Labor Laws: What Are They and How They Affect Multi-State Employers

Understanding labor laws is crucial for ensuring the fair treatment of employees and avoiding legal issues. However, assuring compliance can be challenging for HR professionals, especially those managing multi-state operations.

Federal labor laws apply to every employer in the country. Still, each state (and sometimes each municipality) can have different labor laws and compliance requirements, making things more complicated.

Here’s what multi-state employers need to know about labor law compliance and how Mosey can simplify business compliance.

What Are Labor Laws?

Labor laws are regulations that govern labor relations between employers and employees. They’re designed to protect workers’ rights, ensure fair wages, and promote workplace safety. The main intention of labor laws is to prevent the abuse or exploitation of workers and discourage discrimination.

Many labor laws are effective on a federal level, meaning employers everywhere in the country must abide by them. However, states can also enact and enforce their own labor laws. Compliance with these laws is mandatory for all employers, regardless of size or industry.

What Is Labor Law Compliance?

Labor law compliance refers to adhering to federal, state, and local regulations that govern employment practices. These laws cover minimum wage, overtime pay, discrimination, harassment, and employee benefits.

For multi-state employers, compliance involves understanding and adhering to the specific requirements of each state where you have employees. Federal laws will be the same everywhere, but state and local laws can change significantly. This can pose a problem for employers, especially when implementing and enforcing workplace policies.

Challenges for Multi-State Employers

Managing compliance across multiple states can be challenging. Each state may have different overtime thresholds, requirements for paid sick leave or family leave, and minimum wage rates that may be higher than the federal minimum wage.

States set their own policies for employee termination, last payday requirements, and payout for vacation time. It doesn’t matter where your company is headquartered; you’re expected to follow the laws and requirements set by the state where each office, warehouse, factory, or storefront can be found.

Varying requirements can make it necessary to implement different policies for different locations of the same business. Tracking compliance across several sets of laws or standards can be difficult because it eliminates the possibility of a universal policy.

Multi-state employers must create tailored policies for locations in every state where they operate and enforce these policies on a local level. HR managers must also consider how state and local labor laws will affect their organizations as a whole.

What Are Labor Law Posters?

Employers with a physical workplace must post labor law notices, commonly called labor law posters. Most labor law poster requirements are federal, but some states require special labor poster considerations.

Labor law posters are mandatory workplace notices employers need to display to inform employees of their rights under federal, state, and local labor laws. The Department of Labor provides these notices for free. They’re intended to be posted with the exact size specifications that appear on the DOL’s website.

These posters typically include information about wage laws, anti-discrimination laws, workplace safety guidelines, and employee rights under the Family and Medical Leave Act (FMLA). The text on the posters informs employees of their rights and responsibilities under the law and tells them where to report violations.

Requirements for Multi-State Employers

Multi-state employers must display the appropriate labor law posters in each location where they have employees. Since poster requirements vary by jurisdiction, you should obtain posters from state employer websites and their respective labor commissions to maintain HR compliance.

Federally required labor law posters are the same across the board, but requirements can vary by region. You must display posters in multiple languages if you have a significant number of employees who speak a language other than English.

Commonly spoken languages vary by state. While Spanish is the most commonly spoken second language in the United States, there are others to consider. For example, many people in certain regions of Florida speak Portuguese as a first language because their national origin is Brazilian.

What Is Workers’ Compensation?

Workers’ compensation is mandatory for nearly every employer. While workers’ compensation is federally required, each state runs its own Workers’ Compensation Board with the power to set its own rules or regulations for how its insurance program works.

Workers’ compensation is a form of insurance that provides medical benefits and wage replacement to employees who suffer work-related injuries or illnesses. It is a legal requirement in most states and is intended to protect employees and employers by providing financial support and avoiding litigation over workplace injuries.

Compliance for Multi-State Employers

Workers’ compensation varies by state. Each state has its own laws governing coverage limits, eligibility criteria, reporting procedures, and benefits. Some states, like Texas, allow employers to opt out of workers’ comp insurance by substituting it with private insurance.

What Is FMLA Medical Leave and Sick Leave?

Some medical leave requirements are federally mandated (FMLA), and others are imposed by state governments. In many cases, sick leave programs are voluntarily designed by employers as an employee incentive.

For example, the Family and Medical Leave Act (FMLA) is a federal law that allows eligible employees to take unpaid leave for qualifying medical and family reasons without risking their job security.

Covered reasons include serious health conditions, childbirth or bonding with a new child, and caring for a family member with a serious health condition. Employers must provide a specific number of unpaid weeks of medical leave depending on the specific circumstances.

