United States: Handbook Compliance: A Multi-State Issue

Last Updated: June 13 2019
Article by Christina K. McDonald

Most folks reading this post are subject to a slew of policies that govern his or her employment. For most of us, workplace policies govern when we come to work, what we do when we get there, when we can leave for the day, when and how we take time away from work, what we can wear to work, what we can bring, what we can buy, and the list goes on!

Employment policies are critically important to the American workforce for employers and employees alike. There are policies prompted by federal, state and even local laws that employers are required to follow. There are also policies that employers enact for convenience, such as paid time off, or for competitive advantage, such as non-compete, non-solicitation policies. Policies can assist employers in the defense of employment claims, lower insurance rates, prohibit discrimination at work, and can also be used proactively to protect company information, manage employee expectations, among other reasons. If applied unfairly, however, they can expose employers to liability for violations of anti-discrimination and other laws.

As the American workforce becomes more global, employers have to become aware of and understand relevant laws, and thus implement applicable policies, in every state and locality in which its employees work. The following are some issues to consider when drafting or updating your employee handbook.

Are You Covered in Every State?

Each state has its own unique, and at times quirky, employment laws. If you have even a single employee working away from the main business location, you may be required to comply with that state's employment laws.

For example, in California, employers who permit employees to take paid time off must permit those employees to bank their earned paid time off or cash it out. But, in Michigan, employers are not required to permit employees to carry over or cash out paid time off. Georgia law provides that for an employer to require a valid drug test, it must be in writing and employees must have 60 days' advance notice of the existing policy and any changes to it. Michigan has no such requirement, but its common law dictates that policies should be in writing. Michigan has mandates that protect civil air patrol leaves, while Texas protects employees for emergency evacuation volunteer leave. Minnesota provides protection for certain political activities, while California requires voting leave.

Many employers do not realize that they have a multi-state compliance issue until it arises. For example, sales representatives living and/or working in other states, or those who travel regularly to different states, may be subject to local, state, and sometimes even municipal, laws. Employees who work from home out-of-state may also be subject to those state laws. Any time an employee works away from the company's home office should trigger the question of whether that state's laws apply.

It is a best practice for employers to have either a single handbook that complies with the laws in each state in which it employs people or separate handbooks for each state in which it employs people. It is up to each individual employer, with consultation from counsel, to determine which format is best for its particular workforce.

Do Your Employees Work Remotely?

Remote workers, i.e., those that work from home or away from a traditional brick-and-mortar office building, are becoming more common as technology and security evolve. Employers with remote employees may want to adopt special policies or agreements that are targeted specifically for issues that might arise with a mobile workforce.

For example, how and when must an employee be available for consultation with the home office? Will the employer permit the employee to perform house chores or host personal contractors during the workday? How much flexibility is allowed for remote employees? How often will an employee be required to travel to a central business location for meetings? Will dependent care be provided during the work day? How will the company access the employee's technology remotely in the event of a problem? Will the company's insurer require OSHA compliance in a home office? Should the employee or employer ensure local zoning compliance for a home office? How will private client files be retained to ensure security in a home or mobile office?

Employers can, and should, proactively manage the risks that a mobile workforce brings through implementation of appropriate policies and procedures. Doing so can provide immeasurable benefits and a degree of certainty to the employer and employees alike.

Should you Require Employees to Arbitrate Their Claims? Can You?

As we described in detail in an earlier blog post, mandatory arbitration agreements for employment claims have been increasingly criticized, but that criticism has increased dramatically for sexual harassment cases. The #MeToo movement has generated significant pressure to exclude sexual harassment claims from mandatory employment arbitration agreements, and proposed legislation, both federal and in various states, seeks to bar mandatory arbitration agreements, or at least to exclude sexual harassment claims from mandatory employment arbitration agreements. An increasing number of states have sought to preclude confidentiality of arbitration decisions when it comes to sexual harassment claims.

Employers should consult with their counsel to make sure that their arbitration policies and agreements (required for valid mandatory arbitration) comply with relevant laws.

Employment laws are changing with increasing speed. Employers should regularly review and update their employment policies and handbooks to be sure that they are compliant with the laws of every state in which they employ people. Failure to do so can result in illegal actions and resulting unwanted lawsuits.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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