Mhlnews 7004 Policy Regulations

Employers Need to Know How to Deal With Proliferating State Laws

May 11, 2017
States and cities lead the way in creating a new legal framework that is reshaping how you do business.

The new Trump Administration is committed to lifting the burden of federal regulation off American business, but a big part of what employers face is the proliferation of laws and rules imposed by states and municipalities.

"The importance of what is occurring is that states and cities are asserting their own authority to craft employment laws particular to their own jurisdiction or belief," observes attorney Kevin Hyde of the Foley & Lardner law firm. "These cities and states are not content to follow the lead of the federal government."

Some actions have grabbed headlines, like the wave of states that significantly raised the minimum wage, which ended up driving the automation businesses ranging from fast food restaurants to warehouses and fulfillment centers. When it comes to the growing trend of reclassifying independent contractors as employees, the bulk of that has occurred at the state and local levels.

Those jurisdictions thoroughly dominated by Democrats who are inherently pro-union impose regulations much differently from the rest of the country. The most notable of these are New York City and California, a state whose anti-employer labor laws and regulatory actions make it seem like a foreign country.

Hyde warns, "Employers must be constantly aware of actions in the locales in which they operate and adopt policies that not only follow the law, but which provide the greatest consistency possible for the entire company."

One major trend has been the rapid spread of "Ban the Box" laws to prohibit criminal background queries in job applications, which usually require an applicant to check off a box. States that have banned the question from private employer applications are Connecticut, Hawaii, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island and Vermont. More than 150 cities and counties have done so on their own.

Other new state laws ban job applicant background checks concerning their credit history, and asking them about their previous salary history, which is seen as helping to perpetuate wage discrimination against women and the long-term unemployed.

Regulatory frontiers have been opened regarding legalization of medical and recreational marijuana, paid sick leave, broadening of local and state anti-discrimination protections (including transgender bathrooms), and limiting employee call scheduling practices.

Seven states, 29 cities, two counties and Washington, D.C., have enacted sick pay laws—all of which differ in important details.

"What all of this means for employers is that everything about the employment relationship is now being regulated at every step of government, down to the city or county level," says David Barron, an attorney with the law firm of Cozen O'Connor.

"The country is rapidly moving toward a human resources professional's worst nightmare—local governments implementing employment laws on a patchwork basis with differing rules based on city limits and state lines," he observes. "This is no longer a minor inconvenience, and local legislation is likely to get worse in the near future."

Barron offers some practical advice on how to manage this legal patchwork:

  • Monitor legislative trends and consider modifying policies or practices for all employees once a "critical mass" of jurisdictions with company facilities pass a law or requirement.
  • Plan for state or local inserts for employee handbooks. Add disclaimers making clear that company policies apply only to the extent they are not inconsistent with state or local laws.
  • Join local trade associations and HR groups that monitor local legislation and provide regular updates.

HR staff now must keep current on not just 50 state laws, but with hundreds of city and county statutes as well. The prospect that this trend will continue is certain. It is now up to you to keep on top of it.

David Sparkman is founding editor of ACWI Advance, the newsletter of the American Chain of Warehouses Inc., as well as a member of the MH&L Editorial Advisory Board.

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