Code of Regulations Division 1, Chapter 7.

Now that AIM is gone what’s next? So who’s going to be paying for all this testing, vaccinations, record keeping and medical treatment because of wayward money shots? According to the proposed regulations, all medical testing fees, treatment and record keeping requirements must be paid for by the producers and studios. Which producer, well that answer wasn’t so clear according to Cal/OSHA.

Basically, Cal/OSHA’s position is that the employers (studios and producers) can ban together to create cooperatives to negotiate with medical care providers and testing centers to bargain for the best price and therefore it will even out over the long run. Cal/OSHA assumes that all producers and studios will be “piggybacking” off each other’s tests. Further, these new additional costs cannot be passed on to the performers or talent agents. It is solely the responsibility of the employer to pay for these costs. On the bright side for the studios and producers, they will now be able to dictate exactly where talent will receive their testing from.

The condom police? So how is Cal/OSHA going to enforce these new regulations once they go into effect? Are they going to be sending Cal/OSHA’s cops in lab coats and environmentally friendly smart cars in droves to Porn Valley to peak in on everyone? The answer might be yes.

According to Cal/OSHA, enforcement will occur in two ways. The first and most obvious is because of an employee (performer) calling into Cal/OSHA’s offices and reporting a violation of the regulations. This alert will mandate an investigation by their offices. They literally have no choice and must open an investigation and look into the performer’s complaint. Thus, that is the easiest and quickest way to get Cal/OSHA knocking on your door. Be aware that a complaint by a performer can be made anonymously as well.

The second is what the Cal/OSHA Board referred to as a sweep. It is possible that they will send out a contingent of inspectors on a regular basis to do spot checks on studios and producers. At least the ones they can locate. In my previous experience I have seen Cal/OSHA perform “sweeps” on rare occasion and do not think that will be a likely occurrence. However, it may occur once the proposed regulations take effect just as a gentle reminder that compliance is mandatory.

You may be asking how can Cal/OSHA determine the difference between a disgruntled performer from a competitor or even a group such as AIDS Healthcare Foundation making an anonymous report. I don’t know how they can but Amy Martin from Cal/OSHA did indicate that they have been dealing with this very issue with other industries and have developed the ability to determine the difference. It should be noted that only a complaint from an actual performer mandates an investigation. All other complaints do not require an investigation and Cal/OSHA has the discretion to take no action on a report of a violation.

Vegas baby, Vegas! Finally, one last point that has been overlooked by other writers, is there a threat of federal regulation. Cal/OSHA made it very clear that before their proposed regulations can go into effect they must first be approved by the federal OSHA. Which means that, once approved by federal OSHA, these same regulations can be adopted by any other state. In essence, the discussions and the debate, the industry is currently having are extremely important since we may not get another chance to debate these issues.

It is this author’s opinion that once approved and adopted in California, these regulations will eventually be adopted and approved by other states. I would not be surprised to see a push for states such as Nevada, Florida and Arizona to pass similar legislation.

Viva la revolucion! The proposed regulations are over 17 pages long and are quite involved. I have only been able to touch briefly on some of the more important aspects of the proposed regulations. I strongly suggest that everyone read and digest the regulations and try to understand what they will mean to the future of not only California adult entertainment but in general the industry in the U.S.

Will these regulations cause the industry to pack it’s collective bags and find greener pastures elsewhere? Will it cause it to revert back to the pre-Freeman underground days of lore or will it simply cause the studios to treat the performers better and adopt the practices outlined? At this point, no one knows. Whichever it may be, certainly there is a revolution afoot.

July 30, 2012 0

Porn, Privacy, HIPAA – Redux

http://www.xbiz.com/articles/124370/fattorosi

In February, the AIDS Healthcare Foundation took their fight against AIM and the adult industry to the authorities of the federal Office for Civil Rights, a federal agency under the U.S. Department of Health and Human Services that enforces HIPAA, the California Office of Health Information Integrity enforcement Unit and Los Angeles County’s Health Facilities Inspection Division.

Rhett Pardon, of XBIZ, quoting AHF’s letter stated, “The authorization is essentially a waiver of privacy rights that is against public policy,” the letter said, citing Civil Code § 56.37. “Disclosures of testing results pursuant to such an invalid authorization would therefore appear to breach the actors’ privacy rights.”

The U.S. Department of Health and Human Services will now investigate whether AIM has violated California Civil Code § 56.37 as well as federal law. Jeffery Douglas, attorney for AIM, has stated that AIM’s HIPAA release has been vetted by experts in the privacy law and HIPAA and that AIM stands behind its release.

So what happens now and what does this mean to the industry and more specifically to performers and producers of adult content? If the investigation concludes that AIM’s release is too broad, their release may have to be rewritten, limiting who, how and for how long testing results may be disclosed. This may change how the industry handles the issue of testing between producers and performers. Access to testing results by producers may have to be blocked with only performers showing each other test results prior to shooting.

Performers themselves could share testing results with the producers though. There is no restriction on an individual’s rights to share their medical history or test results with whomever they wish.

Obviously, this issue will continue to evolve and everyone must stay informed as to how HIPAA may change how the industry does business. Cal/OSHA will be holding hearings later this month (June 29, 2010) as to the use of condoms on adult sets.

