More companies are gravitating toward following state mandates on paid leave (as opposed to creating their own), as well as limiting paid leave to certain employee groups. (Image: Shutterstock)
Multiple types of mandated and voluntary paid leave programs result in a complex landscape of federal, state and local laws that some employers respond to with outsourcing, co-sourcing and training—but that doesn't mean they've got it licked.
In fact, according to a white paper from the Disability Management Employer Coalition, more training is necessary than is being provided—and employers need more help in responding to the challenges and opportunities such leave programs present.
Federal provisions alone include the Family and Medical Leave Act, the Americans with Disabilities Act and ADA Amendments Act, among others. Then, of course, there are lower-level legal provisions that govern employee leave, and many employers are responding by using software to handle the complexities of the various forms of paid leave.
According to DMEC's report, approximately 40 percent of companies surveyed are bound by state, municipal and/or county paid sick leave laws—that's up from about a third in 2017—and 39 percent actually provide paid leave that's more generous than they're obliged to offer.
What exactly do they offer? A little more than a third—36 percent—offer employer-sponsored paid parental leave only, while 29 percent offer paid family care leave only; 28 percent offer both. That's a substantial increase from 2017, when only 18 percent provided paid family leave or paid parental leave.
In addition, more companies are gravitating toward following state mandates on paid leave, as well as limiting paid leave to certain employee groups. The most common range of paid leave among companies in the survey is three to nine weeks with 100 percent pay.
But it's definitely a complex process to stay ahead of all the various requirements, so large companies in particular are outsourcing mandated leaves; in 2018, 47 percent of companies with 1,000 or more employees outsourced FMLA administration; that's up from 40 percent in 2017. And among companies outsourcing FMLA and ADA administration, 49 percent do so to an insurance company, while 32 percent instead seek out third-party administrators.
And 82 percent co-source, rather than outsourcing the whole process—using both internal and external staff to ride herd on the issue.
Then there's software, with large employers again employing a specialized software package just for leave; smaller employers mostly stick to payroll systems to administer it. And 84 percent say that the most important goal achieved via software is the ability to run standard reports, while 77 percent say eligibility determination is the big one.
Getting back to that training issue: since supervisors and managers need to know when an employee communication actually qualifies as a leave request, that's where really understanding the laws comes in. Seventeen percent of employers say that training supervisors was their top challenge with the FMLA and ADA, while 15 percent said leaving the issue to managers was their top problem. And among types of leave, intermittent leave, say employers—no matter their size—is the toughest to manage; they say automated tracking systems or software, or outsourcing, would make that easier to handle.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
