Compliance is the Sticking Point
One of the main issues complicated by multi-state work is proper risk assessment and management of compliance issues. Employers hiring multi-state employees must comply with all federal laws and state laws in all the states in which they conduct business.
This is more easily said than done. Here are just a few areas where compliance can be an issue:
Background Checks: According to research by SHRM, nine out of 10 employers run background checks on potential hires. Most background checks are covered by the federal Fair Credit Reporting Act (FCRA) as well as various state mandates.
Without sufficient diligence, employers can unwittingly violate one or more of the mandates, either federal or local. This is a costly mistake. Steven Woods, chair of the Background Check Advice Group at Ogletree Deakins, notes: “Background check class actions are one of the new hot types of lawsuits being filed by plaintiff’s attorneys, because of the number and variety of federal and state requirements. Employers should take another look at their background check processes in light of the new crop of lawsuits.”
Paid Family Leave: While employers must comply with the federal Family and Medical Leave Act (FMLA), it is also essential for multi-state employers to comply fully with any state mandates concerning leaves of absence.
California, New Jersey, and Rhode Island currently mandate paid family leaves, and it is expected that more states will soon enact legislation to do the same.
Paid Sick Leave: Currently, four states (California, Connecticut, Massachusetts, and Oregon) mandate that employers provide paid sick leave to their workers. That number is expected to rise in 2016, with New York, Virginia, and Wisconsin introducing legislation addressing the paid sick leave issue.
In addition to statewide considerations, some states that do not currently mandate paid sick leave have municipalities that do. Montgomery County, Maryland; Philadelphia and Pittsburgh, Pennsylvania; and Tacoma, Washington are all municipalities which mandate paid sick leave.
Scheduling Mandates: A growing number of states and municipalities are considering legislation concerning predictive scheduling or fair scheduling. In essence, under most of these proposed mandates, employers would be required to post employee schedules at least two weeks in advance. Any changes in the schedule will expose employers to a requirement to pay a certain amount of “predictability pay” to compensate employees for the change in scheduling.
As this sort of legislation becomes the norm, employers will need to be hyper-vigilant about compliance to avoid the potential budgeting problems that could result from non-compliance.
The Problem of State Health Exchanges
Small employers with 50 or fewer employees have the option to provide employee benefits through the Small Business Health Options Program (SHOP). However, since each state has varying options and regulations for selecting plans, the logistics of such a choice present a significant stumbling block for many small business owners.
Federal guidelines for using the SHOP exchange state that employers must purchase the coverage through the state where their business is located. If they have multiple business locations or employees in multiple states, then they may need to offer plans for each state involved. It is easy to see why this strategy creates a potential nightmare of compliance issues and other complications for small businesses.
Working with a Consultant Can Help
These are by no means the only challenges facing employers with multi-state locations or employees. However, these concerns are among the top worries for such companies. A knowledgeable benefits consultant can do much to help a company limit its exposure to compliance issues that arise in multi-state environments. If you feel that you would benefit from a consultation with a seasoned benefits consultant, please contact us today. With years of experience in the field of benefits consulting, we can help you navigate the challenges of multi-state compliance.