The original article “Porn, Privacy and HIPAA” was published in the summer of 2009 in XBIZ directly after the last HIV outbreak in the industry, however the issues covered in it remain relevant. The following are excerpts from that article.

Within HIPAA are confidentiality provisions of the Patient Safety Rule that prevent, in certain circumstances, the public disclosure of private healthcare information of a patient by a medical provider, health plan and health care clearing houses.

However, HIPAA does not apply to employers. The Privacy Rule does not prevent your employer from asking you information about your health if your employer needs the information to administer sick leave, workers’ compensation, wellness programs, or health insurance. However, if your employer asks your health care provider directly for information about you, your provider cannot disclose the information in response without your authorization.

It should be noted that if your private medical information is disclosed by a medical provider, that medical provider or their employee may face civil as well as criminal liability. A Los Angeles woman was indicted under the federal HIPAA privacy law for accessing the private medical records of celebrity patients at UCLA Medical Center and selling information obtained from those files to a national media outlet. The celebrities whose records were breached reportedly included actress Farrah Fawcett, singer Britney Spears and California first lady Maria Shriver.

The Privacy Rule allows medical providers, such as AIM, to disclose protected health information, without authorization, to a public health agency that are legally authorized to receive such reports for the purpose of preventing or controlling disease, injury, or disability. In this case, the Los Angeles County Public Health Department would be such an agency. Generally, medical providers are required to limit the protected health information disclosed for public health purposes to the minimum amount necessary to accomplish the public health purpose. Unfortunately, HIPAA prevents the public disclosure of those that are infected or who may have been exposed.

However, individual performers that might be afraid that they were exposed could still inquire into the identity of those exposed to determine if they if fact were. Private disclosure in the interest of public health may be allowable. Under the Privacy Rule, a medical provider may disclose protected health information to a person who is at risk of contracting or spreading a disease or condition if other law authorizes the covered entity to notify such individuals as necessary to carry out public health interventions or investigations. For example, a covered health care provider may disclose protected health information as needed to notify a person that (s)he has been exposed to a communicable disease if the covered entity is legally authorized to do so to prevent or control the spread of the disease.

However, performers must be careful about sharing what information they may learn. An infected performer that is “outted” by another individual can file a lawsuit under the common law theory of public disclosure of private facts. If a false report is made as to a performer’s HIV positive status, that performer may have a claim for false light. This is were the plaintiff is placed into a false light in the eyes of the public that may damage their career and cause emotional distress. Obviously, if someone mis-reports that a performer is HIV positive or even exposed to HIV that can cause great distress as well as the lost of a career. Damages for both public disclosure and false light could be extensive.

Overall, in an adult industry that lays its self open to all that consume its product, there is still a need for privacy within the industry.

July 30, 2012 0

Porn, Privacy and the HIPAA

http://www.xbiz.com/articles/113008/fattorosi

How can an industry that bears all to its consumers ever consider privacy to be a hot topic? The story of the possible infection spread rapidly throughout the community and even into mainstream press. I was personally contacted by Los Angeles’s Tribune affiliate KTLA for a quote after the reporters there picked up the story from the Los Angeles Times.

As I write this article, what did not make it into the press were the actual identities of the performers infected or exposed in this most recent outbreak.

Dr. Sharon Mitchell, director of the AIM Healthcare Foundation, declined to make the identities of those performers known, citing confidentiality issues.

What Mitchell was referring to was a rather unknown law within the industry, the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Within HIPAA are confidentiality provisions of the Patient Safety Rule that prevent, in certain circumstances, the public disclosure of private healthcare information of a patient by a medical provider, health plan and health care clearing houses.

However, if your employer asks your health care provider directly for information about you, your provider cannot disclose the information in response without your authorization.

It should be noted that if your private medical information is disclosed by a medical provider, that medical provider or its employee may face civil as well as criminal liability.

Los Angeles woman was indicted under the federal HIPAA privacy law for accessing the private medical records of celebrity patients at UCLA Medical Center and selling information obtained from those files to a national media outlet. The celebrities whose records were breached reportedly included actress Farrah Fawcett, singer Britney Spears and California first lady Maria Shriver.

Many posters on adult message board GFY.com, as well as performers I talked to immediately after AIM reported the outbreak, indicated that they were not pleased that more information was not released. Several performers indicated that they felt as though it was their right to know since they could also become infected.

Unfortunately, until an outbreak such as this becomes a matter of public health, the information must remain confidential. The Privacy Rule allows medical providers, such as AIM, to disclose protected health information, without authorization, to a public health agency that is legally authorized to receive such reports for the purpose of preventing or controlling disease, injury or disability.

In this case, the Los Angeles County Public Health Department would be such an agency. Generally, medical providers are required to limit the protected health information disclosed for public health purposes to the minimum amount necessary to accomplish the public health purpose.

Unfortunately, HIPAA prevents the public disclosure of those that are infected or who may have been exposed.

However, individual performers that might be afraid that they were exposed could still inquire into the identity of those exposed to determine if they in fact were. Private disclosure in the interest of public health may be allowable.

Under the Privacy Rule, a medical provider may disclose protected health information to a person who is at risk of contracting or spreading a disease or condition if other law authorizes the covered entity to notify such individuals as necessary to carry out public health interventions or investigations.

