David J. Fishman, Kate LaQuay and Todd B. Scherwin Share Insights on Labor & Employment Law

The Labor & Employment Law Roundtable is produced by the LA Times Studios team in conjunction with Ballard Rosenberg Golper & Savitt, LLP; Fisher & Phillips LLP; and Munck Wilson Mandala, LLP.

With the many unprecedented operational changes and adjustments that businesses in every sector have had to make over the last few years, a whole new landscape has emerged in terms of labor and employment issues. This has left even the most seasoned human resources and C-suiters struggling to find answers to crucial questions, not to mention the confusion among employees themselves.

Are the changes that have emerged trend-driven or here to stay? What should management be focusing on in terms of new standards and laws on employee relations? What do employees need to know?

To address these issues and concerns, as well as many other topics pertaining to labor and employment hot buttons, the LA Times Studios team turned to three uniquely knowledgeable experts for their thoughts and insights about the most important, need-to-know trends and updates – and to get their assessments regarding the current state of labor legislation, the new rules of hiring and firing, and the various trends that they have been observing in general from both sides of the table.

Q: What are the biggest labor and employment law trends businesses need to be aware of in 2026?

(Brad-Kevelin)

Todd. B. Scherwin, Regional Managing Partner, Fisher & Phillips LLP: While federal labor and employment policy may continue to shift depending on changes in administration priorities, employers should not expect those shifts to significantly slow enforcement activity at the state level, particularly in California. In 2026, California employers, especially those operating in Los Angeles, should continue to anticipate aggressive enforcement from the Labor Commissioner’s Office, ongoing wage and hour litigation, and a steady stream of Private Attorneys General Act (PAGA) claims. Even with recent reforms intended to streamline PAGA actions, the statute remains a powerful tool for plaintiffs’ attorneys. Additionally, scrutiny around bonus pay and regular rate issues continues to be a key focus for regulators and plaintiffs alike. Workplace safety enforcement and evolving requirements around employee protections are also expected to remain priorities. Given this environment, employers should regularly review and update their policies and practices.

Q: Wage and hour claims continue to dominate litigation. What are the most common mistakes employers are still making?

Kate LaQuay, Managing Partner, Los Angeles Office, Munck Wilson Mandala, LLP: No one who has an hourly California employee is immune from costly wage and hour litigation. In fact, businesses sometimes are sued even when they believe they have no hourly employees (for example, because they contract with staffing agencies to assign them “temporary” workers). The worst thing a company can do is assume it won’t happen to them. If anyone is performing work for you in California, you should take steps to mitigate your risk before you’ve been targeted. At a minimum, I recommend periodic reviews of your policies and timekeeping and payroll practices. Having an enforceable arbitration agreement that includes a waiver of class claims is also important.

David J. Fishman, Partner, Ballard Rosenberg Golper & Savitt, LLP: Wage and hour litigation in California isn’t being driven by novel legal theories – it’s being fueled by everyday compliance failures. The most common mistakes remain: misclassification of employees as independent contractors or exempt; failure to properly calculate the regular rate of pay when bonuses, commissions or stipends are involved; and inconsistent meal and rest break practices that are not accurately recorded or paid. We also continue to see technical wage statement errors triggering significant penalties, particularly in representative actions under PAGA. And while final pay and expense reimbursement issues may seem minor, they routinely create outsized exposure. Perhaps most critically, many employers still lack reliable timekeeping and record systems. In litigation, that gap often shifts the burden – and the narrative – against them. In today’s environment, strong compliance is not about intent; it’s about disciplined, defensible systems.

Scherwin: Wage and hour laws continue to pose significant challenges for employers, from increasingly complex compliance requirements to the risk of high-stakes litigation. In California, this most often takes the form of wage and hour class actions and Private Attorneys General Act (PAGA) claims. One of the most common mistakes employers still make involves unclear or poorly implemented policies related to employee pay, particularly meal and rest period compliance and regular rate issues. These issues remain among the most frequently alleged violations in Los Angeles and throughout California. Employers should ensure their wage and hour policies are clear, consistently applied and regularly reviewed. Many companies should also consider whether implementing arbitration agreements may help mitigate the risk of wage and hour class actions. Additionally, following the PAGA reform legislation enacted in summer 2024, employers have greater opportunities to reduce exposure by proactively auditing their practices and promptly correcting any compliance issues before they develop into litigation.

