The situation is becoming worse as more states adopt worker-friendly regulations, different both from the national standards and from the regulations of other states.

In recent years, states have revisited and modified laws on a variety of topics:

• Religious exemptions

Several states are interpreting religious exceptions to state regulation more narrowly, creating additional risk that religious organizations will be held liable if they do not follow the generally applicable regulations.

• Paid sick leave

Multiple states now require employers to pay employees when the employees take sick leave. The amount of paid sick leave varies from state to state, as do the covered reasons for leave and acceptable practices for requesting leave.

• Paid family and medical leave

Increasingly states are devising means to pay employees for time taken off for family leave, as well as for extended sick leave.

• Pregnancy leave

Several states have reacted to court decisions by adopting new standards for pregnancy leave and accommodations for pregnancy-related medical conditions.

• Equal pay

Several states have made stricter laws requiring equal pay for men and women and for persons with different ethnic backgrounds.

• Job postings

Some states now require employers to post wage ranges along with notice of any open position.

• Contractor bills of rights

Some states are adopting contractor bills of rights that mandate paying certain classifications of workers at least the average compensation and benefits offered to regular employees performing similar work.

• Expanded protected statuses

States have expanded the categories of people protected from discrimination by including, e.g., marital status, hair style, clothing, etc.

• Nondisclosure agreements

Many states have adopted restrictions on nondisclosure agreements, especially if the agreement would prevent workers from disclosing sexual harassment.

• Restrictive covenants

Many states have revisited their laws concerning covenants not to compete, making it more difficult for employers to protect their business relationships and intellectual property.

The Multi-State Maze 

A recent court decision even held that a corporate entity cannot rely on the location of its headquarters to establish the entity’s domicile for purposes of federal jurisdiction. If the high-level executives live in another state, that other state might be the entity’s domicile.

In light of the many divisions over employee rights, religious employers should consider carefully before allowing employees to work remotely from states other than the employer’s headquarters state. Employers may choose to limit the states in which they employ people in order to limit their risk and to facilitate policy making.

Employer Implications

If an employer does hire an employee who will work in a new state, the employer must determine whether it now must register to do business in the state; the scope of any state exemption for religious organizations; whether and how to enroll in unemployment benefits and workers’ compensation; and the extent to which the employer will be subject to the new state’s employment laws, given its size and the number of local employees.

For state laws that apply to religious employers (and for religious employers that choose to comply, as much as possible, with generally applicable law), multi-state employers will need to revise their existing policies. In each case, employers must also research the posters and policies the states require employers to publish to their workers.

Some employers choose to identify the most worker-friendly rules and apply them nationwide. Typically, this solution increases the costs of providing for the workforce. Other employers adopt separate policies for separate states, risking confusion and further division within the workforce. Neither approach will resolve the basic tension caused by competing regulation.

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William A. Wright, JD, Ph.D., is Senior Counsel Member with Sherman & Howard, LLC. For 25 years, he has advised employers on all employee-relations matters, including policies and procedures, investigations, workplace audits, confidentiality and restrictive covenants, leave administration, accommodation issues, disciplinary actions, hiring processes, reductions in force, and termination decisions. He has decades of experience representing employers in federal and state court proceedings across the country and before federal and state agencies.

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