For example, a covered health care provider may disclose protected health information as needed to notify a person that (s)he has been exposed to a communicable disease if the covered entity is legally authorized to do so to prevent or control the spread of the disease.

Other posters on GFY.com indicated that once a performer gained the knowledge of the identities of the infected and exposed individuals they should make it known to the rest of those in the industry.

Some even argued that this was allowable since HIPAA does not apply to individuals that do not have access to the medical records of those infected and or exposed. However, one must be aware that even though HIPAA may not prevent such a disclosure, there are common law torts that can result in a civil lawsuit if certain private facts are disclosed.

An infected performer that is outed by another individual can file a lawsuit under the common law theory of public disclosure of private facts. If a false report is made as to a performer’s HIV positive status, that performer may have a claim for false light.

This is where the plaintiff is placed into a false light in the eyes of the public that may damage his/her career and cause emotional distress. Obviously, if someone misreports that a performer is HIV positive or even exposed to HIV that can cause great distress as well as the loss of a career. Damages for both public disclosure and false light could be extensive.

Overall, in an adult industry that leaves itself open to all that consume its product, there is still a need for privacy within the industry. However, it is apparent that the manner in which this last situation was handled was not to the satisfaction of other performers, directors, agents and producers in the San Fernando Valley.

They felt as though they deserved to know which performers were actively infected and which were on the quarantine list so as to protect themselves. Immediately after the outbreak I talked with numerous performers. Some of which indicated that they would be either leaving the industry, no longer doing boy/girl scenes, or rethinking what sexual acts they will do from this point forward. Lack of information can breed resentment and doubt.

There is little doubt in this writer’s mind that sometime in the future, this issue will once again reappear.

How the industry handles it and what comes to light in the middle of a media storm will affect the industry’s ability to remain autonomous. There has been a push once again to regulate the industry through legislation and public policy. Failure to heed these warnings can result in the regulation of the industry by groups on a national level that do not have the industry’s best interest in mind.

July 30, 2012 0

Wages and Hours: Paying Overtime Correctly

http://www.xbiz.com/articles/109457/fattorosi

With the downturn in the economy, companies are often finding themselves laying off workers in order to save money and meet expenses. As I discussed in a previous article it is often necessary to let a portion of a company’s workforce go in order to cut overhead. With a reduction in force often overtime is necessary. In order to stay within federal as well as state employment guidelines, proper accounting has to be kept to ensure that overtime rates are properly paid. Failure to do so can result in litigation as well as penalties and interest on the unpaid back wages.

In California, nonexempt employees over the age of 18 and any minor employees not prohibited from working in the subject employment shall not be employed for more than eight hours in a workday or for more than forty hours in any workweek unless they are paid the appropriate overtime wages. For nonexempt employees any time beyond eight hours but less than twelve hours in any typical workday, that employee shall be paid at a rate one and one-half times their normal rate of pay. For any work performed in excess of twelve hours in a day that employee shall be paid at a rate equal to double the regular rate of pay. These rules are also typically true for all states within the United States.

There numerous exceptions to the overtime rule though. The main exception is for executive employees. Executive employees are defined as;

Whose duties and responsibilities involve the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision thereof; and
Who customarily and regularly directs the work of two or more other employees therein; and
Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and
Who customarily and regularly exercises discretion and independent judgment; and
Who is primarily engaged in duties, which meet the test of the exemption;
An executive employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

As an executive employee, that particular employee is not entitled to overtime wages. However, in order to meet the criteria of a managerial employee, one must be more than merely a supervisor of two or more employees. The managerial exempt employee must be in charge of the unit, not simply participate in the management of the unit.

There are other exceptions that may apply to your business, however, many are state specific and it is highly recommended that you speak with an attorney familiar with the employment laws of your particular state to stay informed of other exemptions to overtime laws.

One of the most misunderstood areas of payment of overtime laws by employers is whether overtime must be paid to salaried employees. The short answer is yes, depending on whether that employee is exempt or not. Obviously, executive employees that meet the above mentioned requirements are exempt from overtime laws whether they are paid hourly, commissions or salary or some combination thereof. Professional employees are usually exempt as well, i.e., in house attorneys and accountants. All employees, whether hourly or salary, must be paid overtime wages if they are not exempt and work over eight hours a day or forty hours per week.

This is usually where I see the most litigation as an attorney. Most companies realize that hourly employees that work in the warehouse should be paid overtime. Where most companies do not even realize that overtime needs to be paid is in regards to the salaried employees in the company’s offices. Usually what occurs is that a salaried employee is terminated and seeks legal counsel in regards to the termination. As part of the intake process the terminated employee learns that he/she should have been paid overtime but was not. This usually results in a complaint being filed with the labor board administrative court or with a civil court of law.

If a salaried employee needs to be paid overtime the most difficult question for most employers is how to calculate those overtime hours. If you are paid a salary, the regular rate is determined as follows:

Multiply the monthly remuneration by 12 (months) to get the annual salary.
Divide the annual salary by 52 (weeks) to get the weekly salary.
Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate.

In California, if the employee was not paid overtime correctly, according to Labor Code section 203, “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefore is commenced; but the wages shall not continue for more than 30 days.” Thus, not only would the employer be liable for the back wages, but also an additional month of salary after the employee is no longer employed as a penalty against the employer. Obviously, this can be quite costly for the employer.

