Employers must comply with state regulations unless Federal regulations demand more. In other words, state law supersedes Federal law only when it is more expansive than the Federal requirements. For example, Federal Labors Standards Act (FLSA) spells out the parameters of employee compensation, including time off.
On the other hand, an increasing number of states and some cities have more employee-generous rules. So, it is becoming harder to administer compensation without human resources information technology, and increasingly difficult to manage the paid time off (PTO) headache without HRIS help.
California:
Many California employers combine time off for illness, vacation, floating holidays, and personal time.
This PTO is okay, but the California Labor Commissioner considers the entire sum of time off, regardless of what you call it, is earned vacation hours that must be paid out at employee termination.
Connecticut:
Connecticut law now requires employers of 50 or more to provide one hour of paid sick leave for every 40 hours/week worked by service workers. The law also redefines how you count the 50 employees, adds radiological technicians to the coverage, and excludes manufacturers.
District of Columbia:
Washington, D.C. regulations let workers take paid sick leave after 90 days instead of one year. It also offers paid sick time to temporary and tipped workers. More complicated, employers must restore accrued leave to individuals who have transferred work from outside the District to inside within one year.
Massachusetts:
New regulations in Massachusetts permit a worker to use sick time to care for himself or herself or for an ill spouse, child, parent, or parent of spouse. The absence may be for physical or mental illness, an injury or medical condition that requires home care, professional medical diagnosis or care, preventative medical care, or routine medical appointments. And, it firmly excuses time off to address psychological, physical or legal effects of domestic violence. Employers are not required to offer paid time off, but they must give one hour of sick time for every 30 hours worked from the date of hire. The employee is entitled to 40 hours of earned sick time in a calendar year, even if the leave is not paid.
Other states – Oregon, New York, and more – have raced to meet or exceed Federal requirements on leave. What’s at issue here is the administrative difficulties this raises.
Suppose your business is headquartered California, and you have a chain of retail stores with new locations in Arizona and Nevada. Of course, you have to comply with California rules. But, how do you treat employees who live and work outside California? You can save considerable money by payrolling them in compliance with less liberal Arizona and Nevada regulations. However, that presents a new problem among the employees who know they are being paid differently for the same work and a new possibility of discriminating in compensation.
Or, imagine your business is domiciled in Connecticut, but you have employees who live and work in Massachusetts and New York. How do you accrue their respective paid time off when their states have different rules? You can pay them in accord with their respective state requirements, but you again wind up with inconsistent and potentially discriminatory payroll.
Deciding to treat employees according to the most liberal standard is the employer’s decision on policy, and administration is simpler because it is consistent. Deciding to honor the respective state regulations is legitimate, but sorting, accruing, and paying according to the varying rules becomes complicated.
HRIS solves these complications. It easily tracks accruals according to the directions you enter, and it can simultaneously differentiate and follow separate regulations. HRIS justifies its own existence when it solves such problems. You need to know the laws, update your system to keep it current, and then let it manage your PTO headache.