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​Consider that in recent years, 29 states and at least 40 local governments have raised their minimum wage above the federal rate of $7.25 an hour.

Eleven states and about 20 municipalities have enacted laws requiring employers to provide paid sick leave. 

At least eight states have passed equal-pay laws that exceed the requirements of the federal Equal Pay Act, and at least eight states and 12 municipalities have enacted legislation prohibiting employers from asking applicants about their previous salaries.

Thirty-three states have legalized the medical use of marijuana, and 10 states have also legalized recreational use, requiring employers to re-examine their drug-testing policies.

Why is all this happening now?

It’s most likely a function of the gridlock existing at the federal level, says Benjamin Ebbink, an attorney with Fisher Phillips in Sacramento, Calif. “There always seems to be a divided Congress,” he says. “There’s not a lot of legislative policy coming out of D.C. We’re not seeing a lot of statutory change.”

In response, workers’ advocates, particularly in blue states, have turned to state and local legislators to enact new labor policy, says Ebbink, former chief consultant to the California Assembly Committee on Labor and Employment.

As for the future, “there will be a lot of talk about employment and HR at the federal level,” Ebbink says. “But as for things actually getting done, not a lot will happen. We’ll continue to see this focus on activity at the state and local levels.”

So how can HR professionals ensure that their businesses stay compliant with these new laws? And what about employers doing business in multiple states? Compliance can be particularly complicated for multistate employers that have to manage fast-changing regulations across the nation. 

Minimum Wage

While the federal minimum wage remains at $7.25 an hour, 29 states plus Washington, D.C., have higher wage floors, according to the U.S. Department of Labor. 

In addition, at least 40 local jurisdictions have wages higher than the federal minimum and, in some cases, higher than the state’s own mandated wage rate, reports the Labor Center at the University of California at Berkeley. 

“This is not a partisan issue,” says Jonathan A. Segal, an attorney with Duane Morris in Philadelphia. Raises are being enacted in red, blue and purple states, and the wage floor in California, Illinois, Maryland, Massachusetts, New Jersey and New York, plus Washington, D.C., will eventually reach $15 an hour, he says. 

“Minimum wage hits a company’s bottom line,” says Denise Visconti, an attorney with Littler’s San Diego office. “At the core, wages are going up, and you need to make sure you pay people correctly.”

This is particularly difficult for multistate employers because the wage floor is different in every state and even within states, Visconti notes. And some types of establishments, such as airports, may have their own minimum wage, higher than at other businesses in the same locality, she adds. 

Companies must make a choice: Either pay everyone at the highest wage rate to ensure compliance with all laws, or set pay on a jurisdiction-by-jurisdiction basis. Either way, this can be hard to manage, Visconti says. For example, California alone has at least 20 different minimum-wage ordinances, depending on locality. 

Further complications arise if you have employees moving among jurisdictions with differing minimum wages. You first have to know where your employees are working, says Charles E. McDonald III, an attorney with Ogletree Deakins’ Greenville, S.C., office, and you might have to track how many hours each employee spends at each location. Some employers, however, choose to pay the highest wage for all hours worked, regardless of where, to make sure they’re compliant with all applicable wage floors, he adds.

And there’s another fact to consider. “We think minimum wage impacts only hourly workers,” Visconti says. “But salary requirements for exempt workers are often based on minimum wage.” In California, for example, exempt salaries must be double the minimum wage. “So this doesn’t impact part of your population, but all of your population,” she says, “exempt as well as nonexempt.”


Minimum Wage Action Items

  • Determine the minimum wage for all municipalities and states in which your company does business.
  • Decide whether to pay all employees at the highest wage rate, to make sure you’re complying with all laws, or to set pay on a jurisdiction-by-jurisdiction basis. 
  • Know where all employees are working, particularly those who travel among 
jurisdictions.
  • Keep in mind the impact of minimum wage on determining who’s an exempt employee.

Paid Sick Leave

Currently, 11 states (Arizona, California, Connecticut, Maryland, Massachusetts, Michigan, New Jersey, Oregon, Rhode Island, Vermont and Washington), as well as Washington, D.C., and Puerto Rico, require employers to provide some paid sick leave. In addition, more than 20 municipalities impose their own requirements, according to the National Partnership for Women & Families, a nonprofit, nonpartisan organization based in Washington, D.C. 

“Paid-sick-leave laws are spreading like wildfire,” Visconti says. “They’re all different in terms of requirements, and some are conflicting.” 

For example, Visconti notes that some laws allow for paid sick leave to be front-loaded. That means each year on Jan. 1, employees receive the entire amount of the allotted leave, she explains. They may use any or all of it from that point forward. However, in most jurisdictions, sick leave accrues throughout the year. An employee may, for example, accrue one hour of paid sick leave for every 30 hours worked, McDonald says.