What if an employee decides that he or she should not be paid overtime wages? Perhaps, the employer is a small family run company and one of the employees decides that as a matter of sacrifice to keep their job and to help the employer during tough economic times, they will waive their rights to overtime wages. In California, even if they do so in writing, that does not mean that later that same employee, when terminated, cannot come back and make an overtime claim against the employer. An employee cannot waive their rights to overtime or even minimum wage.

It is imperative that employers understand wage and overtime laws so that they may protect themselves from post termination or lay off claims. Ignorance of the law or a lack of intent is not a defense to wage claims nor is it a defense that the employee volunteered and agreed to waive their rights to overtime. Improperly paying your employees is a ticking time bomb waiting to explode in regards to your employment issues. There have been numerous class action lawsuits filed against large institutional employers for failing to classify employee correctly. In tough economic times the instances of employment litigation usually increases as employees are laid off or terminated. Again, it is recommended that before an employee is terminated or laid off that all employers seek the advice and counsel of an experienced attorney in employment law.

July 30, 2012 0

The Hiring Process

http://www.xbiz.com/articles/108476/fattorosi

In my last article, we discussed the potential legal problems with terminating or laying-off employees. However, one of the best ways to prevent legal pitfalls is to screen and hire your employees well. Often termination issues can be resolved in the screening process.

Too often, employers do not avail themselves of the recommendations made by former employers. One of the best tools to determine whether a candidate would be a good fit for your organization is to ask that candidate’s former employer.

However, you do have to be careful in the types of questions that are asked. You can certainly ask if the former employer would recommend your candidate for the position they have applied for. You may also ask the former employer to describe the candidate’s skills in regards to the employment relationship. You may also confirm length of employment.

What you do not want to ask are questions about the candidate’s personal life, family, sexual orientation, health, issues with worker’s compensation claims or benefits, issues with any possible prior litigation against the former employer, as well as any information pertaining to the candidate’s religious, political or social views.

If you deny a candidate employment and that candidate does instigate a discrimination lawsuit, the less information you have in regards to the their personal life, health issues, as well as their views and prior history unrelated to their ability to perform the essential functions of the position offered the better for your defense of the matter. Now this is not to say, that you cannot look at your candidate and make a determination that they would not be a “good fit” within your organization. Obviously, personality can sometimes be more important that skills, depending on the job, for example, a sales position or even a receptionist’s position.

I do recommend that you do some basic background research as to your candidate though. If your candidate is in their twenties or thirties in age, it is more than likely that they may have a Myspace page. That page may be very telling as to that candidate’s personality. You can find out what music they listen to, what their favorite books are, what their favorite television shows are. You can also see who they are friends with in your organization and may even be able to read some of their blog posts.

Certainly, Myspace will not give you all the information as to someone personality. It can be a mirror into their lives. Obviously, this seems to contradict my previous comments on what you should know about your potential candidate. The difference is that you should not be asking a previous employer for potentially private information about a candidate, however, if that candidate has openly disclosed this information for the world to see on their Myspace page that is a completely different situation.

Obviously, an employer cannot discriminate in regards to the hiring of a potential candidate based upon a protected class such as race, national origin, religion, shade of skin color, age, sex, sexual orientation, pregnancy status, medical disability and or sometimes even English language skills according to case law interpreting Title VII (Civil Rights Act of 1964).

Questions pertaining to any of these protected classes would be highly improper during the interview process. As an employer interviewing a candidate you want to avoid question about religious holidays, what country they or their ancestors are from, how old the candidate is and whether they have any medical disabilities. And as difficult as it maybe, if your candidate does volunteer information about such topics, that information cannot be used to deny a position to them.

You would also be well advised to stay away from any questions dealing with drug use or drug dependency. Preemployment drug testing is still an emerging issue in the law. Even cities such as San Francisco have passed ordinances barring drug testing of certain employees or for certain reasons.

Therefore, it is highly recommended that before you decide to insert a pre-employment drug screening into you hiring process that you consult with a local attorney that is well versed in employment law. Asking someone to reveal their medical history as a condition to seeking employment is legally risky for the employer. Remember that your candidate may have to reveal their use of a doctor’s proscribed medication that could show up in their test results, thus revealing an underlying serious medical condition.

It certainly appears that an employer’s hands are cuffed when it comes to screening potential candidates. Realistically, that is certainly true when it comes into investigating more than their abilities to perform the job duties of the position they are applying for.

However, it is certainly recommended that you carefully review their resume for inconsistencies. Perhaps there is a gap in their resume where they did not appear to work for several years. Obviously you can inquire as to that issue. They may not have listed references. As stated earlier, you should talk to every reference listed. If for some reason your candidate did not list their last employer as a reference you can inquire as to why they were not listed as a reference.

It is also highly recommended that you require some sort of writing sample from your candidates in your employment advertisement. A writing sample can speak volumes about a potential candidate. You may also give the candidate several tests during the interview, i.e., typing tests, mathematical tests, spelling and grammar tests, as long as those tests will have a direct correlation to the job duties they will be performing. Further, those tests will have to be administered to each person interviewed.

