Bill Fallon Matt O’Rourke

© 2021 Miller Johnson. All rights reserved. 1

Bill Fallon

Matt O’Rourke

The materials and information have been prepared for informational purposes only. This is not legal advice, nor intended to create or constitute a lawyer-client relationship. Before acting on the basis of any information or material, readers who have specific questions or problems should consult their lawyer.

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If we have employees working in multiple states, do we need to comply with the laws of each state in

which employees work? YES!

Generally, state laws apply based on where the employee works, not where the employer is based

Some laws apply only to employers with a certain number of employees working in the state, but those are the exception, not the rule

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That will satisfy the “lowest common denominator” requirements in all of the states where we have employees?

And apply them to all of our employees?

Sure. But some states have requirements that are … well … crazy

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What states impose greater requirements or restrictions than we follow in Michigan – or wherever our “home” location is?

Don’t forget about ordinances imposed by cities, such as minimum wage requirements.

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Let’s look at some of the problem areas

You are likely required to register to do business in every state where you have an employee

You will likely need to withhold state or local income tax based on the location where the employee works, and to pay unemployment tax in that state

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WARNING: THIS IS A NON-EXCLUSIVE LIST

Background check lawsArrest and conviction records

Biometric Information Enforcement?

Overtime pay Requirements for overtime exemptions

Payment of Wages and PTO Upon Termination

Break Periods

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Pay Periods and Pay Days

Paid Leaves

FMLA coverage

Workers Compensation insurance

Is Marijuana use job-protected?

Personnel Records

Noncompete Agreements

Security of company information

Mini-COBRA Laws

Mini-WARN Act Laws

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Non-exempt employees are covered by federal and state minimum wage, overtime, and record-keeping requirements.

The obligation to pay for hours worked “is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that work is being performed, he must count the time as hours worked.” 29 CFR §785.12.

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Source: US DOL


Overtime Pay for Non-Exempt EmployeesAlaska, California, Colorado, Nevada, Oregon, Puerto Rico, and the

Virgin Islands all have daily overtime laws when employees work more than a specific number of hours in a day (8, 10, or 12 hours)

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“Duties tests” for Overtime Exemptions Some states impose tests that are more restrictive than the federal

tests under the Fair Labor Standards Act

For example: CA’s “Outside Sales” exemption requires that the employee “customarily and regularly spends more than 50 percent of working time away from the employer's place of business,” engaged in sales activity

Federal law has no minimum percentage

The employee’s home is the employer’s place of business

So work done at home is not “away”

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Minimum Salary Required for Many Exempt EmployeesAlaska, California, Colorado, Maine, New York, Pennsylvania, and

Washington all have a “salary basis” requirement that is higher than the current federal requirement ($684 per week/$35,568 per year)

CA = $58,240 per week

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Youth Employment Laws vary from state to state Prohibited occupations and work activities

Restrictions on hours a minor may work – during and outside the school year

Required break periods

Minimum wage deviations – “training wages”

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Additional requirements imposed in many states: Rest breaks

Meal breaks

One day of rest in seven calendar days

Errors in applying these laws can lead to huge liabilities

In some states, a break period that’s denied or not taken must be paid; and the time is often overtime

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Working from a remote location does not make a worker an “independent contractor”

The tests for independent contractor status vary from state to state The tests take several factors into account, and the location of the

person’s work is only one of them

Several states have adopted very restrictive tests for independent contractor status

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Double-check your classification of each remote employee as exempt or non-exempt – under state and federal law

For non-exempt employees, provide written instructions on how they are to record and report all time worked Instruct non-exempt employees to record all time worked, regardless

of when or where it’s performed

Define work hours, prohibit unauthorized work or overtime “You are required to work 8 hours each day, which must be between 6:30 a.m.

and 6:30 p.m.”

“You work hours are from 8:30 to 4:30, and you are required to take one 30-minute unpaid lunch break.”

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Give each non-exempt employee clear written instructions on whether reading, answering, or sending work-related messages or calls outside normal work is prohibited, required, or allowed.

