Great Lakes Wire

Employers operating in multiple states are encountering challenges as they develop policies that comply with a growing number of state-specific regulations. States have begun to introduce varied requirements related to pay transparency, paid time off, and other employment laws.

Organizations with employees in different states must ensure their employment handbooks meet each state's compliance standards. According to ASE, which works with many multi-state employers, there are generally two approaches to creating compliant handbook policies.

One method is to implement separate state-specific policies. Employers often set up an addendum for each state, including policies relevant only to employees working there, while maintaining overarching guidelines that apply across the organization.

A key reason for adopting state-specific benefit policies is cost management. For example, when providing paid time off, tailoring benefits according to each state's mandate can help control expenses. In states requiring paid sick leave, only the mandated amount is offered; in states without such requirements, the benefit may not be provided at all.

Distributing these addendums means issuing them solely to employees based in those particular states. However, maintaining separate addendums increases administrative work for human resources teams. This approach requires tracking various policies across the organization and leads to more research, updates, and communications.

The alternative strategy is developing one universal policy that meets or exceeds the compliance needs of the most generous state law where the company operates. This single policy covers all employees regardless of location and streamlines administration by reducing the need for frequent updates and simplifying interpretation.

As noted in the article "What Employers Can Learn From Axed Mo. Sick Leave Law," this approach can also reinforce a sense of equity among employees: "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, a universal policy typically increases costs since it provides benefits above legal requirements in some states or extends benefits where none are required: "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 states pass laws mandating additional employee benefits and as companies expand into new regions, businesses will need to closely monitor legislative developments affecting their workforce locations.

By Michael Burns, courtesy of SBAM-approved partner ASE.

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