Other differences include:

  • Limits on the number of hours or days that may be accrued in a year. 
  • Minimum increments of leave that employees can use.
  • How much unused leave can be carried over to the next year.

This all may be particularly difficult to figure out for part-time employees, Visconti notes. And if your business has employees in multiple jurisdictions, complying with all applicable laws presents additional challenges. These challenges are compounded if you have employees who move among jurisdictions. 

“If you operate across jurisdictional boundaries, the first step is to determine which laws are applicable to you,” Ebbink says. “You must come up with a system to monitor compliance. If you have employees who are driving around, you have to track the hours they’re in certain jurisdictions.” 

Visconti advises HR to make sure that someone is tracking all employees’ hours. Some companies do it themselves, she notes, while others hire lawyers to track it for them. 

In addition to accurately tracking hours, you should answer some policy questions about how you’ll deal with paid sick leave. First, you should decide whether you want to have a separate paid-sick-leave policy or if you want to wrap it into your paid-time-off policy, McDonald says. 

Second, you should decide whether you need to have a separate sick-leave policy for each jurisdiction in which you do business. If you’re only in a few jurisdictions, separate policies may work, McDonald says, but if you’re in many jurisdictions, he recommends a generic sick-leave policy that includes the following provisions:

  • Reasons why paid sick leave may be used. 
  • A company vow not to retaliate for the use of sick leave. 
  • A statement that employees will be entitled to whatever is mandated in the jurisdiction in which they work, accruing according to the laws of that jurisdiction.

Paid Sick Leave Action Items

  • Recognize that these laws vary greatly by jurisdiction, including methods of accrual and accrual rates, carryover obligations and minimum increments that can be used. 
  • Carefully track all hours worked and where they’re worked.
  • Pay special attention in calculating earned leave for part-time employees and those who work in more than one jurisdiction.
  • Decide whether you’ll track employee hours yourself or if you’ll hire someone outside the company to do it for you.
  • Decide whether you need to have a separate sick-leave policy for each jurisdiction in which you do business or if a generic policy will suffice.

Pay Equity 

State laws aimed at narrowing the pay gap between men and women address two different areas: 

  • Pay equity, which is the principle that employees should be paid fairly and that any discrepancies should be justified by business reasons.
  • Prohibitions on asking job applicants their salary history.

Recent state pay-equity laws go beyond the federal Equal Pay Act, Segal says. While federal law mandates equal pay for equal work, some states require equal pay for “comparable” or “substantially similar” work. States that have recently passed such legislation include California, Maryland, Massachusetts, New Jersey, New York, Oregon and Washington. 

Such laws generally provide the same defenses—seniority, performance, experience and sometimes location—to claims of unequal pay, Segal says. 

How should HR respond to these new pay-equity laws? 

If you’re trying to determine whether you’re paying your employees equitably, the first step is to know what you’re paying them, Visconti says. She recommends that employers conduct compensation audits to answer this initial question. 

“Let’s establish a base line for what you’re paying people and whether there are differences among people performing similar jobs,” she says. Next, ask why these differences exist. If people performing similar jobs are paid differently but there’s a substantial difference in experience, that might be allowable under state law. But if you don’t know why there’s a discrepancy, you might have to address the differences, she says. 

One other important factor in complying with pay-equity laws is making sure that all job descriptions accurately reflect the work that employees are actually doing. Pay-equity statutes require paying people performing similar jobs similarly. If you have people performing different jobs, make sure that they have different titles and different job descriptions. “You want to be able to say two jobs are different,” Visconti says. 

The last important piece is training. Decision-makers and recruiters must understand what they can base pay decisions on and what they cannot under these statutes. 

At least eight states, including California, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Oregon and Vermont, ban employers from asking applicants for employment about their compensation at previous jobs. And at least 12 municipalities have also enacted their own laws prohibiting such inquiries, McDonald says.

The rationale behind these laws is that employers should be setting pay grades and salary ranges for particular jobs instead of perpetuating wages that might not be equitable compared to what others are making, Visconti says.

Multistate employers must decide if they want to stop asking about prior salary in all jurisdictions or only in those where required by law. HR should consider whether the company “really needs prior compensation in deciding what to pay new employees,” Segal says. 


Pay Equity Action Items

  • Know the equal-pay laws of all jurisdictions in which your company does business, and recognize that different laws may establish different standards in determining which jobs must be compared. 
  • Make sure you understand the defenses for unequal pay that the laws provide, which generally include seniority, performance, experience and location.
  • Ascertain what you’re actually paying your employees; consider conducting a pay audit.
  • Try to understand any differences in pay between similarly situated workers, and, if there’s no permissible reason for the discrepancy, consider eliminating the differences.
  • Make sure your job descriptions accurately reflect the work being performed. 
  • Train decision-makers and recruiters.
  • Comply with any state or local salary-history bans applicable to your workforce.
  • If only some of your multistate workforce is covered by salary-history bans, decide whether you want to stop asking about prior compensation in all jurisdictions or only in those where required by law.