July 30, 2012 0

Dealing With Your “Former”

http://www.xbiz.com/articles/106291/fattorosi

One of the most hotly litigated areas of law in hard economic times is employment law, and more specifically, the termination of employees. Often, based on the pure realities of the situation, companies must downsize in order to remain competitive. However, in order not to fall into a situation that could result in potential litigation with a terminated employee, basic employment laws and regulations must be adhered to.

Before one can discuss the termination of an employee, it is first important to define what an employee is. In California, Labor Code Section 3357 controls the issue of whether someone is an employee. However, this is a rebuttable presumption, and the actual determination of whether a worker is an employee or independent contractor depends on a number of factors.

In short the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons Inc. vs. Department of Industrial Relations (1989) 48 Cal.3d 341 has set forth the factors used to determined whether an one is an employee or an independent contractor. In regard to the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered has control or the right to control the worker both as to the work done and the manner and means in which it is performed. If not, then the person may be considered an independent contractor.

Assuming that the person terminated is an employee, it is important to keep in mind that California is an “at will” employment state. This basically means that anyone can be fired at any time for any lawful purpose, if there is no employment contract. However, no one can be terminated based upon a protected class — race, color, religion, national origin or sex as well as age and disability. Disability also includes pregnancy.

If an employee is to be terminated for cause — meaning that the termination is based on performance issues of that employee — and the employee fits into one of the protected class, it is imperative that the employer document the performance issues completely before any such termination. Often, verbal warnings are not sufficient, and it is necessary to document the employee’s performance or insubordination issues well in advance of the termination. Without such written warnings employers can find themselves in a defensive position attempting to explain why the employee’s termination was not a result of discriminatory termination practices.

If the employee is to be terminated without cause and his/her termination is due to the economic business realities of the company’s current financial situation, it is more difficult to document the need to lay off the employee. It is recommended that, if possible, layoffs be conducted in groups and not of single employees. If a layoff occurs in group fashion, it will be easier for the employer to justify the layoff of anyone who might be one of the protected classes.

Now that the employer has terminated or laid off the employee, is the relationship concluded? The simple answer usually is no; even if the employee has been terminated for cause, the employer still might have to defend a wage, hour or overtime claim in front of the Division of Labor Standards and Enforcement. The former employee also might file a claim for unemployment insurance benefits.

How this next step proceeds usually depends on why the employee was terminated, how the employee was terminated and whether during the employment the employer properly classified and compensated the employee.

If the employee was terminated without cause and was laid off, they would be entitled to benefits through unemployment insurance. If the employee was terminated for cause, he or she still might file an unemployment claim; however, if the employer has documented the employee’s poor performance or insubordination, the claims can be challenged and often defeated in an administrative court.

If the employee was not properly paid for overtime, meal breaks or for their overall compensation, that employee can file a wage and/or overtime claim with the Labor Board or directly with a court of competent jurisdiction. If litigation does ensue, it often can be costly for the employer. Therefore, it also is imperative that employers keep accurate records and time slips during the employee’s term of employment. Again, as with any litigation, the most important aspect to remember is to document, document and document some more. Accurate time slips including break times are necessary to defend any claims of improper payment of wages.

A quick note about the classification of employees: Overtime at a rate of one and a half times their usual pay rate must be paid if an employee works more than eight hours per day, whether that employee reaches 40 hours per week or not. This is a recent change in the law. It use to be that overtime would not be due and owing to an employee until after that employee reached 40 hours worked in a calendar week. If an employee is a supervisor and has at least two other subordinate employees under their direct control, they can be classified as managers and not be paid overtime. Whether an employee is an hourly or salaried employee is immaterial to whether they need to be paid overtime.

It also is important to note that most states require that a terminated or laid-off employee be provided their last paycheck within a certain amount of hours and or days from the date of the separation. Therefore, it usually is advisable to provide the former employee with all wages due at the time of the actual notice of separation.

Obviously this article is not exhaustive as to the legal requirements involved with the termination and layoff of employees. Nor is it complete as to the classification of employees or payment of overtime wages. It is strongly recommended that any company seek the advice and counsel of both an attorney well-versed in employment law and a specialist in human resources.

Often, many of the problems with the termination of an employee can be solved in the hiring process. Knowing whom to hire and not hire often is the best defense against possible future claims and lawsuits. Choosing the right potential candidate(s) is a minefield that has to be navigated carefully. Just as with termination, discriminating against certain potential candidates can lead to claims of discrimination and potential litigation.

July 30, 2012 0

A Look at Workers’ Comp – Part II

Written by Joanne Cachapero

http://www.xbiz.com/articles/23718/fattorosi
The “mainstreaming” of adult may mean wider markets and increased revenue to some content producers. For performers, going mainstream promises recognition and legitimacy beyond being stereotyped as a mere adult star.

Even as the adult business environment becomes more corporate, few are ready to consider what effect mainstreaming will have on the way business is conducted. In an industry that, for the most part, operates under the radar and has been largely self-regulated, can standard business models and practices ever replace what is aptly described as a “Wild West” mentality?

Presumably, most major adult multimedia corporations and larger studios have had to integrate basic business practices in order to minimize potential risks and maximize their ability to expand into highly visible positions in the marketplace. Performers interested in tax advantages may choose to incorporate and become “employees” of their own companies.