Q: What should companies know about meal and rest break compliance, particularly for hybrid or remote teams?

Fishman: Meal and rest break compliance does not disappear in a hybrid or remote workplace – it gets harder to manage. California law still requires duty-free, timely breaks, and employers remain responsible for ensuring they are actually “provided.” The biggest risk for remote teams is informality. Without structured schedules or reliable timekeeping, breaks become irregular, late or skipped altogether. That creates exposure not only for missed premium pay but also for derivative claims, like wage statement penalties and waiting time penalties. Employers should focus on systems, not just policies: clear written expectations, compliant timekeeping that captures meal periods and attestations confirming employees were relieved of duty. Training managers is critical – subtle pressure to stay “online” can undermine compliance. The takeaway is simple: Flexibility cannot come at the expense of accountability. If employers are not able to demonstrate compliant breaks, they’re assuming the risk.

Q: What are best practices for conducting internal investigations while minimizing legal exposure?

LaQuay: Investigations should further two purposes: finding out what happened and creating a record that the investigation was thorough. The Court of Appeal said it best, “Any investigation can be criticized, and a plaintiff can always assert that more should have been done or done differently” (Jameson v. PG&E, 16 Cal.App.5^th 901). That said, it may be easier to knock down challenges if you: choose a qualified, impartial investigator; memorialize the complainant’s report and details obtained from the complainant; promptly interview the accused and witnesses; summarize the interviews; save all documentation relied on by the investigator; and create a report of findings, including as to the credibility of the complainant, the accused and all witnesses. Employers also must consider remedial actions (when appropriate) and be mindful of their legal obligations relating to confidentiality, retaliation and updating the complainant.

Q: How are harassment and discrimination claims evolving, and what does “best-in-class” prevention training look like today?

Scherwin: Harassment and discrimination claims continue to evolve every year. Plaintiffs’ attorneys increasingly pair traditional allegations with related claims, such as retaliation, sexual harassment, failure to prevent harassment or discrimination, and wage and hour violations. Complaints are also arising more frequently in remote and hybrid environments, including issues tied to digital communications, workplace chat platforms and conduct outside the traditional workplace that still affects working conditions. Employees are also more willing to report concerns earlier, and claims often reflect broader workplace culture issues rather than a single incident. To help prevent harassment and foster a positive culture, employers should implement clear zero-tolerance policies with detailed examples and reporting procedures. These policies should be reinforced through onboarding, regular reminders and visible leadership support, and employers should consider reporting mechanisms, like hotlines, to better protect themselves. Additionally, recent California court decisions limiting arbitration of sexual harassment claims due to the Ending Forced Arbitration Act make strong prevention policies even more critical.

Q: How should employers document performance issues to protect against wrongful termination claims?

Fishman: To defend against wrongful termination claims, documentation needs to be consistent, contemporaneous and tied to legitimate business reasons – not created after the fact. The most effective records clearly describe the performance issue, reference objective expectations and show that the employee was given notice and an opportunity to improve. Common mistakes include vague write-ups, inconsistent enforcement across employees or documentation that appears only after a complaint or protected activity. That can undermine credibility and suggest pretext. Employers should train managers to document in real time, avoid inflammatory language and stick to observable facts. Performance reviews, written warnings and follow-up communications should align with company policies and past practice. In litigation, the question isn’t just what happened – it’s what the records show. Well-kept documentation can make the difference between a defensible decision and a costly dispute.

Q: Employees are becoming more comfortable using AI. Is that making things better or worse for employers?

