Multi-Jurisdictional Issues in Today's Remote Workforce
You are an employer located in Columbia, Maryland, with a mobile workforce, which travels to client sites around the state and into the District of Columbia and Pennsylvania. One of your employees, who regularly works between sites in Montgomery County and the District needs to be out because his child’s school has been closed by order of the county government. You look to your policies and see that your employee has no more paid vacation leave available, and only one day of sick leave left. Since your policy limits the use of sick leave to only those categories of leave permitted under Maryland law, you tell the employee that he will need to take a day of unpaid leave, because he is not eligible for paid sick leave.
Shortly thereafter, a letter arrives in the mail, stating that you violated the terms of the Montgomery County Sick and Safe Leave Act. But how can that be? You are not a Montgomery County based business. Under that local law, however, where your office is located does not matter. Also, unlike the State leave law, the Montgomery County law provides for the use of sick leave in such a circumstance.
With this particular employee, moreover, you may have to deal with three potentially applicable sick and safe leave laws. Because this employee spends his time in the District of Columbia, he may be eligible for leave under the D.C. law as well. The D.C. Sick and Safe Leave Act covers any employee who spends more than 50% of their time working in D.C. If an employee spends less than 50% of their time in D.C., but doesn’t work in any other state for more than 50% of their time and Washington D.C. is their primary place of employment, then they are also covered by the law.
These are just two examples of common multi-jurisdictional issues that arise with today’s mobile workforce. Issues also routinely arise with respect to employees in remote locations who “telework” from home or a client site. A Maryland employer with a single employee working from her home and visiting clients in the Bronx, for example, may present other issues.
Last year, New York State enacted a broad anti-sexual harassment law. The law applies to all employers of employees in the state. Among the requirements are mandatory employee training and notice to employees of the company policy against harassment. The policy must also include certain elements required by the law, such as information regarding where an employee may file a complaint or a charge of discrimination, as well as a complaint form. Because the same employee is working in New York City, they will also be covered under the new grooming standards under New York City’s non-discrimination law; a law that protects persons with braided or cornrowed hair, for example.
Laws also vary greatly among states as to when paychecks must be paid, whether and how workers are to be notified of their status (exempt/non-exempt) under applicable wage laws, and, more particularly, when a final paycheck must be paid. In California, an employee who is terminated is entitled to a final paycheck immediately. Employees who quit their employment without advance notice, however, must receive their final paycheck within 72 hours. If the employee quits and gives at least 72 hours' notice, the final paycheck is due on the employee’s last day.
Employers who fail to pay on time face steep penalties, known as the “waiting time penalty.” The waiting time penalty is an amount equal to the employee's daily rate of pay for each day the wages remain unpaid, up to a maximum of thirty (30) calendar days. As one can imagine, the penalty adds up quickly, and there is little room to negotiate the penalty down once the State Department of Labor becomes involved. And keep in mind, California also protects employees by requiring that employees are entitled to payment of all accrued, unused vacation or PTO in their final pay. Employers whose policy does not permit payout on termination cannot enforce such a policy in California, and if they do, they will suffer the “waiting time penalty.”
These are but a few examples of the many ways in which having employees across multiple jurisdictions can present problems for the human resources team. Other, less obvious examples might include coverage where no employees work at all, but where conduct which runs afoul of local laws may occur. For example, there is an opinion from a D.C. court finding that the D.C. Human Rights Act applied to sexual harassment and discrimination occurring in the District, even though the employer’s office was located outside the District, and the employees involved worked at that office. It was enough that the discriminatory acts – workday trysts at the harasser’s apartment in D.C. – occurred in the District for the Human Rights Act to apply. This made a significant difference in the case, as damages under the D.C. law are not capped as they are under federal Title VII law and Maryland law.
It would be possible to provide many more examples of potential traps that await unwary employers with remote or traveling employees. With the increase in local legislation, including increased protections from harassment, wage theft, and localized minimum wage laws, employers can no longer be complacent in assuming their local law will govern how they interact with their employees. In many cases, such an assumption will be simply wrong, and it could have a serious financial impact. A little foresight and preparation can prevent real problems in the future.