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State snapshot

Key considerations
Which issues would you most highlight to someone new to your state?

In many aspects of labor and employment law, Utah follows federal law. Highlights of some key state law differences include the following:

  • As of March 2015 sexual orientation and gender identity are protected characteristics under Utah discrimination law.
  • Employers with 15 or more employees in Utah cannot request an applicant to submit his or her social security number, date of birth, or driver’s license number until the applicant has been offered a job, unless the employer needs such information to conduct pre-offer background checks, determine eligibility for government programs, or determine whether the applicant has previously worked for or applied to work for the employer and such checks and determinations are conducted on all applicants for the position being filled.
  • At the time of hire, Utah employers must provide (or post) a wage notification specifying the day, place of payment and rate of pay.
  • Drug testing must be conducted according to the employer’s written policy, which must be distributed to employees.

What do you consider unique to those doing business in your state?

Utah has a 5% flat corporate tax rate, which is among the lowest rates in the United States. Utah’s workforce is considered young and vibrant, with one-third estimated to be bilingual. The regulatory environment is positive for business, with fewer state regulations burdening employers than many other states.

Is there any general advice you would give in the labor/employment area?

It is advisable to plan to comply with federal labor and employment laws, but also to be familiar with those areas where Utah imposes additional obligations on employers, such as:

  • sexual orientation and gender identity discrimination protection;
  • drug testing pursuant to the employer’s written policy;
  • limits on the pre-job offer collection of an applicant’s social security number, date of birth and driver’s license number; and
  • wage notification requirements.

Emerging issues
What are the emerging trends in employment law in your state, including the interplay with other areas of law, such as firearms legislation, legalization of marijuana and privacy?

Attempts to raise the Utah minimum wage above the federal level of $7.25 per hour have failed to achieve support in the past. By law, cities, towns and counties cannot raise the minimum wage above the federal minimum wage, so the minimum wage remains uniform throughout Utah.

Utah enacted a social media privacy law that prohibits employers from requesting an employee or applicant to disclose a username or password for access to the individual’s personal online accounts. Employers cannot take adverse action, fail to hire, or otherwise discriminate against an employee or applicant for failure to disclose personal usernames and passwords (Utah Code §34-48-102; 34-48-201).

Utah has not legalized marijuana for any purpose. Numerous bills are expected to be considered by the Utah legislature in 2016 regarding legalization of marijuana for medical use.

Proposals for reform
Are there any noteworthy proposals for reform in your state?

Numerous medical marijuana bills are expected to be considered in 2016. The legislature is also evaluating a law to codify requirements of valid non-competes and damages for improper non-competes. There is also a bill to expand the law that makes it illegal to discriminate against pregnant and breastfeeding women by requiring employers with 15 or more people to provide workers “reasonable accommodations” regarding pregnancy, childbirth, breastfeeding and related conditions, unless it creates undue hardship to the business. It remains to be seen whether any of the bills will get enacted and how they may affect Utah employers.

Employment relationship

State-specific laws
What state-specific laws govern the employment relationship?

Title 34 of the Labor Code contains the majority of the laws governing employer-employee relationships, including payment of wages. Title 34A of the Labor Code contains laws governing anti-discrimination, workers’ compensation, occupational safety and health, genetic testing and other employment-related laws. Title 35A of the Workforce Service Code includes Utah’s employment security (unemployment) law, new hire registry law and other workforce services laws.

Utah’s Administrative Code includes the administrative rules governing employment issues which can primarily be found in Titles R600-R616 Labor Commission, and Titles R982-R994 Workforce Services.

Who do these cover, including categories of workers?

Depending on the specific provision, these laws generally cover employees. Some provisions, including anti-discrimination laws, apply to applicants for employment.

Misclassification
Are there state-specific rules regarding employee/contractor misclassification?

Utah has no specific independent contractor misclassification law, but defers to the Internal Revenue Service criteria for worker classification purposes.

For workers’ compensation purposes, an ‘independent contractor’ is defined as any person engaged in the performance of any work for another party who, while so engaged, is:

  • independent of the employer in all that pertains to the execution of the work;
  • not subject to the routine rule or control of the employer;
  • engaged only in the performance of a definite job or piece of work; and
  • subordinate to the employer only in effecting a result in accordance with the employer’s design (Utah Code §34A-2-103).