LaQuay: Both. Businesses are benefiting from employees’ increased efficiency, but some employees are using AI in ways that cause collateral damage. First, AI’s confirmation bias tends to reinforce individuals’ perceptions, including with respect to their “rights” and employers’ “obligations.” It can be challenging to explain to a layperson why AI’s response to their prompt about a legal question may be incomplete, inapplicable or just wrong. Free access to generative AI also makes it quick and easy for employees to write reports of perceived harassment or other mistreatment, advocate for specific accommodations they want, send their own demand letters and, in extreme cases, represent themselves in litigation. Pro se litigants can generate motions in minutes, which drives up defense costs and causes delay.

Q: What are the legal risks associated with using AI in hiring, performance evaluations or workforce monitoring?

Scherwin: As employers increasingly adopt artificial intelligence (AI) to streamline hiring, evaluate performance and monitor productivity, particularly in remote and hybrid workplaces, legal risks are becoming more significant. AI tools can help employers efficiently screen large applicant pools and analyze workplace data, but they must be implemented carefully to avoid compliance issues. One of the primary concerns is bias and discrimination. Because AI systems are trained on existing data, they may unintentionally replicate or amplify historical biases. For example, resume screening tools may disadvantage candidates with employment gaps, including women returning to the workforce, while tools that analyze speech patterns, facial expressions or language use could create risks for individuals with accents, disabilities or other protected characteristics. Due to the increasing number of lawsuits around AI bias, Fisher Phillips recently announced a collaboration with BLDS and SolasAI to provide clients with a comprehensive approach to AI risk management and bias audit services. Privacy and data collection present additional risks. Employers using AI-driven tools must ensure compliance with applicable federal and state privacy laws and be transparent about how employee or applicant data is collected and used. To mitigate risk, employers should regularly audit AI tools, maintain human oversight in employment decisions and ensure that technology is used in a fair, transparent and compliant manner.

Fishman: AI is quickly becoming part of everyday business operations, but many employers are adopting it faster than their compliance frameworks can keep up. In California, the risk is not just about technology – it’s about how it’s used. Automated decision-making in hiring, discipline or productivity tracking can raise concerns under discrimination, privacy and wage and our laws. A common mistake is treating AI outputs as neutral. If the underlying data or application is flawed, it can replicate bias or lead to inconsistent decisions. Employers should also be cautious about monitoring tools that track remote employees, which can implicate privacy rights. The key is oversight. AI should support – not replace – human judgment, with clear policies, audits and accountability built in from the start.

LaQuay: It goes without saying that employers can’t discriminate against applicants or employees based on their protected traits (or the combination of protected traits). Last year, California’s Civil Rights Department developed new regulations concerning employers’ use of AI in making employment decisions. As you’d expect, the regulations confirm that businesses cannot use “an automated-decision system” that treats people differently based on their protected traits – for example, by expressing “a preference” for individuals having (or not having) those traits. What you might not realize is that an AI hiring tool might discriminate against people in a protected class because of the way it “analyzes an applicant’s tone of voice, facial expressions or other physical characteristics or behavior.” Before you adopt an AI applicant screening tool, I recommend that you evaluate whether the tool creates exposure on that basis or other theories of liability.

Q: With California expanding protections around leave and accommodations, where are employers most often getting tripped up?

Fishman: Many employers struggle not with the concept of providing leave or accommodations but with how to manage them in practice. The most common missteps involve failing to engage in a timely, good-faith interactive process; overlooking overlapping obligations under laws, like CFRA, FMLA and state disability regulations; and applying rigid policies where flexibility is required. Problems also arise when managers treat requests informally – handling them off the books or delaying HR involvement – which can lead to inconsistent outcomes and legal exposure. Documentation is key. Employers should clearly track requests, communications and decisions. Ultimately, compliance here is less about saying “yes” or “no” and more about showing a fair, individualized process. In California, how an employer handles the conversation can matter just as much as the final decision.

Q: How are disability accommodation and mental health leave requests changing employer obligations?

