Biggins Lacy Shapiro & Company, LLC

The Influence of Employment Regulations on Site Selection


PART I: BE WARY
By: Andrew Shapiro and David Marich, Biggins Lacy Shapiro & Co.

Companies making critical location decisions within the United States ignore the potential impacts of state and local workplace regulation at their own peril. While U.S. federal law controls much of the hiring process and the terms and conditions of employment, more and more often state and local regulations can exceed federal standards in important ways. For example, 29 states now have mandated minimum wages that surpass the federal benchmark of $7.25 per hour, and states with the highest minimum wage targets ($15 per hour by 2025) doubled in 2019.

Not that long ago it was commonplace for site selectors and location decisionmakers to investigate only a few workplace variables – typically state right-to-work status and employment-at-will laws. As the second decade of the millennium comes to a close, however, the employee-employer landscape has become much more fluid. In one recent month, more than 60 bills were introduced in state legislatures and city council chambers, addressing recruiting and hiring practices, wages and benefits, time off and privacy protections. 

One consequence of this more active hiring environment has been a patchwork of often contradictory state and local laws that increasingly pit liberal-leaning city councils against state legislatures, where more conservative rural interests tend to wield power. Think back a few years to the political battle that was waged over North Carolina’s so-called “Bathroom Bill [1],” now law, that overrode all local ordinances concerning wages, employment and discrimination in public places. In fact, state legislatures have recently approved, or considered, a series of these so-called “preemption bills” that would preclude localities from enacting ordinances that impose additional obligations on employers:

South Carolina passed a law that prohibits local jurisdictions from requiring employers to provide any benefits beyond wages. 

Missouri, Tennessee, Georgia and Arkansas have enacted or have considered more narrowly defined preemption laws addressing limitations on work scheduling and compensation for schedule changes, etc.

Texas considered a preemption bill precluding localities from adopting their own “Ban the Box” ordinances (more on that in a subsequent article).

Conversely, legislators in the state of Washington recently made no attempt to forbid Seattle from adopting new regulations mandating that large retail and fast food employers provide two weeks’ notice before enacting any worker schedule changes.

The probability that states will choose to go beyond federal employment strictures, and the possibility that local jurisdictions will be given latitude to exceed state regulations imposes new burdens on companies (and their consultants) assessing locations in which to relocate or expand.

BLS & Company believes that there is no substitute for an informed location decision. In a series of commentaries that will follow, BLS will shed light on state business environments and the discretion (or lack of it) given to employers to screen and hire job applicants, to set wage and benefit levels and to establish working hours, among other important considerations. [2]

FOOTNOTES:

[1] The Public Facilities Privacy & Security Act, commonly referred to as the “Bathroom Bill” is a North Carolina statute signed into law in 2016. The bill amended state law to preempt any anti-discrimination ordinances passed by local communities. Most notably (or notoriously) it compelled schools and public facilities to limit access to single-gender bathrooms only to people of the corresponding sex (as described on their birth-certificate). The bill, which at the time was characterized as most anti-LGBT legislation in the U.S, was met with widespread protests and event and performance cancellations across North Carolina.

[2] Now the necessary disclaimer: These articles are not intended as a comprehensive review of state and local employment-related laws and regulations. Nor should they be considered a substitute for careful analysis and fact-driven, cautious decision-making.


Andrew Shapiro is the managing director at Biggins Lacy Shapiro & Co., a specialty site selection and economic development incentives advisory firm based in Princeton, N.J. Andy Shapiro leads BLS & Co.'s San Francisco Bay Area office, which offers BLS & Co.’s full suite of services. Connect with Andy on LinkedIn or email him directly at ashapiro@blsstrategies.com.


Published: 8/22/2019
Biggins Lacy Shapiro & Company, LLC
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