In a January 2007 article appearing in the San Francisco Chronicle, Kink.com CEO/founder Peter Acworth was quoted saying, “We have a clean and safe work environment, the models are well-paid and they are explicitly covered by workers’ comp.”

Acworth was defending his multimillion-dollar web-based company against accusations that female performers were being exploited, an attack made by community activists opposed to Kink.com’s purchase of the San Francisco Armory Building for use as a production studio/office location.

Industry labor attorney Michael Fattorosi’s philosophy is that, in a business still largely viewed by the mainstream as somewhat disreputable and illegitimate, observing standard business practices, as well as state and federal regulations, is the best defense against an anti-porn offense.

In an earlier interview with Fattorosi several months ago, he discussed the issue of employee vs. independent contractor. This time around he points out the legal advantages of providing workers’ compensation insurance coverage to employees. He also discusses his thoughts on worst-case scenarios and where the industry is headed.

XBIZ: Explain the basic legalities behind providing workers’ compensation coverage for employees.

Michael Fattorosi: To operate a business here in California is illegal without having workers’ compensation insurance. So, to actually hire someone that is not a family member, or your wife, or a partner or principal in the business — hiring an employee and not providing them work ers’ compensation insurance could be a felony and is definitely a misdemeanor.

You’re also subjected to fines if you’re caught by the Department of Industrial Relations not having workers’ compensation insurance. And you’re subject to what’s called a lockout or a shutdown. They’ll come in and shut down your place of employment until you secure the necessary workers’ compensation insurance and you prove to them that you now have and are covered for work comp injuries.

Once you have workers’ compensation insurance, there’ll be a question as to whether or not this is a covered employee. That’s a different issue. Once you have a policy in effect, what it does then is, if somebody tries to file a workers’ compensation claim, you now have something protecting the employer called ‘exclusive remedy.’

In California, if you don’t have workers’ comp insurance, that employee can then also sue you in civil court where they will be able to recover punitive damages and the exposure on that company will be much higher in civil court than it would be in a workers’ compensation court.

In workers’ compensation court, the employee doesn’t have to show the employer was negligent. If it happens at work, it’s work-related. You don’t have to prove negligence. You don’t have to prove that the employer did something wrong. It could be a simple trip and fall, with nobody at all negligent and that would still be a covered claim.

XBIZ: Should companies expect to pay more for coverage because of the nature of the business? Will there be insurance carriers that don’t want to write policies for adult-oriented businesses?

Fattorosi: Yes. There are brokers that won’t want to deal with it, and there are lines and insurance companies that won’t want to insure for the risk.

But in California, we have the benefit of what’s called State Compensation Insurance Fund, which is a governmental agency that’s quasi-private, quasi-public, which provides insurance as a last resort. So, if you can’t get insurance anywhere else, they have to insure you, if it’s a legal business. Adult video production in California is a legal business according to [the Freeman decision]. So, SCIF has to provide insurance for workers’ compensation for adult companies.

There are risky jobs and you’re going to pay more. Of course, I think, just like anything else, the more safety measures that you have in line for your employees; the less you’re going to pay. Put it this way; you can cover stunt men and stunt women for workers’ compensation. There are extremely dangerous jobs that get covered, so I don’t think it’s a matter of not being able to cover adult performers.

XBIZ: What do you think is preventing the state of California from just going ahead and mounting investigations and auditing people now?

Fattorosi: Time and money.

XBIZ: What do you think it will take for them to start investigating?

Fattorosi: One more HIV outbreak. I imagine, after the last HIV outbreak there was a movement in Sacramento to require condoms, to change testing procedure. And I think with the next HIV outbreak — God forbid if there is one — that depending on the political climate at the time, that will cause people to spring into action about this. And they’re going to look at workers’ compensation, they’re going to look at Cal-OSHA, and they’re going to look at the Department of Industrial Relations.

The reason that I brought this up is because everybody talks about 2257. Everybody talks about obscenity as a way for the government to shut down the industry.

Simply not having workers’ compensation insurance is another way that if George Bush and the Republicans in Washington wanted to call up Arnold Schwarzenegger and the Republicans in Sacramento and exert a little political pressure, [they would] say, ‘We have an inside way of going after these people on a state level.’

XBIZ: The industry has been operating in the same manner for a long time without really having to address these issues. What makes you think that they need to be addressed now?

Fattorosi: I have a lot of experience representing Fortune 500, large corporations — defense contractors, major studios — and when I saw the business practices used in the adult business, I said to myself, ‘There’s a lot of room for education and growth here,’ and [for me to] be able to take this industry from a wild, wild west mentality to a more corporate America mentality.

I think that from a standpoint of sales, from profitability and from growth, that as the industry matures, as it becomes more corporate, it’ll become more widely accepted. When you have a situation where people are buying films or buying video clips, where they believe that the performers are unfairly treated and being demeaned, being abused, and being taken advantage of, you have a smaller base of prospective customers.

When you have a performer that has an attorney, an accountant, her own production company — we can use Jenna Jameson as an example — I don’t believe that anybody believes that Jenna Jameson is an abused, taken-advantage-of performer. I see her as a savvy businesswoman and as almost a mainstream performer. And you feel better about buying into a situation like that as a consumer.

