Lack of national FMLA not stopping employers from stepping up
Where federal lawmakers have failed, states and employers have been stepping into the gap.
A new study finds that American businesses continue to strengthen and expand their leave policies due to the needs of employees and inaction by the federal government.
The report by the Disability Management Employer Coalition (DMEC) and Spring Consulting Group is the eleventh annual report on employer leave management practices. The authors of the report noted that it was released during the second year of the COVID-19 pandemic, which has brought even more attention to medical leave issues and higher levels of employee demand for more responsive policies.
Related: The evolution of paid family leave regulations and what to expect next
“A second year of ongoing pandemic challenges and anticipation of a national paid family and medical leave law that did not come to fruition has required the leave management community to continue to strengthen their programs,” the report said. “Employers were able to lean into outsourcing, insourcing, or co-sourcing approaches, while an increased number of states passed paid family and medical leave laws.”
Filling the gap of leadership
As the quote above suggests, the U.S. lags far behind other countries in family and medical leave policies. Despite a great deal of talk by politicians over the past two presidential administrations, the U.S. remains the only industrialized nation without a paid family and medical leave policy on a national level.
Where federal lawmakers have failed, states and employers have been stepping into the gap. Eight states have passed legislation to offer paid family leave through employee-paid payroll taxes.
In addition, employers are increasingly adopting policies that address employee demand for better paid leave benefits. The DMEC report is based on interviews with 703 employers on a range of leave issues, including outsourced systems, management of leave, return-to-work policies, and other issues.
Developments on leave policies
The report found that outsourcing some leave management is a trend that has continued in recent years: outsourcing the management of the federal Family and Medical Leave Act has increased at an annual average rate of 5%. Companies in the banking/financial sector were the most likely to outsource FMLA management.
The researchers also found that most companies that offer paid parental or paid family leave generally offer it to all employees of the company. “With the number of new paid leave laws continuing to increase, many companies already have or anticipate conforming to state administration, though private/voluntary plans are growing in popularity,’” the report said. “The larger the employer, the more their approach depends on factors such as compliance, ease of administration, and employee experience.”
The increased focus on mental health in the benefits world is felt here, too: about 40% of employers now link a mental health program or benefits to their leave process.
Another trend the survey found is that more employers are partnering with a vendor to manage leaves covered by the Americans with Disability Act (ADA). Overall, about 15% of companies are partnering with a vendor for ADA leave management, which was a 9% increase over the previous year. The increase was even bigger (17%) for large employers. “The vendor’s role is most often to provide supporting communications for the employer to share with the employee,” the report noted. “Over a third of respondents have a formal return-to-work program in place, and the prevalence of one increase with employer size.”
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