ZIP Codes Don’t Cut It for Employment Law Compliance

In the face of a major increase in new employment laws in recent years, employers have seen a new challenge: making sure they know the correct jurisdiction for their locations.

At first glance, it might seem easy enough to determine which jurisdiction applies to which location. But it’s not always simple.

Mostly at the city and county level, employers find that ZIP codes alone are not sufficient to determine the correct employment laws to apply to their locations. Whether it’s minimum wage, paid leave or labor law posters, the challenges of applying laws can be cumbersome, especially with about 22,000 cities and counties that have the ability to issue poster requirements.

Below, we’ll examine a few reasons why ZIP codes are not the best way to determine which employment laws apply, as well as some real-world examples.

Ditch the ZIP

ZIP codes were initially made to make mail delivery easier. They weren’t created to correspond to jurisdictional boundaries for cities, counties or states. They can, and do, cross these borders.

Cities and counties are defined, created and managed by state and local government bodies, not the U.S. Postal Service. Also note that cities and names are often changed to a preferred ZIP code distribution center city to optimize mail sorting and delivery, and don’t always reflect the correct jurisdiction.

Plus, there are a smattering of places in the U.S. without a ZIP code at all.

ZIP Codes in Multiple Jurisdictions

So, what are some real-world examples of the challenges of using ZIP codes to apply employment laws?

Take, for example, Black Hawk County in Iowa, whose county seat is the city of Waterloo. The Waterloo “postal area,” based on a so-called ZIP Code Tabulation Area, includes a large swath of acreage outside the city, as well as a small portion of neighboring Hudson, Iowa.

At a larger level, ZIP codes can also span state borders:

• 42223 straddles Christian County, Ky., and Montgomery County, Tenn.
• 97635 includes portions of Lake County, Ore., and Modoc County, Calif.
• 51023 and 51001 are in both Iowa and Nebraska

Meanwhile, as another example, Oregon breaks out its minimum wage law based on population density:

• Portland metro area’s urban growth boundary
• Standard counties
• Non-urban counties

But these borders can shift with new development, population changes and other factors. And none of them have to do with ZIP codes.

As one might expect, labor law posters, minimum wage rates and other employment laws vary across jurisdictions, and maintaining compliance based on ZIP codes isn’t the best strategy.

Even using city addresses can cause issues.

There is a mall in California with a Santa Clara address. But a portion of the structure falls within the bordering city of San Jose, which has a paid sick leave law while Santa Clara does not. This, of course, could lead to noncompliance if an organization doesn’t have accurate tabs on a location.

No ZIP Codes, What’s the Answer?

Large, multi-jurisdiction employers have plenty of employment law issues to manage without worrying about applying the wrong laws.

One way to combat this is through a closer examination of locations. Employers should take a magnifying glass to the jurisdictions where they have locations to ensure accuracy.

But even more precise is the use of geospatial technology. In fact, GovDocs uses geospatial technology to pinpoint the precise jurisdiction of each location and match the applicable laws:

• Latitude/longitude technology gets the rooftop-accurate location data for client locations
• Crafted and maintained by the GovDocs Employment Law and Compliance team, jurisdictional mapping technology interacts directly with each client location’s latitude/longitude data to determine what legal jurisdictions to apply to that location

However employers approach ensuring they have the correct employment laws applied to their locations, it’s always a good idea to audit those jurisdictions’ laws.

Conclusion

Employers with hundreds, or even thousands, of locations across the U.S. have plenty of employment law matters to address.

But without the proper jurisdictions tied to locations, it opens the door for noncompliance and all the issues that can come with it:

• Fines
• Investigations
• Overpaying employees
• Bad press

For employers that operate in many jurisdictions across the nation, ensuring location accuracy is the first step toward a successful compliance program.

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.