Employers with operations or employees in multiple states face challenges when creating policies that comply with varying state regulations. Many states now have different requirements related to areas like pay transparency and paid time off, and new employment laws are being introduced regularly.

Employers that have employees in different states will need to ensure their employment policies meet each state’s compliance requirements. ASE works with many members that are multi-state employers, and we generally see handbooks use one of two approaches to handbook policy development and compliance.

One approach is to have multiple state specific policies. Typically, employers will set up a specific state addendum with polices for that state’s employees that are in addition to polices that apply to all the organization’s employees regardless of where they work.

One reason employers might choose to implement separate state-specific benefit policies instead of a universal policy is cost savings. For example, when offering paid time off, tailoring policies to each state’s requirements can help control expenses. In states where paid sick leave is mandated, the employer would provide only the required amount for employees in that state. Meanwhile, in states with no paid leave requirements, the employer wouldn’t need to offer the benefit at all.

Putting the policy in a separate state addendum would require issuing that addendum to only to employees working in that state.

Also keep in mind that maintaining separate state addendums creates an administrative burden. In addition to creating those separate policies, administration of those polices would require Human Resources to track the variety of different policies across an organization. This will increase research, update, and communications activity for the organization.

The other approach an employer can take to manage compliance in a multi-state employment situation is to develop one broad (universal) policy that first meets the compliance requirements of the most generous state law. Adopting one policy to cover all employees in the organization allows for just one benefit and policy to administer throughout the entire organization.  

Having one singular and overarching policy would ease administration and make it easier to administratively practice and interpret that one policy. It also decreases policy changes because only one policy needs to be kept up to date.

In the article, What Employers Can Learn From Axed Mo. Sick Leave Law, the authors point out that having one overarching policy also demonstrates to employees the organization’s equity and fairness for all employees by having one policy or benefit provided to all.

However, the article also notes that having a single, company-wide policy that provides the same higher-level benefit to all employees typically results in increased costs. This is because the employer ends up offering benefits that exceed legal requirements in some states and providing benefits in states where no such benefits are required at all.

As more and more states pass laws that compel costly benefits, and more employers expand to operate in other states, employers will need to keep track of what is happening in those states they have workers in.

ASE Connect

ASE Member Tools: ASE provides two different online libraries that provide state-by-state employment and labor law information and comparator tools: CCH AnswersNow and Zywave HR Services Suite.  Both online libraries provide excellent information on every U.S. state’s employment and labor laws so ASE members can stay up to date and compliant with the laws in the states they employ people in for their business. ASE members can access these valuable tools on the ASE Member Dashboard.

ASE Handbook Services - ASE can provide employee handbook review or update. If an organization does not have an employee handbook yet, ASE can develop a complete employee handbook customized to your organization’s policies and practices. If you have a handbook, we can review it for compliance as well as layout for ease of reading. For information about ASE employee handbook review and development services contact Michael Burns.