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On February 1, 2019 the Keene Sentinel reported that a
Massachusetts construction company had been hit with more than
$64,000 in fines after an audit conducted by the New Hampshire
Department of Labor. Although the bulk of the fines were related to
the misclassification of employees as independent contractors,
there were also a number of recordkeeping violations found.
The Keene Sentinel article devotes significant
attention to the problems of trying to classify individuals as
independent contractors under NH state law, a very difficult burden
to meet. The result of the audit and the fines imposed on the
business, however, showcase how difficult it is for businesses who
typically do not operate in a state to establish a workforce there
and be in compliance with state laws.
In comparison to many other states, New Hampshire is highly
regulated and has a myriad of state laws and regulations governing
the employer/employee relationship. Not only do these laws differ
from state to state, they also co-exist with federal laws
addressing the same issues, but sometimes in different ways. From a
national chain with locations in every state, to a small business
with remote employees working from their homes to a small
construction company which decides to cross the border to take on a
project, it is incumbent upon the business to be fully aware of the
laws which govern interaction with a workforce. Failure to do so
can result in civil fines and penalties or worse, law suits by
aggrieved employees. This is not an easy task as in most states,
the information is not neatly contained in one place.
By way of example, more than 25 states, counties, and
municipalities have enacted paid sick leave legislation, and the
requirements differ. Many states, including New Hampshire and
Massachusetts, have laws indicating when a terminated employee
needs to paid; but the time frames are not the same.
How does a company with a multi-state workforce manage these
issues?
Businesses should consult with
experienced employment counsel when considering a move to a new
state. Being proactive by reviewing recordkeeping requirements,
parental leave laws, regulations about time off is critical and can
avoid trouble.
Employers should be particularly
vigilant if the company does not have a strong management or HR
presence in a state where it employs people. Attention to detail,
knowledge of the workforce and the issues which may arise, and
proactive business sense are critical.
It is a good idea for the business to
become invested in the local community where it does business.
Interacting with local human resource and business organizations as
well as the Chamber of Commerce will make business representatives
aware of workforce challenges facing local businesses and give
insight into the particular laws or regulations which challenge
employers the most.
It is also important to read!
Subscribing to blogs and newsletters, even reading the local
papers, can provide important information about upcoming or recent
changes in the law.
Most importantly, companies doing business in one state should
not assume that what they have done there will be acceptable, even
across the border in a neighboring state. The law which is most
protective to the employee will apply when two potentially
applicable laws collide, and it is critical to know them both to
stay out of legal trouble.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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