Geography still matters in employment relationships. Each person who performs their job on a computer has a physical location somewhere. In most cases, the laws of that “somewhere” give the employee rights that their employer is obligated to respect. In other words, a U.S. employer has obligations under the state and local laws of the place where their employee lives, no matter where the employer and other employees are located. At this moment, when a multi-state workforce is the rule more than the exception, employer risk from unwitting violations of state and local HR laws is significant. To minimize the risk, make sure to include the following topics in your multi-state employment strategy:
- Don’t ask the “wrong” questions during the hiring process. State and local legislatures have a lot to say about employers’ inquiries of job candidates. Some common topics are a candidate’s pay history, criminal record and social media credentials. Whether you’re seeking out job candidates in a particular state or just accepting an application from a candidate in a state far away from your business headquarters, you should find out what that state’s laws say on the topic of hiring.
- Get the payroll processing right. Back-office requirements like registering your business in the employee’s state of residence, contributing to the state-run unemployment benefits system and purchasing workers compensation insurance are usual. Some states have enacted laws dictating an employer’s response to a disagreement with an employee about the amount of wages due, requiring a written statement of the discrepancy and on-schedule payment of the undisputed portion of wages.
- Policies and procedures. Requirements and prohibitions vary widely, with many surprises that reflect the norms and expectations of a locale. There are laws in some states guaranteeing employees the right to openly discuss their compensation. Smoking-related laws include those that prohibit employees from smoking at work and those that protect their right to smoke outside of work. Some states put constraints on employer policies relating to guns at the worksite.
- Give employees the required time off. The state-to-state and city-to-city variation on time off rules can be head-spinning. Because employees understandably care a lot about taking the paid and/or unpaid time off they are entitled to under the law — for illness, family caregiving, voting or other needs — there is significant legal risk to an employer who doesn’t get this right.
- Termination. Some states require an employer to pay final wages on the day of termination and others permit payment on the next regular payday. Some states require extra payments, i.e. payment for unused vacation time or, when the terminating employee came to the work location from out-of-state, payment for transportation back to the employee’s home state.
HR lawyers and employment lawyers provide the legal compliance information that businesses need. Lawyers can also make connections with other knowledgeable professionals, like accountants, benefits brokers, payroll companies, PEO’s and HR consultants. You can work with a team of experts or try DIY research. Either way, state and local law compliance is essential for a good multi-state employment strategy!