Dear Rita: Our Northern California nonprofit provides job coaches to clients in the community. Our job coaches work in different cities during the course of a week and potentially in the same day. I know some of these cities have their own minimum wage laws—but how do I figure out which laws apply?
Due to the lack of political action at the federal and state level, many municipalities have adopted legislation to improve the working standards of employees. If your employees are working regionally, it can be confusing to determine whether you’re in compliance with the correct law. Let’s take a look at the different laws that might apply, how to stay in compliance, and what to do when multiple laws are in effect.
Common Municipal Employment Laws
The most common employment law at the local municipal level establishes a minimum wage rate higher than either state or federal laws. While the minimum wage under the federal Fair Labor Standards Act is currently $7.25/hour, recognizing that cost of living in urban areas is greater, 44 municipalities in the U.S. have set higher rates, 24 of which are in California.
The other common municipal employment laws include:
- Mandated benefits, such as paid sick or family leave, health care contributions, or transportation benefits;
- Limits on recruitment tactics, such as requesting an applicant’s criminal history record, salary history, or drug testing;
- Requiring employers to set schedules versus requiring workers to be “on call” and therefore unable to plan for childcare and other needs, AKA “predictive scheduling requirements”; and
- Non-discrimination of LGBT workers.
Some states are working to pre-empt these regulations to “protect” employers—arguably at the expense of workers—and are passing legislation to pre-empt employment standards set by cities and counties. If you’re curious about these efforts, check out Grassroots Change for an interactive map.
When multiple laws cover the same topic, like minimum wage, unless the federal or state law has pre-emption language, then the law that applies is the one most beneficial to the employee. Cities, counties, and even special districts can adopt these laws, so review the laws in all governmental jurisdictions where your nonprofit operates. Read on for tips on how to do this and keep your sanity!
With the plethora of potential employment mandates, employers must stay abreast of the laws in every municipality in which they have offices and where their employees work to ensure compliance. Typically these laws are found in the municipal code, which is the repository of all the laws adopted in that jurisdiction. There can also be municipal regulations, which are administrative clarifications that can be more detailed than the laws themselves. I know, this is a lot to think about and creates a potentially large workload for your typically resource-strapped nonprofit, but the alternative is exposing your organization to risk and liability. We’ve included a handy checklist at the end of the article to help with your compliance efforts, and thankfully many of these laws include exemptions or special rules for nonprofits.
It is very common for municipalities to have more stringent labor standards for contractors and grantees. If your nonprofit has a contract or grant with a municipality, look both to the contract terms and the applicable laws for compliance mandates.
The good news is that for the most part municipalities that adopt these laws have excellent websites that include the text of the laws, practical summaries, FAQ’s, and occasionally sample forms and policies. San Francisco is a good example. The SF Office of Labor Standards Enforcement website groups all their employment laws by applicability based on employer size, and offers employers the ability to subscribe to an email list-serve for updates. Most municipalities also have compliance officers available to assist employers with questions and resources. While the Internet abounds with articles on these laws, these resources should not be considered definitive, as many are outdated or don’t address all aspects of compliance.
When Multiple Laws Apply
If multiple minimum wages apply to your employees, your nonprofit can decide to either pay the highest minimum wage across all the jurisdictions where they work, or have different wage rates for each location. For employers with set offices in different cities, it is not uncommon for each office to have different standards. But if your employees are constantly on the move, unless you want your payroll staff to have a constant headache, paying the highest wage rate is probably most practical.
Remember that if you do pay different rates, the overtime wage for non-exempt employees is a weighted average for each workweek. For example, if 20 hours are paid at $11/hour and 20 hours are paid at $12/hour, the weighted average wage rate for that workweek is $11.50/hour. If you decide to offer different benefits for different locations, make sure your employee handbook is clear on this point. However, some municipal standards apply to any staff that work in that jurisdiction, so best practice is to adopt a uniform policy on non-discrimination, hiring procedures, and other standards. Lastly, remember to remain abreast of upcoming changes in these laws, especially minimum wage and benefit updates, and communicate this information to your grant writers and finance staff so they can budget appropriately for upcoming increases.
While it may be challenging for a nonprofit to operate in different regions, these compliance requirements need to be weighed against your potential for impact. Either way, making an educated decision about what works best for your nonprofit given capacity constraints is the way to go.
- Research municipal employment laws for each of your office locations and sign up for email updates via any available official resources.
- Research nonprofit grant and contract regulations to determine if employment standards are specified. Communicate special conditions or costs to HR and finance staff to evaluate administrative and fiscal impact, and loop in your fundraising team so they can include these costs in proposals.
- For remote or community-based employees, review applicable laws wherever they will work. Calculate the number of hours worked in each jurisdiction.
- Determine whether to follow the highest standard agency-wide or have different standards based on location.
- If different wage rates or employment standards are used in different jurisdictions, make sure non-exempt time cards list jurisdiction where hours are worked.
- Update your employee handbook and policies to reflect municipal law compliance.
Hope this helps you conquer your conundrum!
Ellen Aldridge is an Employment Risk Manager for the Nonprofit’s Insurance Alliance Group. Ellen has practiced labor and employment law for over 30 years as a litigator, negotiator, and adviser. Now in her 11th year with the Group, Ellen brings her experience to assist nonprofits in managing employment law risks and implementing best practices to motivate and support employees. Ellen received her B.A. in Government from University of San Francisco and her J.D. from Santa Clara University. On the weekend, you can find her on the tennis courts or in her garden.