Is Your Staffing Firm in Compliance with the Myriad of Local Laws?

As if it wasn’t hard enough for recruiting and staffing firms to keep up with the ever-growing number of state and federal regulations, we are noticing more localities (counties, cities, etc.) creating their own employment laws. Even if you follow every state and federal law to the letter, you could find yourself out of compliance with little known local laws. And figuring out if a local law applies to you can be challenging. Some local laws apply only to companies based within city the limits. Others kick in when you have a certain number of employees working in the locality.

Here are some of the most common types of employment laws to watch for on a local level:

1. Paid Sick Leave (PSL). To date, six localities require mandatory PSL: Washington, D.C.; San Francisco, CA; Portland, OR; Seattle, WA; Jersey City, NJ; Newark, NJ (effective 5/29/2014); and New York City, NY (effective 4/1/2014); in addition to the state of Connecticut.  This just shows how quickly employment law moves. When we wrote about this issue just 10 months ago, PSL was not mandated for Jersey City, Newark,  or NYC. Several other states and localities have pending legislation or tasks forces working towards getting PSL required. PSL is one of the most difficult local employment laws to implement.  Each locality has their own rules for who qualifies and how paid sick time must be accrued by employees, making tracking a nightmare.
2. E-Verify. E-Verify is the federal online system that checks information on an employee’s I-9 against data from the Social Security Administration and Department of Homeland Security to ensure that they are authorized to work in the United States. At the present time, federal law only requires certain federal contractors to use the system. However, there are a number of state, city, and even county laws to consider before you decide that you can forgo E-Verify.  Again, half the challenge when you realize there is a local law is figuring out if that law applies to you.  Some only require E-Verify for government employees and contractors while others require all employers to use it.
3. Background Checks. Can you ask about a person’s criminal background on an employment applications? That depends on the location.  According to Human Resources Executive Online, 43 localities have “ban the box” legislation that makes it illegal for employers to ask questions regarding criminal background on an employment application.  In addition, 10 states (most recently California) have similar laws. Be aware that, even if you don’t have contractors in areas that prohibit questions about criminal background on the application, you could be at risk for a discrimination lawsuit under the 1964 Civil Rights Act if your background check procedures disproportionately eliminate minority candidates.
4. Drug Screenings. Most states have laws regarding how employers can utilize drug screenings for employees, but staffing firms must also contend with a handful of municipal laws. For example, San Francisco prohibits mandatory drug testing unless the employer has “reasonable grounds to believe that an employee’s faculties are impaired on the job” and that the impairment presents a danger to the safety of the employee, other employees, or the public.

This is not intended to be an exhaustive list of all of the local employment laws.  It’s just intended to show you the wide variety of local laws out there and to point out how important it is to keep up with the laws in all of the localities in which you have contractors.  If this seems overwhelming, you may want to consider outsourcing the employment of your contractors, especially those outside of your home state, to a contract staffing back-office service.  Then your contractors will become W-2 employees of the back-office provider, making the back-office responsible for complying with all the federal, state, and local employment laws.

This article is for informational purposes only and should not be considered legal advice.