LaQuay: I’m seeing a dramatic increase in requests to accommodate neurodivergence. Broadly speaking, a neurodivergent employee is someone who thinks or perceives differently. Neurodivergence may or may not be linked to a specific diagnosis, and so it can be more nuanced than physical limitations on a person’s ability to lift/carry or sit/stand. By some estimates, about 20% of us are neurodivergent. Unless managers and HR understand neurodiversity, including how it may present and what types of support might be helpful for neurodivergent employees, employers risk failing to fulfill their obligation to engage in an interactive process to consider potential reasonable accommodations. Employees may not self-identify as “neurodivergent,” so employers should think critically whenever someone shares that they struggle with concentration, time/workload management or organizational skills.

Q: How should employers approach religious or political expression issues in the workplace, especially in a polarized climate?

Scherwin: Employers should approach religious and political expression issues with a balanced strategy that respects employee rights while maintaining a respectful and productive workplace. In private workplaces, the First Amendment generally does not restrict employers, but other laws may still protect employee expression. For example, some state laws protect lawful off-duty political activity, and the National Labor Relations Act (NLRA) may protect speech tied to workplace conditions as “concerted activity.” A practical approach is to focus on conduct rather than viewpoints. Employers should enforce policies that prohibit disruptive, harassing or intimidating behavior regardless of the political or religious perspective involved. Consistent and neutral enforcement is critical to avoid discrimination claims. Clear policies, manager training and careful evaluation of workplace impact help employers manage expression issues in an increasingly polarized climate.

Q: What trends are you seeing in PAGA claims and class actions, and how should businesses adjust their risk management strategies?

Fishman: Wage and hour class actions and PAGA claims remain one of the most active areas of litigation in California – and recent reforms haven’t slowed them down. In fact, filings reached record levels in 2025, underscoring that PAGA is still a primary enforcement tool. What has changed is the focus. Courts and regulators are now looking closely at whether employers can demonstrate “reasonable steps” to comply – shifting the battleground from isolated violations to overall systems and good-faith efforts. The underlying risks remain familiar: Meal and rest break violations, payroll errors and wage statement defects continue to drive claims and class certification. For businesses, the takeaway is clear: Reactive compliance is no longer enough. Proactive audits, real-time data tracking and manager training are essential. In today’s environment, risk management isn’t just about avoiding mistakes – it’s about proving you have built systems to prevent them.

LaQuay: Unfortunately, the number of PAGA lawsuits filed each year continues to rise. By one estimate, California businesses paid more than $2.2 billion in 2025 to resolve PAGA claims. Some businesses have been sued repeatedly. The cost to the public is staggering, because businesses pass on the expenses they incur (for defense costs, settlement payments or both) to their clients and customers. Claims relating to meal and rest breaks are asserted routinely and can lead to liability for derivative claims in addition to underlying violations. I’m encouraged that momentum is building for additional PAGA reform. The 2024 PAGA reforms were a step in the right direction, but even the state’s Labor and Workforce Development Agency recently expressed concern that, as amended, the Act still creates potential for “abusive” litigation practices.

Q: If you could give business leaders one proactive step to take this year to reduce employment-related liability, what would it be?

Scherwin: It sounds cliché or easy to say, but anticipated changes and compliance with changes starts with an updated and compliant employee handbook and conducting a wage and hour/PAGA audit. Employers should watch out for the latest legal alerts and legal updates to understand what is on the horizon and what may need to change. Updating the employee handbook every year is key in a state like California, which has several new laws (at least) that pass every year that impact the workplace. And with the PAGA legislation, conducting PAGA remediation audits will put businesses in a better position to defend against the dreaded PAGA action.

LaQuay: Companies regularly reflect about the level of risk associated with the termination of a specific person’s employment. If the employee is an hourly worker, and the company is asking itself only whether it can prove that there was a legitimate business reason for the termination, in my opinion, the business may be missing the forest for the trees. Absent meaningful PAGA reform, and especially if the employee has not signed an arbitration agreement including a waiver of class claims, that person might drag the company into expensive and prolonged litigation based on allegations that the company never considered possible, such as a claim that managers interfered with rest breaks or payroll did not calculate overtime correctly. Risk mitigation measures include: compliant policies; regular training for managers; periodic wage and hour audits; and observational studies to ensure that no one is working “off the clock.”