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Employment Laws

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How do you determine what laws to go by if you work in one state, but the employer is in another state? Which laws must be abided by regarding firing and a final paycheck?

Sorting out jurisdiction can be a confusing issue, and may require a consultation with an attorney. The first step in that process is to contact the Wage and Hour Division of the Department of Labor in the state where you work. (The name may vary somewhat from state to state.) They should be able to give you a free opinion on whether you are covered by the laws of your home state, or another state in this situation.

In general, labor laws cover the employers who operate businesses within a state. In a sense, the law doesn’t mandate how employees who live and work in the state will be treated – it mandates how employers in the state will treat their employees. That can be an important distinction.

In general, if your employer maintains a branch, an office or a location in the state where you work, you should be covered by the laws of that state. However, if the employer is located in another state, like Texas, and has no location in your home state, then you may be covered under Texas law.

This makes more sense if we look at some examples. Suppose the employer is a hotel company with headquarters in West Palm Beach, Florida. The company has hotels in California, Illinois, New York, Texas and Louisiana. Because the company operates a business – a separate hotel – in each of those states, employees must be treated according to state law. In other words, the employees in California will receive breaks, family leave, final paychecks and other perks in accordance with California law. The employees in Texas will likely receive none of those perks because they aren’t required by Texas law. 

However, if the employer has no office or location in the state, then you work for an out-of-state employer. Suppose a small newspaper based in Ft. Worth, Texas employs a reporter to cover high-tech and business news in Seattle, Washington. The newspaper has no location, branch or office in Washington. In that example, the worker is employed by a Texas company that must follow the employment laws of Texas, not Washington. 

In some cases it will also depend upon the number of employees that the company has in the state. Some states do require an employer to follow state law if they have more than a certain number of employees in the state, like 5 or 10.