US multi-state hiring rules are increasing compliance risk for companies, with half of employers declining to hire a qualified candidate because of concerns related to that candidate’s state employment rules, according to a survey from US employer of record FoxHire.
The company’s inaugural Multi-State Hiring Compliance Burden Index found that in addition to 50% of employers telling candidates they wouldn’t be hired because of compliance concerns, 48% have also delayed hiring decisions or expansion into new states due to lack of clarity on state regulation. Another 44% said they had decided not to move ahead with a hire because compliance felt too risky or complex, without informing the candidate of the reason.
FoxHire said the survey data shows that state-by-state employment complexity is not just slowing hiring, it is actively narrowing where companies are willing to operate.
More than a third of respondents (36%) said they need at least a month to feel confident they are compliant in a new state, stalling new hires and risking job candidates finding alternative employment.
Almost 37% of respondents said that local employment rules have become a significant compliance challenge in the past year, with 35% of legal, risk and compliance professionals ranking California as the state with the most compliance friction due to the state’s detailed employment laws and aggressive enforcement regime.
A quarter of companies said they have paid a penalty, interest or fine related to...
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