Considerations for Multi-State Employers

FMLA compliance applies to employers with 50 or more employees. Multi-state employers must ensure compliance with FMLA regulations across states, including determining employee eligibility, providing required notices, and maintaining proper documentation.

Some states have additional leave laws that may overlap with or expand upon FMLA provisions. Paid sick leave (PSL) is not a federal requirement, but states can create their own laws regarding sick time. As a multi-state employer, you may have to honor both FMLA and paid sick leave rules.

What Are Overtime Laws?

Overtime rules are designed to ensure employees are paid fairly for exceeding standard work requirements by working more than a standard full-time workweek.

Overtime laws regulate the payment of additional compensation to non-exempt employees who work beyond a standard time frame. The federal Fair Labor Standards Act (FLSA) establishes minimum wage and overtime pay requirements, including the overtime rate of one and a half times the regular rate of pay for hours worked over 40.

State-Specific Requirements

While the FLSA sets a federal baseline, states may have their own overtime laws with stricter requirements. Some states have different minimum salary requirements for exemptions, and some states don’t count bonuses toward minimum salary requirements.

States like Nevada, Alaska, Colorado, and California have daily overtime laws that differ from federal overtime requirements. California has especially different requirements for overtime thresholds.

It’s important to check state overtime laws because violations can seriously affect business owners. Always tailor your approach to overtime in states with highly specific overtime requirements.

What Are Workplace Safety Regulations?

Workplace safety regulations can save lives. These regulations are vital in construction, warehouse, or factory environments where employees often perform demanding physical labor or work with machinery. Still, all workplaces must abide by regulations regardless of the nature of the work performed.

Workplace safety regulations aim to protect employees from hazards and ensure a safe working environment. The Occupational Safety and Health Administration (OSHA) sets federal standards for workplace safety.

Blanket requirements apply to all workplaces, while more specific requirements address common risks or hazards in industries with higher workplace accidents or injuries.

Multi-State Compliance Challenges

OSHA regulations apply nationwide, but some states have their own safety and healthcare programs approved by OSHA. Approved state plans may have additional requirements or standards that exceed federal regulations. Satisfying the bare minimum for federal requirements won’t be sufficient in cases where state requirements exceed federal.

How To Comply With Labor Laws as a Multi-State Employer

Labor law compliance for multi-state employers involves a lot of research. General knowledge can apply to every state where you operate, but state-specific requirements can change how you implement policies in certain workplaces.

Note All Applicable Labor Laws

Start by identifying the relevant labor laws that apply to your organization based on its location(s), industry, and number of employees.

Labor laws include but are not limited to:

Family and Medical Leave Act (FMLA)
Occupational Safety and Health Act (OSHA)
Fair Labor Standards Act (FLSA)
Americans with Disabilities Act (ADA)

Then, determine if the states where you operate have added to or modified provisions of federal labor laws. States can never take away from federal labor laws, but they’re free to add enhancements that improve working conditions, compensation, or employee considerations.

Review Existing Policies and Practices

Conduct a thorough review of your organization’s existing policies, procedures, and practices related to employment law. Do a deep dive into policies like hiring, wages and working hours, workplace safety, discrimination and harassment prevention, benefits, and leave policies.

The policies you originally created were likely written to observe the labor laws of the state where your business was initially formed. As long as those policies remain compliant with state laws, you can continue to use them in your home state.

Some policies may be valid in every state, while you may need to revise specific policies for use in other states. Dial in on incompatible stipulations or rules and modify them to suit each state’s requirements. You can keep the core of your policies the same as long as they’re compatible.

Check Posting Requirements

Verify that all required labor law posters and notices are displayed in a conspicuous workplace area where employees can easily access them.

Posters typically cover information on minimum wage rates, the Equal Employment Opportunity Commission (EEOC), FMLA rights, OSHA safety standards, and other pertinent regulations. Posters must be current and specific to the federal requirements for your industry and each state’s specific labor laws.

Stay Informed About Updates

Labor laws and laws that impact wage or hiring practices can change at any moment. Appoint at least one HR professional in every state to stay on top of pending legislative changes that may require updates to your workplace policies. You may be able to make changes to avoid lapses in compliance preemptively.

Mosey Makes Multi-State Labor Laws Easy

Mosey’s compliance management platform simplifies researching state and local business compliance requirements. Our dashboard can show your HR team all applicable requirements for each state or municipality you operate in, then walks them through the next steps with just a few clicks.

We’ll keep track of everything you need to follow as a multi-state employer and put you on the fast track to compliance. Schedule a demo with Mosey to learn how compliance automation can simplify your operations.

The Platform for State and Local Compliance