Multi-State Employee Handbooks: What Should They Include?

Steve Kuhn
August 10, 2022

Employee handbooks are fundamental for reinforcing human resources policies and supporting compliance with employment regulations. But as your organization expands into new geographies, you become subject to additional laws and regulations. That can make multi-state employer handbooks challenging to create.

While multi-state handbooks should include all of the basic policies that are standard across your business, you may encounter significant differences when it comes to specific policies in different locations. The question facing many employers: Should you set policies that are specific to state and local laws, or can universal policies cover all scenarios? 

For multi-state employers, handbooks spell out how you’re navigating differences while providing a consistent experience across the workforce. Learn how to prepare a handbook that maintains compliance and signals the value you place on each member of your workforce.

3 Challenges of Drafting Multi-State Employee Handbooks

Writing policies for multi-state workforces raises potential problems with maintaining consistency and fairness across different locations. As you draft policies for your multi-state workforce, consider how these challenges may affect your employees.

Balancing Compliance With Consistency

Multi-state organizations are subject to different state and local laws. Some states, like California, have rules and regulations that are vastly different from most other states and the federal government. Some of these differences are substantial enough to affect your HR policies.

So how should you tackle these differences in your employee handbook? Can you create a single policy that is compliant across a patchwork of laws? This might be possible if your business operates in states with similar laws or that defer to federal law. But such consistency isn’t always possible.

That inconsistency can have a negative impact on your company values and culture. Most companies emphasize fairness as a value, for instance, but applying different policies across the workforce will contradict that message.

Creating Fair Guidelines Across States

Depending on which state and local laws your business is subject to, some employees may be entitled to different standards for overtime pay or different amounts of paid leave. To the rest of the workforce, it may appear that those employees are receiving an unfair advantage. 

Employees in Rhode Island, for example, are entitled to up to 40 hours of paid leave per year, while many other states defer to the federal government’s unpaid family and medical leave requirements.

Employers that give the impression that employees in one location have unequal advantages can cause friction within the workforce, which can quickly become a problem for your talent strategy. 

Delivering a Uniform Employee Experience

Providing experiences that are inconsistent or that employees perceive as unfair can damage workforce morale. These employees may lose faith in company leaders or feel that their work is less valued. All of this can undermine your credibility and lead to employee mistrust and disengagement.

Although delivering a uniform experience across differences in state and local laws is a challenge, it’s important for the long-term health of your organization. 

4 Areas Where State and Local Laws May Diverge

Multi-state employers face an assortment of employment laws that can affect HR compliance. Read about four areas of potential compliance risk that can complicate employer handbook policies.

Reasons for Employment Termination

Most states abide by at-will employment rules, allowing employers to terminate employees for any reason (as long as it isn’t discriminatory or illegal). But many states are at will with exceptions, with the most notable example being Montana, where employment is only “at will” during a set probationary period. After that, employers must provide a just cause for termination.

Discrepancies between states can complicate termination policies. Depending on where you’re operating, consider providing examples of just cause that may be used to justify employment termination.

Mandated Overtime Pay for Nonexempt Employees

Many states follow federal regulations regarding overtime pay for nonexempt employees. Some states and local jurisdictions, however, have additional laws and regulations for paying nonexempt employees who work more than a set number of hours in a specific time frame.

California, for example, has stringent overtime guidelines that require employers to pay nonexempt employees time and a half their regular rate of pay for any hours worked in excess of a standard eight-hour day. Differences in overtime policies — or any policies related to compensation — can be a source of friction among employees entitled to different rates of pay.

Drug Testing in States Where Marijuana Has Been Legalized

Drug policies for multi-state employers are becoming increasingly inconsistent across jurisdictions. In many states, marijuana has been legalized for medical and recreational use, which can complicate traditional drug policies that employers attempt to set or enforce.

