Many U.S. cities have enacted local employment laws offering protections above state and federal minimums. These often apply to all private employers — even if they don’t have any contracts with the city. For example, a growing number of cities are adopting laws such as higher minimum wages, equal benefits ordinances for employees with same-sex partners, paid sick leave ordinances, and health care benefits ordinances. These laws often mandate additional workplace posters, the completion, review and retention of forms from employees, annual and sometimes quarterly reports from employers, etc. Failing to meet the exact requirements of these ordinances can lead to resource-draining audits and litigation, as well as assessments and penalties.
Worse yet, these ordinances are not static; they are amended and many are the subject of extensive and complicated regulations, or worse, there are no regulations but there are ambiguous FAQs that come and go from City websites. Employers in San Francisco, for example, which use an out-of-date health benefits waiver form that lacks certain “magic language” can end up paying hundreds of thousands of dollars to employees in back payments measured at a couple of dollars for each hour worked going back three years. Sometimes employers are left to interpret the ordinances on their own because the city has decided to “revise” its regulations. This is the case in Los Angeles where the Living Wage Ordinance rules and regulations (last published in 2006) have been marked “being revised” by the City for over a year. Employers uncertain of their compliance may be uncomfortable contacting a City with questions out of fear that the inquiry may prompt an audit. Employers should, however, be pro-active about their obligations because many cities have prioritized enforcement of their ordinances and hired additional staff to process employee complaints and audit employers; the enforcement of these ordinances is a win-win for the cities as they can boast victories on behalf of their citizens while raising revenue from fines.
Doing business globally requires more and more attention to local issues.