Marijuana

While marijuana use remains illegal at the federal level, 33 states have legalized medical use, and 10 states have also legalized recreational use.

When discussing marijuana, it’s easiest to say what’s not protected, says Michael Clarkson, an attorney in Ogletree Deakins’ Boston office. Except in Maine, there’s no workplace protection for the use of recreational marijuana, he says. And as for medical marijuana, there’s less workplace protection for it than there is for other medically protected drugs. “You cannot possess marijuana at work,” Clarkson says. “You cannot use marijuana at work. You cannot be high at work.” 

But whether an employer can terminate or fail to hire an employee for testing positive for marijuana if that person has a legal medical marijuana identification card (MMID) probably depends on where you’re located. Several courts have ruled that employers can uphold workplace-free drug policies because marijuana use violates federal law. However, more than a dozen states have passed laws to explicitly prohibit workplace discrimination against medical marijuana patients. 

And while the federal Americans with Disabilities Act (ADA) doesn’t protect illegal drug use, which includes marijuana use because it’s illegal under federal law, many states have nondiscrimination laws similar to the ADA. Court decisions under these state laws are divided. Judges in some states have ruled in favor of employers, while others have ruled in favor of employees, says Lauraine Bifulco, president of Vantaggio HR in Orange County, Calif.




Formulating policies regarding medical marijuana may be particularly troublesome for multistate employers, Segal says. How do you have a universal rule when laws differ so much from state to state? A growing number of multistate employers are deciding not to test for cannabis except where required by law, such as where Department of Transportation regulations require testing, Segal notes.

Many of the states that have legalized recreational marijuana include language in their statutes permitting employers to continue to maintain zero-tolerance policies based on federal law. Several states, however, are silent as to whether employers may limit or regulate an employee’s use of marijuana outside the workplace. 

Unlike with medical marijuana, the state laws that may come into play regarding recreational marijuana use are not disability-bias laws but those that center on invasion of privacy and protecting employees’ off-duty conduct, Bifulco says.

The New York City Council passed legislation that will ban pre-employment testing for marijuana, though many exceptions apply. Maine became the first state to protect employees’ use of marijuana (not just medical marijuana) outside the workplace. However, employers are still permitted to prohibit use at work and can discipline employees for being under the influence while on duty. 

Under most drug-testing programs currently used by employers, a positive marijuana test will not indicate whether the marijuana use happened on or off duty, Bifulco says. Keeping that in mind, HR should ask a number of questions before deciding whether to test for marijuana, she advises, including: 

  • How much of a concern is safety in our workplace or in certain positions?
  • Is medical marijuana legal in our state, and, if so, are medical marijuana identification cardholders protected from employment discrimination?
  • Is recreational marijuana legal, and, if so, are employers permitted to enforce zero-tolerance policies?
  • Does our state have laws regarding off-duty conduct or relevant privacy laws?

Furthermore, in this current economic environment of low unemployment, many employers outside of safety-sensitive industries are taking marijuana out of their drug-screening protocols because refusing to hire those who test positive would create staffing problems, Clarkson says. 

Bifulco offers four suggestions for HR:

  • Start thinking of marijuana in the workplace as you think of alcohol. 
  • Accommodate MMID holders, assuming there’s an underlying disability.
  • Focus on prohibiting use, possession and impairment in the workplace.
  • Focus on safety and testing when there’s a reasonable suspicion of workplace impairment. 

Conservative states are also getting on “the marijuana bandwagon,” Clarkson notes, since those legislators see the financial benefits being enjoyed by states like California, which taxes marijuana at 15 percent and expects to make a billion dollars a year. 

“That will get the attention of even red-state governors,” Clarkson says.  

Marijuana Action Items

  • Know the state laws regarding both medical and recreational marijuana for all states in which you do business; note that much of the law in this area comes from court decisions as well as state legislatures. 
  • If you’re a multistate employer, decide whether you want a universal policy for all jurisdictions. 
  • In deciding whether to drug test for marijuana, focus on how much of a concern safety is in your workplace or in certain positions.
  • Start thinking of marijuana in the workplace as you think of alcohol. 
  • Accommodate medical marijuana identification cardholders, assuming there’s an underlying disability.
  • Focus on prohibiting use, possession and impairment in the workplace.
  • Focus on safety and testing when there’s a reasonable suspicion of workplace impairment. 


Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md. 

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