In some jurisdictions, legislation has restricted the use of pre-employment testing for marijuana products. Employers in New York City, for instance, cannot use the results of a positive test as a condition of employment

Meanwhile, at the federal level, marijuana remains classified as a Schedule I drug. The conflict between federal and state laws regulating the substance can further complicate drug policies for multi-state employer handbooks. Certain federal agencies, such as the Department of Transportation, enforce higher standards for employees who operate in certain roles, such as those that require a commercial motor vehicle license. Keep these factors in mind when drafting drug testing policies for your workforce.

Requirements for Family and Medical Leave

Family and medical leave requirements can vary widely by state and local jurisdictions. Some states provide employees with paid family leave, and some states go further and offer leave for parents to attend their children’s school functions. 

For example, D.C. offers more than one type of parental leave. The district provides up to eight weeks of paid leave for new parents to care for and bond with their child and two weeks of paid leave for prenatal care. Some states, like New Jersey, also mandate paid medical leave, often referred to as temporary disability leave, for employees to recover from a serious illness or injury.

Other types of leave also vary by jurisdiction. In eight states, for example, employers are required to pay employees for time spent on jury duty. When designing leave policies for your workforce, it’s important to understand the different requirements your organization is subject to. The knowledge you gain can inform your decisions moving forward.

3 Best Practices Integrating State and Local Laws With Universal Policies 

Creating consistency at the corporate level is one of the first steps to building a culture of fairness and equity. Consider implementing these best practices for policies that create a universal standard while upholding compliance across individual locations.

Give Preference to the Most Generous Laws

To be fair to all of your employees, regardless of where they’re working from, consider writing policies based on the relevant laws and regulations that are most generous to employees. This signals that you prioritize employee experience and well-being over compliance alone.

Giving preference to the most generous laws is especially important with regards to pay. When employees located in certain states receive overtime pay that isn’t given to other employees, the less compensated employees will perceive this as unfair and an inequity — even if you aren’t legally required to do so.

Develop people management best practices to help supervisors in different locations implement universal policies appropriately. You might opt for a more generous overtime policy, for example, but want to reduce the risk of higher labor costs. In that instance, develop a minimum staffing policy that helps supervisors mitigate the need for excessive overtime hours.

Consult an Employment Lawyer

The best thing to do when drafting multi-state employee handbooks is to consult an employment lawyer. They can help you navigate state and local legal differences, and they can review the language in your policies before you share them with employees.

Employment attorneys can be a tremendous help in drafting universal policies that comply with all of the laws and regulations affecting your business. Every employer faces a different set of circumstances depending on where your workforce is located. An employment attorney can help write policies that maintain consistency without putting compliance at risk.

As your company expands, employment counsel can help you decide how to adapt to new laws and regulations while ensuring the least amount of disruption to your existing policies.

Review and Update Your Handbook Regularly

Laws change, and new employment legislation and regulations are always on the horizon. Make it a point to revisit your employee handbook on a regular basis.

Schedule annual reviews of your employee handbooks. These reviews will likely result in policy updates, clarified language and other modifications. This process should include stakeholders from HR, payroll or finance, and your legal team to provide insights into policy decisions.

Stay alert to events that might necessitate an unscheduled review of your handbook, such as expanding into new states or legal changes in jurisdictions you’re already operating in. Your employment attorney can help you monitor legal changes that prompt policy updates.

Find Your Balance

Drafting multi-state employers’ handbooks is an exercise in balance. Finding the right equilibrium between compliance and consistency is a challenge — but it’s one that’s worth overcoming. 

Employers that don’t make an effort to draft fair and thoughtful employee policies put employee morale and retention at risk. But when employees see that you’re invested in creating a fair work environment, they’re more likely to have a positive employee experience, which drives engagement and productivity.

As you expand into new jurisdictions, make sure you have a multi-state employer handbook that ensures compliance and provides a consistent employee experience.

Steve Kuhn
Chief Sales Officer
Senior Sales Professional with 20+ years of strong executive experience, selling software solutions and building relationships in Enterprise and Mid-Market.

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