Hiring remote workers 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 in hiring is the employee’s physical location. This compels H.R. professionals to familiarize themselves with employment laws of multiple states because the law of the location a remote person is working dictates the applicable employment laws. They may differ widely.
Different States Means Different Laws and Procedures
There are a few things to bear in mind in deciding from which states to hire. First, keep in mind that some states, in particular, 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 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. This trend is on the upswing. Employing people in those states dictates more tax withholding, 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 have an annual legal review. A few fees up front 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 such individual’s sex or marital status, any surname other than the one by which such individual is generally known. In some states, laws bar transgender people from using bathrooms consistent with their gender identity. To ease the burden of brainstorming, included here are examples of typical types of employment-related laws, for later reference.
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 to provide repeated notice, including to applicants or at hire. The laws may direct that legal notices may 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 varying 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 is a laundry list of various anti-discrimination protected classifications. The state laws might be the same as federal law or exceed them. For instance, in Delaware it is illegal to discriminate against an employee because they are a family caregiver, a volunteer firefighter or member 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 ADA accommodations. In certain places, it’s illegal for an employer to require documentation from a health care 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 that a new employee not share their own, or ask others about, terms and conditions of employment are forbidden in some places. It’s time to revisit non-compete 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. Where a state has a work force training fund program, or similar, the employer 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 is not exclusive. In general, employee manual addenda are recommended to avoid constant changes. Of course, employees must sign acknowledgement of review of the addenda and be notified of changes. For all these reasons, from an H.R. 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, North Carolina office. She can be reached at kwitherspoonfry@offitkurman.com.
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