I come at this from an attitude of taking 10 years of experience, in regards to representing major corporations and, trust me, I’ve done the same things with major corporations and told them basically, when you go into court, whether it’s on a workers’ comp issue or whether it’s on a civil issue, you want to be the guy wearing the white hat. Already, from the standpoint of producing adult content, you’re gonna be the villain — so the less villainous you are, the better off you’ll be. So if you do things right, you will 1) have a better time in your business practices, and 2) if you do end up in court, you’ll be a much better defendant than if you didn’t do things properly.

What’s going to happen is that you’re going to end up in front of an audience that doesn’t believe in the wild, wild west mentality. They’re going to be your average citizens and for the most part, while I think that people in California tend to be somewhat progressive — they are also somewhat fair.

XBIZ: Are you afraid people in the industry will question why they need this type of business advice or that you may be perceived as an attorney who is trying to churn up business?

Fattorosi: Again, I like to give my clients legal advice, as well as practical advice. And I know there are a lot of attorneys who don’t like to do that. A lot of attorneys like to give very esoteric, convoluted advice where, when you’re done talking to them, you don’t know any more than you did before you went in there.

I’m not that type of attorney. I come from a blue-collar background. I come from a father that owned a small business, and so I listened to my father’s conversation with attorneys and I saw how he reacted to it. And I’m not trying to create a situation within this industry where I profit. Everything that I’m telling you, if they listen to what I have to say, I won’t profit from it — because this is preventative medicine.

I’m trying to be very careful in posing this issue in that way. ‘The world is going to come to an end!’ The world is not going to come to an end, OK? The industry has been doing it a certain way for so long, and they will continue to do it for a certain way for so long.

But what will end up happening, and this I can almost guarantee, is that at some point, something is going to happen, whether that’s another injury, an HIV outbreak, a special report by a news station, the federal government taking a look at this, a state governmental agency taking a look at this — something is going to happen at some point where there’s going to be more interest in this issue and it could be detrimental for the industry.

This really comes from a sense of trying to protect the industry as opposed to trying to profit from the industry.

July 30, 2012 0

A Look at Worker’s Comp – Part I

Written by Joanne Cachapero

http://www.xbiz.com/articles/80446/fattorosi

When attorney Michael Fattorosi draws a parallel between workers in the adult industry and migrant day laborers, he isn’t comparing pile driving to picking apples — or is he? Because whether an actor suffers a slipped disc while performing on set or a farm worker cracks his head open by falling off a ladder, Fattorosi wants all to know that, as employees, both are entitled to file a claim for workers’ compensation benefits.

An industry lawyer and managing partner at Fattorosi & Chisvin, Fattorosi isn’t the first attorney to comment on the “independent contractor vs. employee” issue for those working in the adult industry.

In June 2004, following the HIV outbreak that caused a two-month, self-imposed industry moratorium, industry lawyer and Free Speech Coalition Chairman Jeffery Douglas was quoted in an article for the San Fernando Valley Business Journal, saying, “The vast majority of the 1,200 people that make a living performing in the movies are not employees, they are independent contractors.”

More recently, attorney Clyde DeWitt was quoted in a September article posted on AVN.com saying, “The greatest temptation for businesses that are new and/or small is to classify employees as independent contractors.” He went on to state that employers “must have workers’ compensation insurance.”

Unlike Douglas or DeWitt, who specialize primarily in 1st Amendment and obscenity law, Fattorosi’s practice is based in labor law, with a specialization in workers’ compensation issues. And while any issue is debatable, particularly amongst lawyers, Fattorosi cites specific case law and other legal references to back up his assessment of adult industry workers as employees.

The debate was brought into sharper focus after the 2004 HIV outbreak in which Evasive Angles and TT Boy Productions were cited and fined $30,560 for noncompliance with Cal/OSHA’s blood-borne pathogens standard. In effect, Cal/OSHA determined the infected performers to be employees and was, therefore, able to fine the companies for failure to comply with pathogen standards, failure to report a serious work-related illness, and failure to prepare a written injury and illness prevention program.

Following the incident, Cal/OSHA established safety standards pertaining specifically to the adult industry. Those standards, posted on the Cal/OSHA website, clearly state “Even workers who are paid as independent contractors may be considered employees under the law. The Division of Labor Standards Enforcement (DLSE) provides guidance for determining whether someone is an independent contractor.”

The DLSE website states that each claim is considered on a case-by-case basis and that “there is no set definition of the term ‘independent contractor.'” However, it also says the “DLSE starts with the presumption that the worker is an employee” and that “the most significant factor to be considered [when determining employee status] is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed.”

Because production companies and content producers retain what is called “pervasive control over the operation as a whole,” according to Fattorosi, that implies an employer/employee relationship and, as such, the employer is obligated to provide workers’ compensation insurance coverage in the event of a work-related injury or illness.

Fattorosi has been vocal within the industry on the topic; most recently, he has been slated to co-host a talk show, “Breaking the Law,” for Internet station Prime Time Uncensored and has begun posting informational articles and industry news on his law firm’s own website. He sat down for an interview with XBIZ Video. Part 1 examines the concept of employee vs. independent contractor.

XBIZ: Explain the difference between an independent contractor and an employee.

