Remote work has skyrocketed in popularity since the beginning of the pandemic. Of course, there are many advantages to this practice, including access to a broader candidate pool and fewer real estate expenses. However, an important consideration is employees’ physical location. This compels HR professionals to familiarize themselves with employment laws of multiple states because the law where remote employees work dictates the applicable employment laws, and they may differ widely.
Different States Mean Different Laws and Procedures
There are a few things to bear in mind when deciding what states to hire from. First, keep in mind that some states have laws distinctly favoring employees. For example, California, Massachusetts, and New York have masses of employer-friendly statutes and a history of worker-favored court decisions. There will be more compliance challenges and perhaps a higher legal cost to obtain the necessary knowledge. And don’t forget to consider municipal laws; many cities (and Washington, D.C.) have their own sets of employment statutes.
Second, some states have passed complex insurance systems to provide for employee paid sick and safe leave and/or disability leave, and this trend is on the upswing. Employing people in those states would therefore require more tax withholding, more employer contributions, and increased paperwork.
It’s impossible to be 100% up to date on states’ and municipalities’ laws unless all legislation, regulations, and relevant precedent-setting court cases are tracked. Find a good, updated index from a reliable legal source; track state legislation from state websites; and conduct an annual legal review. A few fees upfront could avoid penalties or lawsuits.
Finally, it’s difficult to even recall all the different types of employment-related laws. The laws’ specificity may be surprising. For example, in some places, it’s illegal for employers to require employees to use, because of their sex or marital status, any surname other than the one by which they’re generally known. In some states, laws bar transgender people from using bathrooms consistent with their gender identity. To ease the burden of brainstorming, included in this article are examples of the typical types of employment-related laws.
Examples
At the start, providing notice of legal rights to employees is key. State law might require employers not only to adopt a policy but also to provide repeated notice, including to applicants or at hire. The laws may also direct legal notices to be provided via different methods, like physical posting or sharing on the company’s intranet. An easy source for required notices is the state department of labor’s website, where free notice downloads are available in many languages.
Of course, leave laws vary widely. Common types are paid sick and safe leave, family and medical leave, parental leave, voting leave, jury duty leave, domestic violence leave, emergency responder’s leave, leave to a veteran for various purposes, crime victims’ leave, organ donor leave, leave to attend school or daycare events, and national guard or state guard leave. Then check for more in the particular state. One way to address multiple state leave laws is to provide all employees with all leaves required by every worker’s location. Another less expensive but more complex approach is to include the varying leave provisions, by state, in addenda to the employee policy manual.
There’s also a laundry list of various antidiscrimination-protected classifications. The state laws might be the same as federal law or exceed them. For instance, in Delaware, it’s illegal to discriminate against employees because they’re family caregivers or volunteer firefighters or members of the firefighter’s women’s auxiliary. Rather than trying to keep up with this list in the employee manual, add “or any other legally protected classification.”
Accommodations laws are important from hiring through the entire employment relationship, but again, state accommodations laws differ. For example, in some locales, employers must grant reasonable accommodations requested by employees for their pregnancy or related conditions. Those laws generally use a similar approach to Americans with Disabilities Act (ADA) accommodations. In certain places, it’s illegal for an employer to require documentation from a healthcare or rehabilitation professional in certain situations, such as a request to lift less than 20 pounds. State nursing mother accommodations requirements might exceed the federal laws, too.
Additional hiring laws are another concern. For example, requiring or requesting lie detector tests; inquiring about prior wages; and directing or requiring, as a condition of employment, new employees not to share their own, or ask others about, terms and conditions of employment are forbidden in some places. It’s time to revisit noncompete agreements signed by new employees, too. The enforceability is limited or forbidden in some states (and may soon be federally banned by a proposed regulation and/or pending legislation).
Finally, be mindful of wage payment laws. Employers in some locations must pay into a medical assistance or family medical leave account set up by the state—similar to the unemployment insurance fund. If a state has a workforce training fund program or something similar, employers also must contribute. Get an experienced payroll processor to handle these issues. Moreover, employers must pay wages earned by employees within different time periods following termination according to various laws. For example, in California, people must be paid in full on the day of termination for all time worked, whereas many other states allow payment on the next payday following termination. To make things more complicated, the definition of “wages” (and penalties for failing to pay on time) varies by state. For example, earned commissions and benefits payments may be “wages.”
Sadly, the above list isn’t exclusive. In general, employee manual addenda are recommended to avoid constant changes. Of course, employees must sign an acknowledgment that they reviewed the addenda and be notified of changes. For all these reasons, from an HR and expense perspective, management should carefully consider the ramifications of hiring remote workers in multiple states.
Katherine Witherspoon Fry is a principal in Offit Kurman’s Wilmington, Delaware, office. She can be reached at kwitherspoonfry@offitkurman.com.