How To Handle Multi-State Employees With Conflicting Wage Laws

In this article, you can discover…

• What wage laws apply when employees live in one state but work in another.
• The documentation you’ll need to protect yourself against audits.
• The language needed in employment agreements to keep you legally compliant.

What Wage Laws Apply When Employees Live In One State But Work In Another?

The first set of laws that will apply are Federal laws, specifically the Fair Labor Standards Act (FLSA), which applies to all 50 states. California law also applies, which tends to be more specific. For example, across the country, any work over 40 hours per week is overtime.

However, under California’s labor laws, any work exceeding eight hours in a day, even if 40 or fewer hours are worked that week, constitutes overtime.

All of your wage practices must comply with Federal law, though compliance with California law is more complex in specific situations. For example, say you are a California business with remote workers, some of whom live out of state.

While California employment laws would apply to your remote workers who live in California, you may have to seek counsel from a law firm that operates in multiple states to understand which wage laws apply to your out-of-state remote workers.

It can be quite complicated, though my firm will be happy to assist you in understanding how wage laws apply to both remote and on-site workers who live in California.

What Documents Should I Include When Hiring Employees Who Work Across Multiple States?

It’s best to go with offer letters and an employee handbook. If you are offering a job to a hire who will work in a branch of your company that is out of state, you would not have to attach Form 2810.5, as this applies only in California. However, you can still offer that employee your California Law-compliant handbook, even if the employment laws in that state are less strict.

This will likely give your out-of-state workers more rights than they would typically have in the state where they work. If you wish to create an employee handbook for use in states outside of California, it would be best to consult with employment attorneys licensed in those states and ask them to review and adapt your existing California employee handbook.

Attorney Scott Shibayama is a hard-working, seasoned employment law attorney serving California. Since 1994, he’s helped employers just like you navigate both California and out-of-state employment law with unmatched care and attention.

Have questions, or in need of legal guidance? Reach out to Vision Law® for an initial consultation today.

What Documentation Should I Maintain To Protect Myself During Audits Or Wage Complaints?

Wage audits will come under the California Employment Development Department (EDD). To stay ahead of such audits, you will absolutely need your quarterly and annual payroll reporting forms detailing the payroll taxes that you have withheld from your employees’ paychecks, along with your employer portion.

Next, you will need to have truly rock-solid wage and hour policies in your employee handbook, including detailed policies on time keeping and how each worked hour, minute, and second will be documented. The handbook must also state that working off the clock is strictly prohibited.

You must have a rest period policy that authorizes and permits 10 minutes of paid rest for every four hours worked, wherein employees are relieved of all duties and remain on premises. You must also include a meal policy that provides a minimum 30-minute off-duty meal period for every five hours of work, where employees are free to leave the premises.

Each employee must also accurately record their hours worked. This means punching…

1. In for the start of their shift
2. Out for an off-duty meal.
3. Back in at the end of the off-duty meal break.
4. Out at the end of their shift.

Make sure that every second of employee time worked is recorded and paid, and be sure to audit yourself each pay period. Ensure your daily records are correct, no matter how many or how few employees you have. Look for the four required punches, and for meal breaks that last at least 30 minutes, not 29. Because such precise records are needed, I strongly recommend a digital punch-in-and-out system, not a calendar-based or text-based one.

Your employee handbook must also include California’s overtime and double-time policies. In California, any work between eight and 12 hours in a single 24-hour period is overtime. Any work beyond 12 hours within that 24-hour period is double time. You must also calculate both weekly 40-hour overtime and daily eight-hour overtime, and pay the bigger number.

If you take all of these steps seriously and complete each one, you’ll significantly reduce the likelihood of a wage claim or a class-action lawsuit. The latter allows one employee to bring a lawsuit on behalf of all of their co-workers, and can become quite expensive. Precise record-keeping, careful payment of workers, self-audits, and well-worded, compliant employee handbooks are all key to avoiding legal trouble.

When Should Legal Counsel Step In To Assess My Employment Practices?

If you keep careful records, ensure every second of worked time is documented and paid, self-audit, comply with California’s employment laws, and have an up-to-date, compliant employee handbook, you should be well protected legally.

If you would like me to audit your payroll out of an abundance of caution, I can certainly produce that service for you. I’ll request a copy of your employee handbook, two to three employee time records, and those same employees’ paystubs. This will help you get a better sense of whether any adjustments to your payroll practices need to be made to ensure compliance.

Still Have Questions? Ready To Get Started?

For more information on staying compliant with multi-state wage law, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (855) 534-1541 today.