Workplace Now: The ‘Localization’ of Employment Law – What You Don’t Know Can Hurt

It is no secret these days that many workforces, particularly over the last five years, are now subject to numerous state and municipal laws that seek to shape and regulate numerous areas of the workplace (many of which are often conflicting) . Given the gridlock that has been in place for almost a decade in Congress, state legislatures and cities have accelerated their oversight of employers and have imposed their own laws.

In fact, there are literally hundreds of examples of how the scope of local regulation has changed, but perhaps the most breath-taking took place this year in the “City of Brotherly Love” when Philadelphia created the legal authority to shutdown a business located within its confines, for an undefined period of time, if the business “severely” or “repeatedly” violates its anti-discrimination laws under a bill signed into law on June 22. Besides the questionable constitutionality of this law, one of the major drawbacks with respect to many  “local laws” like Philadelphia, is that they often come without any clear guidance as to exactly how they will be enforced.

For example, this ordinance provides that violations which are considered serious can subject a business to closure, but is unclear exactly what is considered serious or what number of repeated violations would lead to a business shutdown. Besides the obvious issues for employers, risk managers and insurers should be very careful when measuring whether the traditional levels of risk and exposure will have to be readjusted in today’s workplace. To be frank, it is unclear that most HR professionals even have the local resources at their disposal to stay on top of each new development absent a system designed to constantly monitor all workplace locations on an ongoing basis.

It is exceedingly hard to even attempt use one employee handbook for a national workforce.

Another recent example, is that Washington, D.C. has now implemented a wage statute applicable to both blue collar and executive employees that provides for rather draconian penalties, and in cases of alleged retaliation actually shifts the burden of proof to the employer to show it would have taken the same action against an employee, absent any issues pertaining to a dispute over wages.

New York City (and many other cities and states) have forbidden “preemployment questions” about criminal background, i.e., so-called  “ban the box ” laws. In fact,  so many states and cities now have such a requirement, that employers who continue to use vendors, who are not cognisant of these laws, are likely in violation of them. Similarly,  New York City and many other cities have laws that make it unlawful to ask an applicant or candidate about credit history, except in certain limited circumstances.

Ultimately, tremendous differences exist among the states and cities, particularly in different regions of the country. Some regions like the Southeast have somewhat limited law at the state level, often relying on federal law, while other states that have extensive laws that go way beyond federal law in scope. In fact, given the number of differences it is exceedingly hard to even attempt use one employee handbook for a national workforce,  such that employers have been rolling out state specific models.

Another area in play are state and city minimum wage laws and overtime.  For example, New York has increased the minimum salary required for employees to be considered “exempt” from overtime. Thus, it is critical for employers to understand that many states are rapidly ramping up overtime wage requirements, even though the federal government recently placed the DOL’s new overtime requirements on hold. But that is the point, one should not be guided only by federal law, but must be extremely focused on state and city enactments.

As one might imagine, San Francisco’s employment laws are dramatically different than almost anywhere else in the United States.  In fact, it is definitely the case, that any employer contemplating opening operations in San Francisco must go through an extensive review of city employment laws, minimum wage ordinances, sick leave laws, and healthcare security ordinances (which guarantee an minimum amount per hour for healthcare contributions for employees who work at least 8 hours in San Francisco).

For example, a recent San Francisco law, effective 2014, is the Family Friendly Workplace Ordinance, which gives employees the right to request a “flexible” and “predictable” work arrangement to assist with caregiving responsibilities, subject to the employer’s right to deny a request based on business reasons.  Additionally, San Francisco has a height and weight discrimination statute that prohibits employment discrimination based on those characteristics.  Employers seeking to advocate the use of weight or height standards must prove a bona fide occupational qualification.  (It is unclear how much such laws will impact employer wellness plans.)

In fact, in 2017 alone, more than 100 state and city laws were implemented, including a few of the following:

1. Alabama prohibits rejecting applications based on the applicant’s membership or non-membership in a labor union.
2. Arizona created paid sick leave for employees, who will accrue 1 hour of sick leave every 30 hours worked.
3. Arkansas now prohibits discrimination against individuals using medical marijuana.
4. In Colorado, employers must allow employees and former employees to inspect and copy their own personnel files. (This right is becoming the norm in many locations.)
5. In Connecticut employers cannot seek information about prior arrests, criminal charges or convictions in an initial employment application, unless an employer is obligated to under federal or state law to ask about criminal history.
6. In Georgia, a law was passed with respect to “joint employment” clarifying that a franchisor is not the employer of the franchisee or the franchisee’s employees.
7. Illinois now prohibits non-compete agreements with any “low wage” employee. Illinois also prohibits employer requests for social media information, or requiring individuals to invite an employer to join an online group, and it prohibits adverse action against individuals who fail to even respond to such prohibited requests.
8. Indiana has legalized recreational marijuana for individuals 21 years of age or older, and thus employees cannot discriminate against individuals for marijuana consumption outside the employer’s property. (It seems likely that employers will need to come to terms will marijuana usage and may or may not be able to restrict usage depending on location.)
9. Massachusetts employers cannot discriminate because of gender in the payment of wages, including benefits or other compensation.
10. St. Paul Minnesota created a paid sick and safe time law.
11. Missouri employees holding a carry permit can be prohibited from carrying concealed fire arms on to the employer’s property.
12. Colorado, one of the many states which has legalized recreational marijuana, does allow employers to maintain and enforce workplace policies prohibiting or restricting actions or conduct otherwise permitted under the law.
13. New Jersey created a paid sick time law.
14. New York City requires a written contract for free lance work worth at least $800, including multiple small projects totally over $800 over a 120 day period.
15. Tennessee employers, with 50 or more employees, must use the federal E verify program to verify a new employee’s work authorization.

In general, an overview of these laws indicates that states and cities are actively reviewing: wage and hour violations, the employer-employee relationship, (including joint employment), paid sick leave, and many states now allow, in one form or another, marijuana use, either for medical purposes or recreational use, and some states prevent employers from taking any action against such employees while others allow employers to have reasonable policies with respect to marijuana use.  Some states are also now beginning to enact laws that restrict questions about social media use, and are pushing back with respect to privacy concerns of employees.  There are also many new city laws which expand the definition of classes that are entitled to protection, create new minimum wage and overtime laws, and even create forms of city mandated health insurance.

Other areas that will likely come into focus in the near term are legislative efforts to strike down arbitration agreements in employment and enhanced state and local reporting on compensation by gender and race.

Ultimately, tremendous differences exist among the states and cities, particularly in different regions of the country.

A related question in this dynamic area is the very concept of workplace location, which almost sounds archaic. This is because many employees work from home or travel to many states from home and report to other employees who work from home or at several different offices. So exactly where does an employee work? For example, does a  New Jersey employee who works from home, but spends the majority of her time visiting New York City clients work in New York City for legal purposes?

In the final analysis, are we getting very close to the need for an “ERISA remedy” where one set of laws would govern national employers? Granted this seems highly doubtful, but how can employers really deal with hundreds of different laws, which often conflict with federal law (and other states), in seeking to regulate the workforce and abide by employment and wage laws.

In conclusion, the state and city “juggernaut” is actually just beginning and we predict that extensive state and city regulation of the employment relationship will greatly increase in the near future as well as vast challenges for those stakeholders who must react to these laws.

This post originally appeared in the LeClairRyan’s LR Workplace Defender blog, which focuses on employment litigation issues.

 

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