Four headaches facing multistate employers in the US

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Some multistate US employers may know they need to keep their eye on state laws throughout the country – but quickly become overwhelmed by the sheer number of rules and regulations coming out of the states where they operate. Understanding how those laws may interact with or alter federal law may be equally complicated.

Erin Reid-Eriksen, an employment attorney for Littler Mendelson, the largest US employment law firm, notes that keeping track of and managing compliance obligations in a single state, together with federal obligations, is difficult enough. However, keeping track of and managing compliance obligations in several states can be even more challenging. To minimize the risk of fines, penalties or judgments resulting from mismanaged state and federal obligations, Reid-Eriksen recommends that multistate employers take the following steps:

  • Be knowledgeable regarding state and local compliance obligations;
  • Have procedures in place to manage state and local compliance obligations,
         in conjunction with federal obligations; and
  • Structure the HR department to allow HR to address employment issues in each of the
         employer’s locations.

Reid-Eriksen sees the following trends as the top four issues currently affecting multistate employers:

1. Hodge podge of same-sex marriage laws

State recognition of same-sex marriage is rapidly changing. Currently, 15 states and the District of Columbia recognize same-sex marriage. Hawaii joined the list on December 2, and Illinois will do so in June 2014. To complicate matters further, some states have domestic partnership rights available or offer civil union status to same-sex couples.

Amidst this changing landscape, the US Supreme Court in June 2013 struck down Section 3 of the federal Defense of Marriage Act (DOMA), which mandated that the terms marriage and spouse in federal law could only refer to marriage between one man and one woman. As a result, married same-sex couples residing in states where same-sex marriages are legal are now eligible for over 1,000 federal benefits and protections linked to marital status. The Court’s ruling, however, left intact Section 2 of DOMA, which allows states to disregard same-sex marriage certificates issued in other jurisdictions.

For multistate employers, this means their employees are living in states with dramatically different rights available for same-sex couples. To ease administrative burdens and create a more cohesive culture, multistate employers should consider adopting uniform policies and benefit plans across all states, but those policies and benefit plans have to provide employees with the greatest possible rights. Or, multistate employers may consider creating state-specific policies and plans.

2. Keeping track of various state leave laws

Many states leave laws differ in important respects from the federal Family and Medical Leave Act (FMLA). The differences run the gambit from varying definitions of covered employers, the length of the allowable leave period, and whether the state family and medical leave laws apply to employees in domestic partnerships or civil unions. This creates a compliance challenge that multistate employers must address head on by creating a robust HR department, well-versed in the various state laws. Alternatively, to ease administrative burdens, employers again may adopt uniform policies across all states – but those policies must provide employees with the greatest recognized rights.

In addition to the various family and medical leave state laws, a number of states provide for leaves of absence with no federal law counterpart. Examples include school visitation leave, domestic violence leave and leave for bone marrow, blood and organ donation. These laws implement their own standards regarding which employers and employees are covered and how employers must comply. This is also an area that multistate employers need to monitor as states remain active in adding new entitlements. For example, in 2014, Oregon is set to become the first state to require certain employers to provide bereavement leave for employees.

3.  Handling the hiring process amidst competing rules

Before the employment relationship even begins, multistate employers must put into place proper procedures to handle the screening of applicants and the hiring of new employees in a way that appropriately accounts for federal and state laws. State laws in the area of background and credit checks, in particular, vary to such a degree that it may be difficult for employers to adopt a single across-the-board approach.

For example, rules regarding when an employer may inquire about a job applicant’s criminal history differ by state. A growing number of states and localities have adopted Ban-the-Box laws, referring to the “box” on employment applications where applicants are asked whether they have ever been convicted of a crime. The safest course for a multistate employer may be to remove this box from initial job applications, though criminal history questions may be asked later in the hiring process.

4.  Accounting for antidiscrimination variations

Compared to many states and localities, federal law has fewer antidiscrimination protections. Sexual orientation and marital status are two common examples of categories afforded protection under state and/or local antidiscrimination law that are not currently protected by federal law.

As a result, multistate employers should include a “catch-all” provision in their antidiscrimination policies stating that the employer “does not discriminate against employees on any other basis prohibited by federal, state or local law.” Otherwise, according to Reid-Eriksen, an employer could inadvertently extend antidiscrimination protections beyond those included in the various places in which the employer operates, thus opening itself up to increased legal exposure.

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