One of the toughest things about running your own contract staffing back-office is keeping up with the myriad of state and federal employment laws.  

Now recruiting and staffing firms also have to worry about the growing number of local laws.

And once you have realized that there is a law in a locality where you place contractors, you have to determine if it applies to you. Some local laws apply when your firm is based within city the limits. Others kick in when you have a certain number of employees working in the locality.

It is impossible to list all the local employment laws on record, but here are some common types to look for:

1. Paid Sick Leave (PSL). Six localities now have mandatory PSL laws: Washington, D.C.; San Francisco, CA; Portland, OR; Seattle, WA; Jersey City, NJ; and New York City, NY (effective 4/1/2014). The state of Connecticut also mandates PSL.  When we wrote about this issue 10 months ago, PSL laws did not exist in Jersey City  or NYC, so this illustrates how quickly employment law moves and how hard it is to stay on top of it. Several other states and localities are working towards getting PSL laws, so stay aware. If a PSL law does apply, be prepared to do a lot of homework and legwork. Each locality has their own rules for who qualifies and how PSL is accrued by employees, so you will have to put tracking procedures in place.
2. E-Verify. E-Verify is the federal government's online system designed to help determine if employees are authorized to work in the United States. It verifies that information provided on an employee’s I-9 matches data from the Social Security Administration and Department of Homeland Security. Federal law currently only mandates that certain federal contractors use the system. However, you must consider the bevy of state, city, and even county laws before you decide whether or not you are required to use the system.  Again, half the challenge is determining whether a local law applies because some only require E-Verify for government employees and contractors.
3. Background Checks. "Ban the Box" legislation that makes it illegal to ask questions about criminal background on an employment application is becoming quite popular. Currently, 43 localities and 10 states (most recently California) forbid such questions on applications, according to Human Resources Executive Online.  Even if you don’t have contractors in areas that prohibit questions about criminal background on the application, you could run afoul of the 1964 Civil Rights Act if your background check procedures disproportionately eliminate minority candidates.
4. Drug Screenings. State laws regarding how drug screenings can be utilized are common, but now localities are jumping on the bandwagon. Notably, you can only use drug screenings on employees in San Francisco if you have “reasonable grounds to believe that an employee’s faculties are impaired on the job” and that the impairment presents a danger to the safety of the employee, other employees, or the public.

Again, this is not an exhaustive list of local employment laws, but it does show the wide range and how important it is to keep up with them.  Sound overwhelming?

Then you may want to outsource the employment of your contractors to a contract staffing back-office service, especially if those contractors are working outside your home state.  

When you outsource, your contractors become W-2 employees of the back-office provider, which takes responsibility for complying with federal, state, and local employment laws.