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How State and Federal Legislation Changes Can Affect Your Supply Chain

Posted by Jay Elliott on Mar 1, 2018 8:00:00 AM


When your company uses an outside service provider like a 3PL, it takes certain concerns off of your plate - scalability, expertise, and workforce, just to name a few. You trust your 3PL to take care of the problems that can slow down your supply chain, but are you sure you're both on the same page when it comes to compliance? Ignorance of the law, as the old saying cautions, isn't an excuse for breaking it, but all too often companies rely blindly on their 3PLs to follow local laws and regulations, or fail to match compliance within their own policies.

How 3PLs Work With State and Federal Legislation Changes

State laws trigger a challenging question for multi-state 3PLs – they either need to make the change only in the states that have passed the laws, which can lead to inconsistent handling of the same policies; or they can come up with a one-size-fits-all policy that incorporates all of the changes to the laws made at the state level, and apply the new policy company-wide, regardless of location.

As with most smart business decisions, the right answer depends on the situation. For example, when Massachusetts, California, and Connecticut passed separate regulations requiring paid sick leave in 2014, Kenco has a computer tracking system that helped us stay in respective compliance through comprehensive employee tracking.

In contrast, when a law or regulation is likely to continue as part of a nationwide trend, it makes logical sense to incorporate it throughout a company.

This helps not only further progressive workplace goals for the provider, but it also stands as an incentive for potential clients. Many of these clients are eager to work with a company whose values mirror their own; forward-thinking employee welfare and ethics regulations are at the top of nearly every "want" list.

For example: although it's only been passed in a handful of states (including California and Massachusetts), Kenco has chosen to adopt a rule company-wide which prohibits requests for a candidate's salary history until a conditional offer of employment is made. This legislation has its roots in workplace equality: if a female candidate has been consistently - and illegally - paid less than male counterparts at a previous job, this legislation prevents that negative trend from perpetuating into the new position (whereby the company hiring the female might pay her only a little more than she was making at her previous employer, for example).

New 2018 Legislation That May Affect Your Company


In addition to adjusting the timing of salary history questions, new 2018 labor legislation in some states - notably California - is also shifting the timing of criminal background checks to after conditional employment offers are made. With these new guidelines in play in certain states, contingent offers will need to be made prior to all drug, alcohol, and background checks, which may, in turn, be completed before employment begins. Be sure to check if this law is coming into play in any of the states where you operate.

It's no exaggeration to say that attention to the issue of harassment in the workplace has increased exponentially in recent years. With that in mind, Kenco has renewed our focus on keeping all of our employees' interactions legal and respectful. This ensures all of our employees are well-trained in interpersonal communication, including anti-harassment education. Why do we go to these lengths? *blockquote* Every company needs to know that their business partners are just as committed to equality and fairness when it comes to local, state, federal, and cultural benchmarks.

Why It's Worth Auditing Your 3PL

If you're wondering why you shouldn't simply trust that your 3PL is upholding local and federal laws in your supply chain, the answer is simple. The relative time and effort of reviewing your 3PL's compliance will always be far less than what's required to "fix" an error of miscommunication. Fines, fees, potential court appearances, and the erosion of customer trust are all potential outcomes of failing to audit your 3PL for compliance. In addition to these looming issues, your 3PL may also have a beneficial effect on your own company; once you're made aware of how new legislation affects your supply chain, you can make sure it starts within your manufacturing walls.

When in doubt, ask: it's a 3PL's job to stay abreast of new laws and determine the best ways for their clients to maintain compliance with minimum disruption.

To Sum It Up

While most laws and regulations will change with established legislative cycles, certain events - scandals, special elections, and so on - can fall outside of normal lawmaking calendars. Keep in touch with your 3PL representative and perform a supply chain-wide audit on a regular basis to make sure that you aren't leaving out important steps of compliance, or wasting resources on compliance measures that are no longer needed. As with all parts of a strong, successful business, it's important to stay both informed and versatile no matter what the market may have in store.

Best Practices Selecting a 3PL

Jay Elliott

Written by Jay Elliott