For unemployment insurance, the Utah Code §35A-4-204(3) and corresponding administrative rules also list factors considered to determine independent contractor status (see R994-204 -301 to 401). 

Contracts
Must an employment contract be in writing?

No, an employment agreement need not be in writing unless, according to its terms, the contract is not to be performed within one year of the agreement being made (Utah Code §25-5-4(1)).

Employee handbooks or personnel policies may constitute an implied employment contract, absent a clear and conspicuous disclaimer stating that the handbook and policies do not establish and are not to be implied to create a contract (Johnson v. Morton Thiokol, Inc., 818 P.2d 997 (Utah 1991)).

Are any terms implied into employment contracts?

Every contract contains an implied covenant of good faith and fair dealing which applies to both employer and employee (Brehany v. Nordstrom, Inc., 812 P.2d 49 (Utah 1991)).

Are mandatory arbitration agreements enforceable?

Under the Utah Arbitration Act, a written agreement to arbitrate an existing or future controversy arising between the parties to an agreement is “valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract” (Utah Code Ann. § 78B–11–107(1)). The policy of the law is to “interpret contracts in favor of arbitration, in keeping with our policy of encouraging extrajudicial resolution of disputes when the parties have not agreed to litigate” (Reed v. Davis County Sch. Dist., 892 P.2d 1063, 1064 (Utah App.1995)). Mandatory arbitration agreements have been ruled enforceable (see Zions Mgmt. Servs. v. Record, 305 P.3d 1062 (Utah 2013)).

How can employers make changes to existing employment agreements?

Oral modifications of an existing contractual agreement are permissible (e.g., Kraatz v. Heritage Imports, 71 P.3d 188 (Utah Ct. App. 2003)), but best practice would be to make contractual changes in writing.

Hiring

Advertising
What are the requirements relating to advertising open positions?

Unless based on a bona fide occupational qualification, or required by and given to an agency of government for a security reason, an employer, employment agency, or labor organization may not do the following if the statement, advertisement, publication, form, or inquiry limits, specifies or discriminates on the basis of race, color, religion, sex, pregnancy, childbirth, pregnancy-related conditions, national origin, age, disability, sexual orientation, or gender identity:

  • print, circulate, or cause to be printed or circulated a statement, advertisement, or publication;
  • use a form of application for employment or membership; or
  • make any inquiry in connection with prospective employment or membership.

If a private sector employer creates a voluntary veterans employment preference policy, it must be publicly posted at the place of employment or online if the employer has a website or uses the Internet to advertise employment opportunities (Utah Code §34-50-103).

Background checks
What can employers do with regard to background checks and inquiries?

(a) Criminal records and arrests

Utah law does not restrict an employer’s use of criminal history records for both arrests and convictions (Utah Code §53-10-108).

(b) Medical history

Utah employers cannot, in connection with hiring, promotion, retention, or other related decisions, access or otherwise take into consideration private genetic information about an individual. An employer may seek an order compelling the disclosure of private genetic information in connection with an employment-related judicial or administrative proceeding in which the individual has placed his or her health at issue, or an employment-related decision in which the employer has a reasonable basis to believe that the individual’s health condition poses a real and unjustifiable safety risk requiring the change or denial of an assignment (Utah Code §34A-11-102; 26-45-103).

It is unlawful for an employer to charge an applicant or employee a medical fee for a physical examination. If an employer conditions employment on a physical examination, the employer must pay all examination costs (Utah Code §34-33-1).

(c) Drug screening

Utah law protects employers from liability related to testing for drugs and alcohol if the employer complies with the Utah Code Chapter on Drug and Alcohol Testing (Utah Code § 34-38-3). Employers may test employees or prospective employees as a condition of hiring or continued employment. However, employers and management must submit to the testing on a periodic basis.

Testing must be carried out pursuant to the employer’s written testing policy, which must be distributed to employees and made available for review by prospective employees. Permissible reasons for testing include:

  • investigation of possible individual employee impairment;
  • investigation of workplace accidents or incidents of workplace theft;
  • maintenance of safety for employees or the general public; or
  • maintenance of productivity, quality of products or services, or security of property or information (Utah Code §34-38-7).

Testing must occur during or immediately after the regular work period for current employees and will be deemed work time for pay and benefits purposes. The employer must pay all costs of testing, including the cost of transportation if testing is conducted at a place other than the workplace (Utah Code §34-38-5).

