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3 Prominent Challenges Multi-State Employers Face and How to Solve Them

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Is your company looking to expand and establish another office in a different state? If so, congratulations! It's exciting to be a part of a growing, thriving organization.


But with growth comes growing pains and multi-state employers face numerous challenges. Many times these challenges must be overcome by HR departments. In this blog, we'll discuss the three most prominent issues you'll likely face and give you tips to overcome them.


Challenge #1: Providing Adequate Compensation

Every state has different laws regarding compensation. While the national minimum wage has been regulated to $7.25, many states, counties, and even cities have their own compensation requirements.


But that's not all. To further complicate matters, it's likely that the location of each new office your company opens will also have to adhere to varying payroll taxes, overtime and paid leave regulations. Talk about an HR headache!


Fortunately we have a few tips to help you navigate the compliance issues your bound to encounter when attempting to open an out-of-state office.


  • First, and this goes for the other two challenges we'll address in this article as well, be sure to get ahead of any potential issues as soon as possible. Research the city laws in each of the locations that management is considering for a new office. Understand where your company may run into problems and how the HR department can help. Being prepared will go a long way.
  • Second, be sure to balance location regulations as well as cost of living in the city where your new office will be located. You won't be able to lure in top talent without appropriate salaries and benefits packages. And when it comes to actually paying your company's new employees and managing payroll, consider outsourcing to a reputable company. Not only will this allow HR to focus on other tasks, it will also alleviate the stress of meeting multiple state payroll laws.
  • Finally, in regard to overtime hours and paid leave, we recommend you first study the applicable laws in each region your company's in and meet all standards. Once you understand the requirements, consider enacting a company wide policy that adheres to the more generous state obligations. That will make the life of your company's HR department much easier, while ensuring compliance in each location.

Challenge #2: Maintaining Company Culture

Besides addressing compliance issues inherent with multi-state employers, HR is also responsible for maintaining company culture across multiple offices. Offices that are sometimes separated by thousands of miles. Is it even possible?


Of course it is! It might not be easy, but the following tips will help you keep your company culture strong and thriving.


  • Try your best to have at least one on-site HR rep at each location. Depending on the size of the new office, more than one rep may be needed. And make sure that the rep you assign to the new location has been with your company for a while and understands the culture. That way they can begin implementing it and hiring new talent who properly fit the mold of your organization.
  • A great way to maintain company culture is to relocate current employees (like the HR rep we mentioned in the above tip) to your new office. You might be surprised how many team members are interested in the idea. But employee relocation can be expensive. We recommend creating a relocation policy that addresses what your company is willing to provide when employees relocate and includes a "payback clause". That way your company can recoup costs if a team member bolts soon after relocation.
  • Lastly, make use of technology. There are amazing tools available today that allow distributed teams to communicate seamlessly and all but erase the miles between them. From in-depth HRMS software to video conferencing applications, research and invest in technology solutions that will allow multiple locations to work together with ease.

Problem #3: Navigating Contradictory Laws

There will be times where state laws contradict each other. For example, we mentioned earlier that the national minimum wage is $7.25. But in Wyoming, the minimum wage is set even lower at $5.15. Which regulation do you abide by?


When companies have multiple locations in different states, HR departments will encounter contradictions such as these regularly. Fortunately, the solution is fairly simple: always abide by the law that is most generous to the employee.


So in our above scenario, you would commit to paying workers no less than $7.25 an hour because that is the figure that benefits your staff most.


Over To You

There you have it; the three most prominent challenges multi-state employers face and how to solve them. As part of the HR team at your company, these tips will be invaluable to you as you help your organization expand to new locations.


Remember, no matter what problem you're facing, getting ahead of the issues and researching potential roadblocks before any major decisions are made is paramount. That combined with the other points made in this post will ensure your new office is up and running in no time!


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