How to Comply with New State and Local Laws

Minimum Wage Action Items

• Determine the minimum wage for all municipalities and states in which your company does business.
• Decide whether to pay all employees at the highest wage rate, to make sure you’re complying with all laws, or to set pay on a jurisdiction-by-jurisdiction basis. 
• Know where all employees are working, particularly those who travel among 
jurisdictions.
  
• Keep in mind the impact of minimum wage on determining who’s an exempt employee.
  

Pay Equity 

State laws aimed at narrowing the pay gap between men and women address two different areas: 

• Pay equity, which is the principle that employees should be paid fairly and that any discrepancies should be justified by business reasons.
• Prohibitions on asking job applicants their salary history.

Recent state pay-equity laws go beyond the federal Equal Pay Act, Segal says. While federal law mandates equal pay for equal work, some states require equal pay for “comparable” or “substantially similar” work. States that have recently passed such legislation include California, Maryland, Massachusetts, New Jersey, New York, Oregon and Washington. 

Such laws generally provide the same defenses—seniority, performance, experience and sometimes location—to claims of unequal pay, Segal says. 

How should HR respond to these new pay-equity laws? 

If you’re trying to determine whether you’re paying your employees equitably, the first step is to know what you’re paying them, Visconti says. She recommends that employers conduct compensation audits to answer this initial question. 

“Let’s establish a base line for what you’re paying people and whether there are differences among people performing similar jobs,” she says. Next, ask why these differences exist. If people performing similar jobs are paid differently but there’s a substantial difference in experience, that might be allowable under state law. But if you don’t know why there’s a discrepancy, you might have to address the differences, she says. 

One other important factor in complying with pay-equity laws is making sure that all job descriptions accurately reflect the work that employees are actually doing. Pay-equity statutes require paying people performing similar jobs similarly. If you have people performing different jobs, make sure that they have different titles and different job descriptions. “You want to be able to say two jobs are different,” Visconti says. 

The last important piece is training. Decision-makers and recruiters must understand what they can base pay decisions on and what they cannot under these statutes. 

At least eight states, including California, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Oregon and Vermont, ban employers from asking applicants for employment about their compensation at previous jobs. And at least 12 municipalities have also enacted their own laws prohibiting such inquiries, McDonald says.

The rationale behind these laws is that employers should be setting pay grades and salary ranges for particular jobs instead of perpetuating wages that might not be equitable compared to what others are making, Visconti says.

Multistate employers must decide if they want to stop asking about prior salary in all jurisdictions or only in those where required by law. HR should consider whether the company “really needs prior compensation in deciding what to pay new employees,” Segal says. 

Marijuana

While marijuana use remains illegal at the federal level, 33 states have legalized medical use, and 10 states have also legalized recreational use.

When discussing marijuana, it’s easiest to say what’s not protected, says Michael Clarkson, an attorney in Ogletree Deakins’ Boston office. Except in Maine, there’s no workplace protection for the use of recreational marijuana, he says. And as for medical marijuana, there’s less workplace protection for it than there is for other medically protected drugs. “You cannot possess marijuana at work,” Clarkson says. “You cannot use marijuana at work. You cannot be high at work.” 

But whether an employer can terminate or fail to hire an employee for testing positive for marijuana if that person has a legal medical marijuana identification card (MMID) probably depends on where you’re located. Several courts have ruled that employers can uphold workplace-free drug policies because marijuana use violates federal law. However, more than a dozen states have passed laws to explicitly prohibit workplace discrimination against medical marijuana patients. 

And while the federal Americans with Disabilities Act (ADA) doesn’t protect illegal drug use, which includes marijuana use because it’s illegal under federal law, many states have nondiscrimination laws similar to the ADA. Court decisions under these state laws are divided. Judges in some states have ruled in favor of employers, while others have ruled in favor of employees, says Lauraine Bifulco, president of Vantaggio HR in Orange County, Calif.

Formulating policies regarding medical marijuana may be particularly troublesome for multistate employers, Segal says. How do you have a universal rule when laws differ so much from state to state? A growing number of multistate employers are deciding not to test for cannabis except where required by law, such as where Department of Transportation regulations require testing, Segal notes.

Many of the states that have legalized recreational marijuana include language in their statutes permitting employers to continue to maintain zero-tolerance policies based on federal law. Several states, however, are silent as to whether employers may limit or regulate an employee’s use of marijuana outside the workplace. 

Unlike with medical marijuana, the state laws that may come into play regarding recreational marijuana use are not disability-bias laws but those that center on invasion of privacy and protecting employees’ off-duty conduct, Bifulco says.

The New York City Council passed legislation that will ban pre-employment testing for marijuana, though many exceptions apply. Maine became the first state to protect employees’ use of marijuana (not just medical marijuana) outside the workplace. However, employers are still permitted to prohibit use at work and can discipline employees for being under the influence while on duty. 

Under most drug-testing programs currently used by employers, a positive marijuana test will not indicate whether the marijuana use happened on or off duty, Bifulco says. Keeping that in mind, HR should ask a number of questions before deciding whether to test for marijuana, she advises, including: 

• How much of a concern is safety in our workplace or in certain positions?
• Is medical marijuana legal in our state, and, if so, are medical marijuana identification cardholders protected from employment discrimination?
• Is recreational marijuana legal, and, if so, are employers permitted to enforce zero-tolerance policies?
• Does our state have laws regarding off-duty conduct or relevant privacy laws?

Furthermore, in this current economic environment of low unemployment, many employers outside of safety-sensitive industries are taking marijuana out of their drug-screening protocols because refusing to hire those who test positive would create staffing problems, Clarkson says. 

Bifulco offers four suggestions for HR:

• Start thinking of marijuana in the workplace as you think of alcohol. 
• Accommodate MMID holders, assuming there’s an underlying disability.
• Focus on prohibiting use, possession and impairment in the workplace.
• Focus on safety and testing when there’s a reasonable suspicion of workplace impairment. 
  

Conservative states are also getting on “the marijuana bandwagon,” Clarkson notes, since those legislators see the financial benefits being enjoyed by states like California, which taxes marijuana at 15 percent and expects to make a billion dollars a year. 

“That will get the attention of even red-state governors,” Clarkson says.  

Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.