An employer can take adverse action against an applicant or employee if the employee or applicant refuses to provide a sample, or produces a failed test that is confirmed and indicates a violation of the employer’s written policy (Utah Code §34-38-8).

(d) Credit checks

Utah has no law restricting how employers can use credit reports.

(e) Immigration status

Utah requires employers with 15 or more employees to verify the employment eligibility of employees through E-Verify or another status verification system.

(f) Social media

Utah’s Internet Employment Privacy Act (Utah Code §34-48-101 et seq.) prohibits employers, with limited exceptions, from requesting an employee or an applicant for employment to disclose a username and password, or password that allows access to the individual’s personal online accounts. It also prohibits employers from taking adverse action, failing to hire, or otherwise penalizing an employee or applicant for failure to disclose usernames or passwords for personal online accounts. 

Exceptions under which an employer may request or require usernames or passwords include:

  • when access to an electronic device or account provided by the employer is required;
  • when disciplining or discharging an employee for transferring the employer’s proprietary or confidential data to an employee’s personal online account without authorization; and
  • when conducting an investigation based on specific information about activity on the employee’s personal online account that may violate applicable laws or policies against work-related misconduct, or about an unauthorized transfer of the employer’s proprietary information to an employee’s personal online account.

Employers are not restricted from viewing, accessing, or using publicly available information. Employers are not prohibited from complying with a duty to screen employees and applicants before hiring or monitoring and retaining employee communications under applicable law.

The law provides for a private right of action, but caps damages at $500.

(g) Other

None.

Wage and hour

Pay
What are the main sources of wage and hour laws in your state?
 

Utah Code, Title 34 Labor, Chapter 28 Payment of Wages, as well as Rule R610 Labor Commission, Antidiscrimination and Labor, Labor, Utah Administrative Code.

What is the minimum hourly wage?

As of January 1 2016 Utah’s minimum wage is $7.25 per hour. Employees receiving tips of at least $30.00 per month may be paid a cash wage of $2.13 per hour, if the total of the cash wage and tips is at least $7.25 per hour. Minors (under 18 years) may be paid $4.25 per hour as a training wage for the first 90 days of employment.

What are the rules applicable to final pay and deductions from wages?

When an employee is terminated by the employer, all wages are due immediately and are payable within 24 hours of termination. The 24-hour requirement is met if the employer:

  • mails the wages to the employee with a postmark dated no more than one day after the date of termination;
  • hand delivers the wages to the employee; or
  • initiates a direct deposit of the wages into the employee’s account within 24 hours of termination.

Failure to pay wages due within 24 hours of a written demand will result in the employee continuing to earn wages (at the same rate as when terminated) until paid, or for 60 days, whichever comes first.

When an employee quits or resigns employment and has no written contract for a definite period, all wages must be paid on the next regular payday.

Generally, deductions from wages are lawful when:

  • the employer is required or authorized to do so by state or federal law (e.g., taxes, social security, etc.), or pursuant to a court order;
  • the employee expressly authorizes the deduction in writing;
  • the employer presents evidence that, in the opinion of a hearing officer or administrative law judge, would warrant an offset; and
  • contributions under a benefits contract or plan established by the employer are required.

Pursuant to R.610-3-18, Utah Admin. Code, sums may also be deducted from wages as follows:

  • For repayment to the employer of advances or loans, provided that:
    • the advance or loan occurred while the employee was in the employ of the employer; and
    • the employee's receipt of the advance or loan is evidenced by the employee's written acknowledgment.
  • For amounts as a result of loss or damage occurring from the criminal conduct of the employee against the property of the employer, provided that:
    • the employee has been adjudged guilty by a judicial proceeding of the specified crime committed against the employer’s property;
    • the crime occurred during the employment relationship or out of the employment relationship;
    • the employer’s property cannot or has not been reunited with the employer; or
    • the employee willfully and through his or her own admission did in fact destroy company property. An offset against earned wages may be allowed at the hearing officer's discretion.
  • For sums resulting from cash shortages, provided that:
    • the employee gives written acknowledgment on beginning employment that he or she is responsible for shortages;
    • at the beginning of his or her work period, the employee is checked in or verified on the register or with the cash amount by the employer in the employee's presence and gives written acknowledgment of the verification;
    • at the end of the work period, the employee is checked out or verified on the register or with the cash amount by the employer in the employee's presence and gives written acknowledgment of the verification; and
    • the employee is the sole and absolute user and has sole access to the register or cash amount from the time checked in under Sub-section 2 until the time checked out under Sub-section 3.
  • For the purchase of goods, tools, equipment, or other items required for the employment of a person, provided that:
    • the employee's purchase and receipt of the items is evidenced by a written acknowledgment;
    • the employee has actual or constructive possession of the goods or items; and
    • the employer repurchases the items from the employee at the employee's option on termination of employment at a fair and reasonable price.
  • For payment for goods, tools, equipment, or other items furnished and assigned to the employee by the employer, provided that:
    • the item was assigned during the employee’s employment;
    • the employee gave written acknowledgment of receipt of the item; and
    • the item was not returned to the employer on termination.

