Key State Employment Law Trends Every Business Must Know

Being aware of current employment law trends in the state or states where your company operates is essential to remaining legally compliant and proactively addressing high risk areas in an economical fashion. This awareness can lessen the chance of costly lawsuits and bad publicity.
Below is a snapshot of some of the various issues percolating at the state level that employers of all sizes should be aware of.

1. Social Media Privacy Protection
As social media use in the workplace continues to climb, so does the trend among the states to pass laws to protect an employee’s social media privacy. Generally, these laws make it illegal for employers (including small employers) to ask or require job applicants or employees to provide their social media user name, password or other information needed to access such accounts. In addition, employers cannot retaliate against employees or applicants who refuse to provide such information.

Maryland Gov. Martin O’Malley signed the first social media privacy protection law in May 2012, and California, Illinois and Michigan followed suit. Similar legislation has been introduced in a handful of other states, such as Delaware, Maine, New Jersey and Ohio.

The trend toward social media privacy protection legislation is not just at the state level. In February 2013, the Social Networking Online Protection Act (SNOPA) was reintroduced in Congress. SNOPA would prevent employers from seeking social media passwords and other online account information from employees and applicants and from penalizing employees for refusing to provide such information.

Due to this trend, employers should update their workplace policies and practices in accordance with their state law, and train supervisors and managers to not request private passwords and account information or take an unfavorable action against an applicant or employee, such as fail to hire or fire them, if they do not provide the requested information.

2. Ban the Box
Many employers weed out prospective employees who have criminal records. However, because many convicted criminals could not find work after being released from jail, and minorities were disproportionally affected, several states and municipalities have enacted so-called “ban the box” laws that restrict employers from asking about a job applicant’s criminal history on job applications. Essentially, employers must remove the “box” on a job application that asks if an applicant has been convicted of a crime.

States with “ban the box” laws include Colorado, Connecticut, Hawaii, Massachusetts, Minnesota and New Mexico. Municipalities with such ordinances include Philadelphia, Newark, Wilmington, Baltimore, Boston, Chicago, Cincinnati, Cleveland, Seattle and Washington D.C. Depending on where you are located you may be able to ask about criminal history either during the interview or after a conditional offer of employment.

Employers need to be very careful here and check their state and/or local law since some states and municipalities have little quirky details – for example – in Newark, NJ employers cannot deny employment based on the results of a post-offer background check before the employer does an individualized assessment of the applicant’s criminal record. You may find it helpful to review the Equal Employment Opportunity Commission’s guidance related to arrest and conviction records when designing screening policies and practices.

3. Credit Checks
Knowing when to run a credit check for employment purposes is trickier than it may sound. Because statistics show that women and minorities tend to be involved in more bankruptcies and have more damaging credit reports, several states place limits on the running of an applicant’s credit report or making a hiring decision based on the results of such reports (subject to limited exceptions).
California, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington have laws that limit or regulate an employer’s use of credit checks on job applicants or employees. Many of these laws prohibit employers from using consumer credit information during the hiring process, unless the job in question involves financial decision-making, managing or controlling a business, or handling sensitive information. Meanwhile, New Jersey has a pending bill that would ban the use of credit information in any employment situation by adding financial status as a protected category under its antidiscrimination law.

You need to make sure to also comply with various federal laws that can come into play, such as the Fair Credit Reporting Act (FCRA), the Bankruptcy Reform Act of 1978 and Title VII.

4. Sexual Orientation and Gender Identity Discrimination
Currently, federal law does not prohibit employers from discriminating against an employee or applicant on the basis of sexual orientation (e.g., lesbian, gay or bisexual) or gender identity (e.g., transgender). However, at least 21 states – California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Oregon, Nevada, New Hampshire, New Jersey, New Mexico, New York, Rhode Island, Vermont, Washington and Wisconsin – have a law that provides some level of protection to employees based on sexual orientation, gender identity and/or gender expression. Municipalities, including the District of Columbia, also have similar laws/ordinances. These laws can apply to employers with as few as one employee – such as in Colorado, for example.

If you are in a state or municipality that prohibits discrimination based on sexual orientation, gender identity or gender expression, you should review your policies and practices concerning: nondiscrimination; dress and appearance standards; and use of bathrooms, locker rooms and other gender-specific locations. In addition, train employees and managers on preventing discrimination and harassment relating to gender and sexual orientation.

5. E-Verify and Immigration Status
The Immigration Reform and Control Act (IRCA) requires all employers to verify that their employees are authorized to work in the United States, which includes verifying information and documents submitted with the I-9 form. If an employer knowingly bypasses this process and recruits, hires or continues to employ an unauthorized worker, it can open itself up to large civil and criminal penalties. Some states have gone beyond IRCA in creating stricter penalties, such as taking away an employer’s business license.

E-Verify is a free web-based program that allows employers to electronically verify a new employee’s eligibility to work in the US. Employers electronically submit I-9 information, which is compared to information contained in the federal Social Security Administration’s and Department of Homeland Security’s databases.

For many employers E-Verify is voluntary. However, several states, such as Arizona, Alabama, Georgia, Mississippi and South Carolina, mandate that all or most employers use E-Verify in at least some circumstances. For example, in Arizona, all employers are required to use E-Verify to determine the eligibility of their employees – whereas in Florida, only state contractors and subcontractors must use the system.

Several states have varying E-Verify legislation pending.

About the Authors
Melissa Burdorf is a legal editor for XpertHR, an online subscription-based compliance tool to help HR professionals comply with federal, state and local and law. Ms. Burdorf is in charge of the Multistate Employer, FMLA, ADA, USERRA, Jury Duty and other forms of leave content on the site. Before joining XpertHR, Melissa served as associate counsel for a public company. In that role, Melissa provided legal advice on all company matters, which included providing advice to HR on a multitude of employment-related issues.

Matt Rawlings is a UK-based technology and business writer keeping a close eye on all of the latest trends and developments in an ever-changing world.