Compliance Challenge of the Year: State and local laws
From 'ban the box' laws to paid leave requirements, employers continue to cite the patchwork of state and local laws as their biggest compliance headache.
State and local laws
Ban the box laws:
Minimum wage laws:
Salary history bans:
A continued increase in the number of state and local laws affecting labor and employment.
Compliance with state and local laws has always been a challenge for employers, but HR Dive readers say that difficulty is their most pressing compliance concern right now. The federal government increased regulation during the Obama years, but as the newly installed administration began to make good on its promises to roll back regulations on businesses, state and local governments began to pick up the slack.
Minimum wage rates across the country
- Minimum wage rate is higher than the federal
- Minimum wage rate is the same as the federal
- Minimum wage rate is lower than the federal (federal applies)
The current count for state and local minimum wage laws stands at 122. Add to that at least 150 “ban the box” laws and myriad paid sick leave requirements and its no wonder employers operating in multiple jurisdictions regularly cite the patchwork of state and local laws as their biggest compliance headache. And they’re not optimistic about any relief: almost 70% say they expect it to worsen while President Trump is in office, according to ComplyRight, a company that assists employers with such compliance.
We’re going to see this trend continue, and get worse.—Shanna Wall, Compliance attorney, ComplyRight
Shanna Wall, a compliance attorney with the company, said the respondents in its "2017 ComplyRight Labor Law Index" report are probably right. “I definitely agree that this is going to continue,” she told HR Dive; “We’re going to see this trend continue, and get worse.” State and local governments may very well be attempting to fill the void left by the federal government, she explained.
Paid sick leave across the country
- Employer-provided paid sick leave
Data from the National Council of State Legislatures.
Map excludes local ordinances and unpaid leave requirements.
We’ve seen this movement in a number of areas. In addition to the ones listed above, there’s predictable scheduling, salary history bans, weapons in the workplace, pregnancy accommodations and more. And the next trend may be tip pooling laws, according to Marc Zimmerman, a partner at Michelman & Robinson LLP. That would be a direct response to the federal government stepping back; the U.S. Department of Labor (DOL) issued new rules limiting employers’ ability to maintain tip pooling arrangements but the Trump administration is set to undo them. “Expect state and local action on tip pools in areas where the hospitality industry is particularly robust,” Zimmerman said.
Salary history bans across the country
- Public and private employers prohibited from requesting pay history
- Public employers prohibited from requesting pay history
- Private employers prohibted from requesting pay history
*Philadelphia's ban is temporarily stayed pending the outcome of a judicial challenge
Overtime thresholds could be another upcoming trend, Wall noted. A replacement threshold from DOL could be years away, according to a former official there, and California and New York already have their own thresholds. It wouldn’t be surprising to see more states adopt such measures.
Pregnancy accommodations across the country
- Accommodations required for pregnant employees
Data from the National Women’s Law Center. Map excludes local ordinances.
So how are employers coping? In two ways. In the short-term, they’re conducting an analysis and deciding whether it’s most cost-effective to follow each individual law, or to take the most generous law and apply it across an entire workforce, sometimes offering workers higher wages or more paid time off than necessary. (However, Wall noted that this doesn’t absolve employers from other requirements. If a business is subject to multiple notice posting requirements, for example, posting about the more generous law doesn’t fulfill its obligations under the other law.)
But they're also playing the long game. Stakeholders are fighting back with legal challenges and other creative solutions. It may seem counter-intuitive for employer groups to be backing a national paid leave law, for example, but that’s exactly what’s they're doing. In a bill recently introduced in Congress, the Society for Human Resource Management has suggested that federal lawmakers allow employers to opt in to providing one amount of leave and a flexible work option, in exchange for being allowed to opt out of related state and local laws.
The Trump administration continues to fulfill its promises, rolling back the overtime rule, EEO-1 compensation reporting requirements, federal contractor mandates and more. If the experts are right, state and local governments may continue to fill in the gap, making those laws the compliance challenge to beat in 2018.
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