Last Updated on November 6, 2024

Remote positions and virtual communication tools have made it easier than ever to operate and manage a business across multiple states. However, as the number of remote roles continues to rise, so does the complexity of ensuring compliance and navigating the varied regulations that come with managing a geographically dispersed workforce.

As a business owner, conducting business across state lines creates new compliance challenges. Although you may not knowingly be going against the law, not properly handling the setup of your business in another state when it’s legally required could leave you with expensive penalties or leave you unprotected by state laws.

Three Considerations for Multi-State Remote Employee Compliance

1. Employment Classification

There have been ongoing discussions and updates around employment classification:

• Independent Contractors vs. Employees: The Department of Labor has tightened regulations on and clarified the classification of workers as independent contractors versus employees. It’s important to ensure that remote workers are classified correctly based on the most current laws to avoid misclassification penalties.

2. Data Privacy and Security

With the rise in remote work, there have been more regulations around data privacy:

• Data Protection Laws: New laws and updates, such as the California Privacy Rights Act (CPRA), have expanded data protection requirements. Employers need to ensure that remote work practices comply with these regulations, especially regarding the handling of personal and sensitive information.
• Cybersecurity Measures: Increased focus on cybersecurity means that companies need to implement robust security measures for remote work setups to protect against data breaches and cyber threats.

3. Remote Work Policies and Best Practices

Best practices for remote work have evolved, and many organizations are updating their policies to reflect new realities:

• Flexible Work Arrangements: There is a growing trend towards flexible work arrangements, including hybrid models. Employers should update their policies to address these arrangements and provide clarity on expectations.
• Mental Health and Well-Being: There is an increasing emphasis on supporting remote employees’ mental health and well-being. Companies are updating their employee assistance programs and incorporating wellness initiatives into their remote work policies.

Why Generic Employee Handbooks are Risky

Many handbooks follow templates downloaded from the internet. Most “form” handbooks you get from the Internet focus on federal law requirements, which is important, but you must not forget about state and local laws, which may affect the wording of policies on topics ranging from paid leave, weapons in the workplace, drug testing, jury duty, parental leave—and much more. To maintain compliance, you may need to have separate versions of your handbook or at least state-specific addendums.

Generic Templates Aren’t Customized

Though a generic handbook may be a good start for some, and may have common elements, there are many areas that must be more specific to keep you and your business compliant. Customized areas to consider when you’re determining specifics to include in your handbook are:

• How many employees you have in each state (and sometimes municipality)
• Whether you’re a government contractor, public employer, or private-sector employer
• Whether you have a unionized workforce

State-Specific Issues Aren’t Included

Many employers are not aware that when they draft their employee handbook there are many policies that need to be different based upon the state in which the employer is operating. This can be a real nightmare for HR.

Policies that Change Across State Lines

Family Medical Leave Act (FMLA)

The first is, of course, FMLA. Many, although not all, states have their own FMLA laws that sometimes require more leave than what is required under the federal FMLA.

For example, Connecticut requires that employers provide eligible employees with 16 work weeks of leave in any 24-month period.

New Jersey requires that employers provide 12 weeks of leave in a 24 month period but it is only for the serious health condition of a parent, child or spouse or the birth or placement for adoption or foster care of a child. There is no New Jersey FMLA for your own serious health condition. Moreover, this New Jersey family leave law applies to employers with 50 employees anywhere in the country as long as one of the employees is employed in New Jersey.

Jury Duty Leave

Another policy that will have local implications is your jury duty leave policy. Some states such as New York require that the employee be paid $40 for the first three days of leave. Massachusetts requires that for employees that were scheduled to work for three months preceding the jury duty leave, that they be paid their regular wages for the first three days of jury duty leave.

Access to Personnel Files

Another area that is dictated by local state practice would be access to personnel records. Different states have different laws about whether employees have the right to see or copy their personnel file.

Vacation and Wage Deductions

Vacation and wage deductions is another big area of concern. Many times employers allow employees to borrow PTO or vacation time when they have not yet accrued such time. Then if the employee is terminated prior to accruing the time, the employer requires that the employee pay back the time and sets forth that this will be done by deducting the amount from the employee’s last pay check. This is unlawful in many states.

Short-Term Disability Benefits

In addition, some states such as New York require that employers provide short-term disability benefits.

What NOT to Include in an Employee Handbook

According to MyHRConcierge’s Sr HR Consultant, Emily Frederick, SHRM-CP, you do not want your employee handbook to be too large and cumbersome. If a handbook becomes too long, and tries to cover too much, employees may not be able to understand it and may skim over it, in turn missing important information that could be tucked inside.

Frederick states that handbooks should not include detailed procedures, step-by-step instructions, detailed procedures or anything that is project-related or temporary. Instead, anything seen as a temporary policy should be sent out as a memo, not included as part of the employee handbook. Benefits are also subject to change at each year’s open enrollment, and therefore detailed benefit information should also not be included in an employee handbook.

State-by-State Policies Change Quickly

States also have a variety of other laws that employers need to be aware of. As events and policies change, things become tricky, leaving your business vulnerable. For example, state specific paid sick leave has become more prevalent and required new policies.

Several states have updated their employment laws to better address remote work. Some examples include:

Colorado: The state has introduced requirements for remote job postings to include the salary range, helping to increase transparency and compliance with wage laws.

California: New regulations have been added regarding wage and hour laws for remote employees. Employers must now ensure that remote workers have appropriate equipment and that their workspaces meet certain safety standards.

New York: New legislation requires employers to provide a written remote work policy that outlines the terms and conditions of remote work, including expectations for work hours and communication.

These laws can change and/or become law quickly so it is important for you to be aware of new laws in each of the states in which you, as a multi-state employer, operate.

Per Frederick, in order to ensure compliance and a reasonable handbook length, it is recommended that employers have “separate state addendum(s) for each state in which the company operates… that addendum is going to address those specific state policies. If you’ve got a separate state addendum for an employee that’s in California, all they have to see is your base employee handbook and the California addendum. And now, they’re at just 65 pages instead of 300. And so again, it’s a lot less for the employee to sift through and they can focus on what actually is applicable to them.”

Employee Handbook Monitoring Programs Protect Your Business Across State Lines

An easy way to ensure compliance with employees in multiple states is to have your employee handbooks professionally reviewed and updated by human resources experts such as MyHRConcierge. 

MyHRConcierge specializes in creating and maintaining employee handbooks that are compliant for multiple states. Our Handbook Monitoring Program includes:

• Review of 50 state labor law additions/additions to determine if any will affect employer policies for those operating in those respective states.
• Semi-annual updates to ensure your business is compliant with changing Federal and State regulations including discrimination policies and more.

As litigation increases, automatic updates can save your business from big risks.

Enroll in Employee Handbook Monitoring with MyHRConcierge

To learn more about our services for remote employee handbook compliance, employee handbook review, employee handbook writing, and monthly ongoing compliance, contact MyHRConcierge for a free consultation. Call Chris Cooley at 1-855-538-6947 ext.108 or email ccooley@myhrconcierge.com.