How to transform employee leaves-of-absence into a valued benefit
by Kevin CurryMr. Curry is Senior Vice President, Absence Management Solutions, Alight. Visit www.alight.com.
Think employee leaves of absence are complicated to administer correctly? You’re not alone.
There are hundreds of laws and regulations in the United States that apply to how employers must manage leaves of absence. Short-term disability (STD), long-term disability (LTD), Family and Medical Leave (FMLA), Americans With Disabilities Act (ADA)…these are just a few of the many different types of leave that an employee may take, all of which have different nuances and eligibility rules. There are specialty leaves (for example, organ donation leaves) and leaves that only apply in a specific municipality, or in a certain set of circumstances, like being a victim of domestic violence, or in the event of the death of a family member.
Most HR professionals are not leave experts. And compliance with the many regulations that apply to employee leaves of absence is not getting any easier, because the regulatory landscape is only getting more complicated. But there’s more to leave management than simply following the law. Compliance may be the challenge, but the strategic opportunity lies in setting up your organization’s leave program so that it also delivers strategic benefits.
The past few years have delivered unprecedented upheaval in the absence and disability management industry, but also a greater appreciation of what can be done with a great leave program.
During the COVID-19 pandemic, the U.S. – the only first-world nation that offers no national, mandatory paid sick leave for workers – saw some federal, state and even some municipal legislative changes in response to the crisis. Many businesses closed, at least temporarily. Faced with a choice between losing essential income or going to work sick, or after exposure to COVID, many employees chose to report to work if their workplace was open for business. Employers struggled with how to keep their employees safe, healthy and productive. The absence of paid sick leave policies became part of the national crisis.
In response to COVID, the federal government passed the FFCRA (Families First Coronavirus Response Act), requiring covered employers to provide paid sick or expanded family and medical leave for specific reasons tied to COVID-19. Although the FFCRA ended in 2020, since that time, 59 mandatory paid sick leave (PSL) and paid time off (PTO) laws have passed in the US, in 19 states, Washington D.C. and 25 other municipalities. As of July 1, 2023, 59 total PSL and PTO mandates remained. Several jurisdictions enacted more than one mandate; some mandates expired and others were amended.
Complexities Of Paid Leave
Paid leave is complex; nuances like how these laws apply to mobile, remote and hybrid workers, or how employers should plan for the budgetary impact of these laws, remain popular topics among leave experts.
Offering leaves that exceed government-mandated minimums has advantages for employers, not just employees. At a purely practical level, the availability of paid sick leave helps reduce the risk of further disruptions to the workforce due to sick workers infecting their colleagues. However, as government-mandated paid sick leave provisions proliferated and employee research began to come in post-COVID, employers learned that paid leaves delivered other benefits. A growing number of employers are voluntarily offering other leave types or longer leave durations to their workforce. An employee benefits survey by SHRM (Society for Human Resource Management) in June 2023 found that 33% of employers now offer paid leave to care for immediate family members, and 18% of employers provide paid leave to care for extended family.
The legislative and regulatory environment, at every level of government, will always be a factor for employers optimizing their approach to employee leave management. Recently, the federal government has stepped in to supply new protections for pregnant and nursing workers. The Pregnant Workers Fairness Act (PWFA), passed in 2022, created a national right to accommodation for pregnant workers at employers with 15 or more employees, where employers must now offer reasonable accommodation to employees who had limitations due to pregnancy, childbirth or related medical conditions. At the end of the 2022, Congress also passed the Providing Urgent Maternal Protections for Nursing Mothers Act (PUMP), which added protection for nursing workers, including the right to the time and a suitable location (not a restroom) to express breast milk.
These regulations are running far behind progressive workplaces where comfortable, dedicated “pumping rooms” with refrigerators and cozy chairs have been part of the floorplan for years. Thoughtful employers can do more than the minimum and stay ahead of the curve by anticipating what employees need and expect, while on the job and on leave.
A strong benefits program can help an employer attract and retain talent, and support better behavioral and mental health. A study by Buck Consulting found that employees with six or more weeks of paid parental leave are 84% more likely to return to the workforce at the end of their leave. If you offer less than six weeks of paid parental leave, they found that the likelihood of return drops to 50%. In other words, employees view paid leaves as a benefit. Alight’s perspective: leaves are absolutely a benefit, and a critical part of a comprehensive approach to ensuring employee wellbeing.
Employees ‘Less Well Informed’
At Alight, we see indications that employees are usually less well-informed about their leave benefits than they are about benefits like vacation time or 401K plans. They typically don’t know what kind of leave they’re eligible for, or when to ask for it. They need to know where to get help, and a way to understand what other support is available to them, whether it’s an EAP (Employee Assistance Program) program, disease management, or some other benefit. Technology can be a part of the solution to that communication gap. At this point, technology is part of the answer to many complex needs and tasks, from shopping to taxes and beyond – including understanding and accessing leaves of absence and additional accommodations.
Offering options like a leave portal, updates via chat or texting, and simple ways to upload required documentation and check on leave status are all reliable ways to improve the employee leave experience. Even better: include leaves along with other benefits on a single platform that offers multiple channels of engagement. Not everyone opens their email; some people prefer chat over phone calls, or texts over letters in the mail. Throughout the leave process, and especially as the end of the employee’s leave approaches, multiple channels are a key advantage for clear communication when the employer needs to confirm the employee’s intent and ability to return to work.
Again, what helps the employee also helps their employer. Good leave management technology effectively supports better HR operations by removing risk and error from HR processes. Instead of relying on email, the HR team can count on automated notification, and in some cases, auto-adjudication, to drive accuracy and consistency. Ensuring that an employee’s first day back happens on time and is productive requires that details like systems and facilities access are in place in time for their first day back from leave. Software that helps front-line managers ensure that these prerequisites are handled takes much of the risk and uncertainty out of the return-to-work experience and protects HR from making avoidable errors. It can also prevent inappropriate contact between a manager and an employee on leave, by providing the manager with information and insight without requiring direct contact with the employee.
Administration & Compliance
As the administrative and compliance burden of leave management continues to grow, employers navigating these challenges alone can easily become overwhelmed. The importance of having a subject matter expert has never been greater. Having an active monitoring solution that observes trends in the legislative landscape to help employers prepare for large impact decisions ahead of time enables HR teams to recognize the nuances and intricacies between various leave laws. Once these nuances are recognized, technology helps optimize the process and reduce the risk of missteps. Technology promotes consistency, which is one of the leading causes of HR violations tied to leave administration.
Leave technology does not exist in a vacuum. For example, 95% of Alight Leave Solutions customers choose to integrate our leave technology with their HCM platforms. We consider this a best practice, as uniting disparate HR data sources leads to valuable insights and a better employee experience. It also helps to reduce errors caused by manual data entry as well as improper terminations.
In today’s employment marketplace, it’s not enough to meet the letter of the law. Employers of choice view care of their employees as a strategic goal. It’s imperative that employers not only adhere to regulations but also focus on employee wellbeing and recognize their moments of extreme need. Whether it’s an illness in the family, the arrival of a new baby or deployment to military service, addressing the employee’s need in these “moments that matter” is a rare and critical moment for an employer to add real value to the relationship with that employee and their family. Having a sound, technology-enabled leave management strategy is essential to meet those challenges.