FATTOROSI: For purposes of an article, it is a very complex type of situation. And you’re also looking at different standards for different uses. The IRS may have one standard, the California Department of Industrial Relations may have a different standard, and of course, the civil courts may have yet even a different standard.

We’ll talk about it from a broad standpoint first. If you have the ability to control that particular person that you hire — and what I mean by control is tell them when to show up, where to show up, what to wear; if you provide tools necessary for them to complete whatever you hire them to do, if you require them to take breaks at certain times — this tends to go towards an employer/employee relationship.

The best example I can use is if you needed to paint your home and you decided you’re going to hire a painter. You went to the phone book and you called up Bob the Painter. Bob has an ad, and in that ad Bob is a licensed and bonded painter because part of his profession requires licensing and bonding, which requires him to have a certain standard of care and work and diligence in what he does. It also requires him to have workers’ compensation insurance for his employees. Well, if you call Bob the Painter, he comes out to your house and he asks, “What color do you want to paint the house?” You get to select a color.

Other than that, Bob pretty much does everything. He schedules the job around when he is available. Bob tells you how long it will take. Bob brings his own equipment and his own workers, possibly. And at the end, usually you pay half in front and half at the end when the job is completed to your satisfaction. In that particular situation Bob would be an independent contractor.

Now, if you decided that Bob’s price was too high and you wanted to still paint your house, and you went down to the Home Depot and you bought the paint and the drop cloths, and you bought the scaffolding, the brushes and the paint trays — and then, at the corner next to the Home Depot, there are several day laborers standing there and you decided to hire those day laborers on to come paint your house — they would be considered employees.

Now, if Bob gets hurt while painting your house, Bob can’t file a claim against you because he’s an independent contractor. If one of those day laborers happens to fall off the scaffolding and hurt himself, he can file a claim against your workers’ compensation insurance carrier. Most people don’t realize that every homeowners insurance policy comes with a workers’ compensation rider for household employees.

XBIZ: The adult industry has been operating for a long time without necessarily observing standard business practices or legalities, operating on the premise that performers and crew people are independently contracted. Do you feel the state of California, at this point, recognizes adult performers as employees?

FATTOROSI: You’re assuming that they haven’t up to this point.

XBIZ: Well, it doesn’t really seem like the state is running out to investigate potential violations.

FATTOROSI: California’s a big state and it’s got budgetary limitations and they’ve got a lot of industries in California. A lot of industries are also in the same boat. For a good number of years, migrant farm workers were also treated as independent contractors, or tried to be treated as independent contractors.

I mean, in workers’ compensation law there are a lot of little tiny niches and glitches and ways to look at the law; it would be amazing if most people understood it. Most attorneys don’t understand workers’ comp and certainly most employers don’t, but I’ve been representing [employers] for more than a decade.

I don’t think the state of California looks or has now started looking at this particular industry yet. I know when I was up in Sacramento with the Free Speech Coalition for Lobbying Days, one of the things that I heard often from the legislative aides or the legislators themselves was when was the industry going to start treating the actors and performers in a manner more accustomed to that of an employee?

They didn’t use those specific terms, but they also talked — a couple did mention workers’ comp, some did mention health benefits. So the prevalent attitude in Sacramento is that the industry has to do something for these people and stop making them “throwaway” employees.

California, by nature, has always been a very pro-employee, anti-employer state. Especially with the [mainstream] entertainment business also residing here, no one on that side wants a precedent set on the adult side to be detrimental to their business.

The state of California has gone a long distance in protecting performers — misappropriation of likeness is another where the state Legislature has gone. They protect performers in this state. And when they use the word “performer” or “actor” or “actress,” they don’t have a little footnote that says, “only mainstream.”

So what this industry, I think, has failed to do is to see how it’s done in the mainstream world and try to put into place those standard business practices of the mainstream industry in the adult industry. I think this industry is ignoring the fact that they are employees, not the state of California.

The best way to look at this is there was an HIV outbreak in the industry several years ago. Cal/OSHA came in and they fined those companies for not having the proper procedures in place. And while a Cal/OSHA review is not the same as a workers’ compensation review or a civil court review, it does lead me and probably anyone else in this industry with a background in workers’ compensation to think that all of those actors and actresses involved have valid workers’ compensations claims, because they were basically deemed “employees.”

XBIZ: Is there an advantage to having employees as opposed to independent contractors?

FATTOROSI: You’d rather have the employee be an employee than an independent contractor.

At the end of the day, if they are an independent contractor, that means they can sue you civilly, which will provide a much higher reward than to an employee seeking workers’ compensation. In fact, getting workers’ compensation benefits limits your actors, your stage and crew people to what they can recover. Not having it opens the door for them to sue you civilly.

No employee wants to be considered an employee because it limits the amount of benefits they recover. Everybody would want to be an independent contractor because then you could sue your boss for literally hundreds and thousands of dollars in punitives — pain and suffering, all of that — so you want these people to be employees.

That’s the message that has to get across to the studios, that you don’t want them to be independent contractors. Saying that they’re independent contractors opens you up for a lot higher amount of damage than you would worry about if you were paying workers’ compensation benefits.

In part two of our interview with Michael Fattorosi, he talks about the benefits of workers’ compensation insurance coverage, adult vs. mainstream business models and the potential scenarios that might spur state regulatory agencies into investigative action.

July 30, 2012 0