If a deduction from wages is made, the employer must, on each regular payday, furnish the employee with a statement showing the total amount of each deduction.

Hours and overtime
What are the requirements for meal and rest breaks?

Utah does not require that employers provide meal or rest breaks to adult employees. If an employer chooses to provide a meal period to employees aged 18 or older, it will not be considered paid time if the meal period is 30 minutes or longer and the employee is completely relieved from duty. If short rest breaks are provided, they are generally considered paid time.

Minors are entitled to a meal period of at least 30 minutes within the first five hours of their workday. The meal period must be paid if the minor is not relieved of all duties. Minors are also entitled to a 10-minute break during every four-hour period, with the break scheduled so that the minor is not required to work over three hours without such a break (Utah Admin. Code R.610-1-12; R610-2-3).

What are the maximum hour rules?

Employers can generally require employees to work any length of day and can discipline or terminate employees who do not perform duties or hours as assigned.

A minor under 16 is not to be employed or permitted to work during school hours, except as authorized by proper school authorities. In addition, a minor under 16 is not permitted to work:

  • before or after school in excess of four hours a day;
  • before 5:00a.m. or after 9:30p.m., unless the next day is not a school day;
  • in excess of eight hours in any 24-hour period; or
  • more than 40 hours in any week.

For overtime purposes, Utah does not require overtime for employees of private employers, except to the extent that it involves employment on public works, which requires pay at one-and-a-half times an employee’s regular rate of pay for any time worked over 40 hours in a week (Utah Code §34-30-8).

How should overtime be calculated?

Utah has no law governing overtime for employees of private employers, except to the extent that it involves employment on public works, which requires one-and-a-half times an employee’s regular rate of pay for any time worked over 40 hours in a week. Non-exempt employees must be paid one-and-a-half times of their regular rate of pay for any time worked over 40 hours in the employer’s seven-day workweek (Utah Code §34-30-8). Otherwise, employers must follow the federal Fair Labor Standards Act, as applicable.

What exemptions are there from overtime?

Utah has no state law governing overtime, so any overtime obligations and exemptions flow from federal law under the Fair Labor Standards Act.

Record keeping
What payroll and payment records must be maintained?

Employers must keep a true and accurate record of time worked and wages paid each pay period to each employee employed on an hourly or daily basis for at least one year after the entry of the record (Utah Code §34-28-10). Federal payroll record keeping requirements exist under the Fair Labor Standards Act.

Discrimination, harassment and family leave

What is the state law in relation to:

Protected categories
(a) Age?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of age (40 years or older) (Utah Code §34A-5-106). A person may not be considered “otherwise qualified”, unless that person possesses the following requirements by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(b) Race?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of race (Utah Code §34A-5-106). A person cannot be considered “otherwise qualified” unless that person possesses the following qualifications required by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(c) Disability?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of disability (Utah Code §34A-5-106). A person cannot be considered “otherwise qualified” unless that person possesses the following qualifications required by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(d) Gender?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of gender (Utah Code §34A-5-106). A person cannot be considered “otherwise qualified” unless that person possesses the following qualifications required by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(e) Sexual orientation?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of sexual orientation or gender identity (Utah Code §34A-5-106). A person cannot be considered “otherwise qualified” unless that person possesses the following qualifications required by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(f) Religion?

