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Multistate Employer

Author: Erin M. Reid-Eriksen, Littler


  • When deciding whether to open an office in a particular state, many multistate employers first assess the state's employment-related compliance obligations. See State Developments and Themes.
  • Multistate employers must put into place the proper procedures to handle hiring and onboarding new employees without running afoul of federal and state laws. Job applications, background and credit checks, preemployment inquiries and other screening methods are important components of the hiring process. See Hiring and Onboarding.
  • In drafting employment applications, multistate employers must consider the applicable state and local requirements, including variances in equal employment opportunity statements, restrictions on the type of information that may be requested of an applicant (e.g., Ban-the-Box laws) and specific legal disclosures that must be included. See Employment Applications.
  • If a multistate employer chooses to use preemployment testing as a method to screen for qualified applicants and/or require drug testing for applicants or employees, it must be aware of the varying state restrictions on such testing. See Preemployment Testing.
  • Multistate employers must contend with federal immigration requirements and must also be aware of state or municipal requirements, including the mandatory use of E-Verify, a federal program allowing employers to electronically verify newly hired employees' work authorization documents. See Immigration Compliance.
  • Multistate employers may consider maintaining an employee handbook that includes all nonstate-specific policies and procedures and refers the employee to a corresponding, state-specific policy or procedure manual. See Employee Handbooks and Work Rules.
  • State labor departments and civil rights agencies are increasingly taking measures to make sure employees are informed of their rights. Those requirements are frequently updated, and multistate employers should be aware of, and comply with, any updates. See Employee Notices and Postings.
  • State and local antidiscrimination laws prohibiting discrimination, harassment and retaliation may extend protection to groups of employees who are not protected under federal law. Multistate employers should consider including a "catch-all" provision to their EEO statement that covers federal, state or local law." See EEO, Discrimination, Harassment and Retaliation.
  • Employers in some states must invest additional resources to comply with state mandated training requirements. Employee training and effective reporting mechanisms addressing how to handle complaints when they arise may reduce risk and should be part of each multistate employer's compliance strategies. See Employee Training and Development.
  • Many states have their own minimum wage and overtime laws that may provide higher wages or more protective wage and hour policies than federal law. The wide variety in wage and hour practices across states and localities demonstrates that multistate employers cannot take a one-size-fits-all approach. See Wages and Hours.
  • Multistate employers need to be aware of state law variations in how to handle employee surveillance, access to employees' online social media accounts, employment background and credit checks and drug testing. See Employee Privacy.
  • Most state labor laws, except for right to work laws and a few others, are pre-empted by the federal National Labor Relations Act. See State Labor Laws.
  • Many states have enacted their own laws providing for family and medical leave, posing a compliance challenge for multistate employers. See Leave of Absence Policies and Practices.
  • At the end of the employment relationship, a multistate employer should be aware of a variety of issues relating to the payment of final wages, communicating the termination decision, document retention and other federal or state law requirements. See Post-Employment Relationship.
  • A multistate employer must determine whether a centralized HR department, decentralized HR department or a combination centralized and decentralized HR department will be best suited to support the workforce and the employer's strategic business objectives. See Centralized or Decentralized HR.