Train managers and supervisors on these policies, and ensure they know when employees are on the clock

Make sure you have an FLSA “Safe Harbor” policy statement

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An employee’s injury or illness is covered by workers’ comp if it “arises out of and in the course of employment.”

Michigan: “An employee going to or from his or her work, while on the premises where the employee’s work is to be performed, and within a reasonable time before and after his or her working hours, is presumed to be in the course of his or her employment.”

For employees working in other states, you will need workers’ compensation coverage in those states

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“You must consider an injury or illness to be work-related if an event or exposure in the work environment either caused or contributed to the resulting condition or significantly aggravated a pre-existing injury or illness.” 29 CFR § 1904.5

What’s the “work environment”?

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The work environment is “the establishment and other locations where one or more employees are working or are present as a condition of their employment.” 29 CFR §1904.5(b)(1)

Working at Home: “Injuries and illnesses that occur while an employee is working at home, including work in a home office, will be considered work-related if the injury or illness occurs while the employee is performing work for pay or compensation in the home, and the injury or illness is directly related to the performance of work rather than to the general home environment or setting.” 29 CFR §1904.5(b)(7)

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Require employees to report injuries immediately

Workstation setup & inspection

Safety measures

Ergonomic/equipment standards

Limits on working outside of home office?

Fixed work hours and meal periods / breaks Knowing when an employee is working may make it easier to

determine whether an injury arose “out of and in the course of employment”

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Determine who needs remote access

Establish a remote workforce policy and obtain signed agreements

Set expectations that you will enforce the policy

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Delete

Consider requiring remote employees to use only employer-owned equipment and software

Consider requiring employees to work in a separate area of their home where others don’t have as much access

Require screens to lock automatically after a short timeout

Provide privacy protectors for screens

Require frequent password updates

Limit printing

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How are employees connecting into your network? Prohibit working from public locations or via public internet

connections

Monitor employee use

When an employee separates, immediately rescind password and remove all system access rights

How will you recover your business information?

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Train your employees about risks and expectations

Over-communicate with your employees; the more information the better

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General Rule: Employees must work at a location that has 50 or more employees within a 75-mile radius

Remote Employees: FMLA regulations state that “an employee’s personal residence is not a worksite….Rather, their worksite is the office to which they report and from which assignments are made.”

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Issues that might vary by state: Employer coverage

Employee eligibility

Accrual rates

Carryover of unused time

Reasons for use

Interaction with existing paid time off

Notice, posting, and recordkeeping requirements

Confirming proper usage (medical documentation)

Payout upon termination of employment

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Crime victim leave

Voting leave

Political convention leave

Civil Air Patrol leave

Emergency responder leave

Maternity and paternity leave

Organ donation leave

Bone marrow donation leave

Jury duty leave

School activities leave

School suspension leave

Military spouse leave

Veteran’s Day Road closures in the county where the

employer is located or the county in which the employee lives because of a state of emergency declared by the governor (yes, this is a real thing)

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2019: U.S. News and World Report ranked the “Top 10 States for Workers’ Rights”:

The laws and regulatory schemes of these states can make compliance an administrative nightmare

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1. California2. Washington3. Massachusetts4. Maine5. Oregon

6. Rhode Island7. Vermont8. Connecticut9. Minnesota10.New York


We have only ONE EMPLOYEE in Massachusetts [or pick a state]. Do we really have to follow all of that state’s rules for that employee?

Can’t we just establish a rule that Michigan law will apply to all of our employees, wherever they’re located, since they all report to a Michigan-based employer?

The “lowest common denominator” approach sounds nice, but it’s not simple

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Yes, you can. Employees don’t have a right to choose the state where they will work.

BUT, if an employee makes a claim under state law, you may not retaliate against the employee because of that claim.

Accommodating a disability under ADA:An employer might be required to allow an employee to work from

home (some or all of the time) as an accommodation of a disability.

We expect those requests will become increasingly common.

But an work-from-home accommodation does not mean the right to work in the state or city of the employee’s choice.

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William Fallon Matt O’Rourke

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Bill Fallon Matt O’Rourke