An employer with 15 or more employees cannot refuse to hire, promote, discharge, demote, terminate, retaliate against, harass, or discriminate in matters of compensation or in the terms, privileges, and conditions of employment against a person otherwise qualified, because of religion (Utah Code §34A-5-106). A person cannot be considered “otherwise qualified” unless that person possesses the following qualifications required by an employer for any particular job, job classification, or position:

  • education;
  • training;
  • ability, with or without reasonable accommodation;
  • moral character;
  • integrity;
  • disposition to work;
  • adherence to reasonable rules and regulations; and
  • other job-related qualifications required by an employer.

(g) Medical?

Utah employers cannot, in connection with a hiring, promotion, retention, or other related decision, access or otherwise take into consideration private genetic information about an individual. An employer can seek an order compelling the disclosure of private genetic information in connection with an employment-related judicial or administrative proceeding in which the individual has placed his or her health at issue, or an employment-related decision in which the employer has a reasonable basis to believe that the individual’s health condition poses a real and unjustifiable safety risk requiring the change or denial of an assignment (Utah Code §34A-11-102; 26-45-103).

It is unlawful for an employer to charge an applicant or employee a medical fee for a physical examination. If an employer conditions employment on a physical examination, the employer must pay all examination costs (Utah Code §34-33-1).

(h) Other?

Additional protected classes under Utah law include color, national origin, pregnancy, childbirth, pregnancy-related conditions, and gender identity (Utah Code §34A-5-106).

Harassment
What is the state law in relation to harassment?

Sexual harassment, as well as harassment based on another protected class, is prohibited under Utah law. As with any discrimination claim for an alleged violation of the Utah Anti-discrimination Law, employees are limited to an administrative remedy of filing a charge with the Utah Labor Commission and proceeding through the administrative process until they request and are granted a right to sue.

Family and medical leave
What is the state law in relation to family and medical leave?

Utah has no state family and medical leave law.

Privacy in the workplace

Privacy and monitoring
What are employees’ rights with regard to privacy and monitoring?

Utah law mirrors the federal Electronic Communications Privacy Act. Monitoring phone calls, video or audio recordings requires on-party consent (Utah Code §77-23a-1 et seq.).

Are there state rules protecting social media passwords in the employment context and/or on employer monitoring of employee social media accounts?
 

Utah’s Internet Employment Privacy Act (Utah Code §34-48-101 et seq.) prohibits employers, with limited exceptions, from requesting an employee or an applicant for employment to disclose a username and password, or password that allows access to the individual’s personal online account. It also prohibits employers from taking adverse action, failing to hire, or otherwise penalizing an employee or applicant for failure to disclose usernames or passwords for personal online accounts. 

Exceptions under which an employer can request or require usernames or passwords include:

  • when access to an electronic device or account provided by the employer is required;
  • when disciplining or discharging an employee for transferring the employer’s proprietary or confidential data to an employee’s personal online account without authorization; and
  • when conducting an investigation based on specific information about activity on the employee’s personal online account that may violate applicable laws or policies against work-related misconduct, or about an unauthorized transfer of the employer’s proprietary information to an employee’s personal online account.

Employers are not restricted from viewing, accessing, or using publicly available information. Employers are not prohibited from complying with a duty to screen employees and applicants before hiring or monitoring and retaining employee communications under applicable law.

The law provides for a private right of action, but caps damages at $500. 

Bring your own device
What is the latest position in relation to bring your own device?

Utah law does not address the issue of bring your own device.

Off-duty
To what extent can employers regulate off-duty conduct?

Utah prohibits infringements “upon the freedom of expressive association or the free exercise of religion protected by the First Amendment of the Unites States Constitution and Article I, Sections 1, 4, and 15 of the Utah Constitution” (Utah Code §34A-5-111).

The act goes on to say that:

“an employer may not discharge, demote, terminate, or refuse to hire any person, or retaliate against, harass, or discriminate in matters of compensation or in terms, privileges, and conditions of employment against any person otherwise qualified, for lawful expression or expressive activity outside of the workplace regarding the person's religious, political, or personal convictions, including convictions about marriage, family, or sexuality, unless the expression or expressive activity is in direct conflict with the essential business-related interests of the employer.” (Utah Code §34A-5-112.)

Gun rights
Are there state rules protecting gun rights in the employment context?

Utah law prohibits employers from banning guns on their property when the individual is legally permitted to possess the firearm, the firearm is locked securely in a motor vehicle or in a locked container attached to the motor vehicle while the motor vehicle is not occupied, and the firearm is not in plain view from outside the motor vehicle. An employer may designate alternate parking for an individual who wishes to store a firearm in his or her vehicle (Utah Code §34-45-103).

