Paid leave benefits: Trends and challenges
Interpreting federal and state laws is the number one challenge reported by employers, followed by compliance.
Interpreting and complying with state and federal paid leave laws are the top challenges facing employers administering employee leave benefits, according to a survey of companies.
Interpreting state and federal leave laws was the most commonly raised concern in a survey of companies’ paid leave practices by NFP, a leading insurance broker and consultant, and Helios HR, a human capital and talent acquisition consulting firm.
Related: Expanded paid sick leave requirements under the Families First Coronavirus Response Act
Along with the interpretation of laws, employers are also challenged by compliance with federal and state laws. Coordinating different types of absence and applying the Americans With Disabilities Act and the act’s 2008 amendments were tied for the third biggest challenge for employers in the NFP report. “With state and local leave laws frequently being enacted around the United States, managing leave is more difficult in today’s workplace,” the report states.
NFP and Helios HR decided to launch the survey after hearing frequent questions from clients about paid leave and finding relevant data wasn’t available. Their decision to launch their first comprehensive paid leave benefits survey was intended to help their clients make business decisions related to paid leave benefits. The survey, covering 190 companies in 16 states and 16 industries, seeks to assess the prevalence of certain leave benefits and the perceived value of those benefits for employers.
The survey also found that 63% of respondents have employees who are subject to statutory, paid sick leave. Of that group, 88% offer a policy that meets or is more generous than the mandated leave.
Half of survey respondents (50%) have a return-to-work program in conjunction with their disability leave.
“When you think about the competitive landscape pre-COVID, and the way many companies struggled to attract and retain top talent, we were surprised to see that most employers haven’t fully embraced a creative leave structure,” said Beth Robertson, managing director, NFP Mid-Atlantic Region, corporate benefits. “Nine of ten clients still offer traditional PTO and/or vacation/sick time, and only half offer parental leave, despite market pressures. Even with the challenges COVID brings to the economy, there is a real opportunity for employers to evolve and implement leave policies that help employees achieve a meaningful work-life balance, and drive loyalty and productivity,” Robertson said.
A return-to-work program allows employees who are unable to perform their normal job duties due to an injury or illness to return to work on a temporary, limited or modified duty capacity while they recover. Thirty-six percent of respondents use a third-party vendor to administer or manage disability leave.
On the issue of paid parental leave, the report notes that the United States is one of just three companies that don’t guarantee leave, and among survey respondents, just 45% of companies off some form of leave. That rate has been steadily increasing since 2014, when less than 20% of employers offered paid parental leave. Of those respondents paying parental leave, 76% are paying at 100% of an employee’s pay.
Other study highlights include:
- 18% of survey respondents offer employees the opportunity to donate their paid leave to their colleagues
- Just 3% of respondents offer unlimited PTO
- Companies offer an average of 11-15 days of PTO for first-year employees
- Only 28% of companies offer personal days in addition to PTO and vacation
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