Trade secrets and restrictive covenants

Intellectual Property
Who owns IP rights created by employees during the course of their employment?

Utah’s Employment Inventions Act permits an employer to require its employees to sign an agreement that requires the employee to assign or license to the employer any or all of the rights and intellectual property in or to an employment invention. Employment or continued employment is sufficient consideration to support such an agreement. However, an employer cannot require an employee to agree to assign or license to the employer any right or intellectual property in or to an invention that was created by the employee entirely on his or her own time and is not an employment invention (Utah Code §34-39-3).

An “employment invention" means any invention or part thereof conceived, developed, reduced to practice, or created by an employee which is:

  • conceived, developed, reduced to practice, or created by the employee:
    • within the scope of his or her employment;
    • on his or her employer's time; or
    • with the aid, assistance, or use of any of his or her employer's property, equipment, facilities, supplies, resources, or intellectual property;
  • the result of any work, services, or duties performed by an employee for his or her employer;
  • related to the industry or trade of the employer; or
  • related to the current or demonstrably anticipated business, research, or development of the employer (Utah Code §34-39-2).

Restrictive covenants
What types of restrictive covenants are recognized and enforceable?

Utah has no statute or code provision governing the enforceability or reasonableness of restrictive covenants. Accordingly, restrictive covenants are generally enforceable in Utah if they are necessary to protect a legitimate business interest of the employer (e.g., trade secrets and good will), and if they are reasonably limited in time and geographic scope.

To be valid and enforceable, restrictive employment covenants must be supported by consideration, there must be no bad faith in negotiation of the contract and the covenant must be necessary to protect the goodwill of the business and be reasonable in its restrictions as to time and area (System Concepts, Inc. v. Dixon, 669 P.2d 421 (Utah 1983); Robbins v. Finlay, 645 P.2d 623 (Utah 1982)). 

However, in 2016 the state legislature will consider a statute to codify requirements on non-compete agreements. It is unclear if the statute will pass.

Non-compete
Are there any special rules on non-competes for particular classes of employee?

Utah has no special rules related to non-competes for particular occupations or classes of employee.

Labor relations

Right to work
Is the state a “right to work” state?

Yes, Utah is a “right to work” state (Utah Code §34-34-1 to 17).

Unions and layoffs
Is the state (or a particular area) known to be heavily unionized?

Utah has low unionization in its workforce, estimated between 3% and 4%. Areas of unionization are primarily:

  • public and state employees;
  • manufacturing; and
  • construction.

What rules apply to layoffs? Are there particular rules for plant closures/mass layoffs?

Utah has no law regarding plant closures or mass layoffs for private employers.

Discipline and termination

State procedures
Are there state-specific laws on the procedures employers must follow with regard to discipline and grievance procedures?

Utah has no law governing private employers with regard to discipline and grievance procedures.

At-will or notice
At-will status and/or notice period?

Utah is an at-will state, so all employees who are employed for an indefinite period are presumed to be employees at will.

What restrictions apply to the above?

At-will status may be modified by an express or implied contract. Employee handbooks, personnel policies, oral statements and a course of conduct may modify the at-will relationship or otherwise create contractual liability for an employer (Wood v. Utah Farm Bureau, 19 P.3d 392 (Utah Ct. App. 2001)). An employer’s right to discharge an employee at-will is also limited by Utah public policy, as a wrongful termination claim may exist should a discharge violate public policy based on the Utah Constitution, statutes, or common law (Peterson v. Browning, 832 P.2d 1280 (Utah 1992)).

Final paychecks
Are there state-specific rules on when final paychecks are due after termination?

When an employee is terminated by the employer, all wages are due immediately, and are payable within 24 hours of termination. The 24-hour requirement is met if the employer:

  • mails the wages to the employee with a postmark dated no more than one day after the date of termination;
  • hand delivers the wages to the employee; or
  • initiates a direct deposit of the wages into the employee’s account within 24 hours of the termination.

Failure to pay wages due within 24 hours of written demand results in the employee continuing to earn wages (at the same rate as when terminated) until paid, or for 60 days, whichever comes first.

When an employee quits or resigns employment and has no written contract for a definite period, all wages must be paid on the next regular payday.