Leave management in 2018: More laws, more outsourcing
Employee leave is becoming increasingly complex; in just the last decade, employers have had to contend with not only a boom of state and local requirements but also an (albeit potentially imagined) employer leave benefits arms race.
“Leave management today is not just about FMLA," Terri Rhodes, CEO of the Disability Management Employer Coalition (DMEC), said in a recent webinar addressing the results of the group's annual leave management survey. DMEC has conducted the survey for seven years and has had to expand its scope to include leave provided under the Americans with Disabilities Act, paid sick leave and family leave, she said. And the complexities continue to grow.
For employers, these shifts mean more problems and more outsourcing, among other things, DMEC's findings show.
Whether dealing with mandated leave or leave provided as a benefit, small companies tend to manage leaves internally, while larger companies outsource leave management, the survey revealed. The overall trend to outsource, regardless of company size, is strong, however.
Especially for FMLA leave, 40% of companies with 1000 or more employees outsource, as do 27% of companies with 50 or more employees. Companies may bundle their outsourcing to one vendor, with short-term and long-term disability being the most common leaves outsourced to the same vendor, DMEC found.
Employers also reported that, more often than in the past, they're turning to brokers and consultants for help, in addition to their legal resources, as opposed to a third-party administrator or insurance carrier.
Managing intermittent leave
No matter what size the company, employers say that managing intermittent leave is the most challenging FMLA implementation activity, according to DMEC's survey.
That finding echos what other reports have found; in fact, Littler Mendelson's annual employer survey last year reported that employers find managing intermittent FMLA more difficult than managing any other federally mandated accommodation.
Both small and large companies reported difficulty training supervisors on leave requirements, as well as relying on managers to enforce leave-related requirements and to ensure that employees don't abuse leave.
More than last year, survey respondents said that a lack of interest and exposure by supervisors and managers created problems. “You can have supervisors or managers out there that maybe they have a small department and they haven’t ever had anyone on leave versus someone that manages a larger group that it’s more a day-to-day experience for them,” said Karen English, partner at Spring Consulting Group.
Employers noted that education for managers — especially online and/or mandatory — might ease this burden.
State and local laws
“Keeping up and keeping ahead — we expect that to keep getting harder with the pace we’re all working at,” said English, citing the different federal, state and local laws that companies must adhere to.
DMEC found that because of the complexities of these myraid leave laws, many have chosen to offer programs that provide more than the law requires, in an attempt to avoid running afoul of differing federal, state and local requirements.
Employers should note, however, that compliance is not always as simple as merely complying with the most generous applicable law; many have their own tracking and notice provisions, experts warn.
Looking ahead, survey respondents said they want to be less reactive in leave management. To that end, many said that in the next two years, they anticipate integrating their leave systems; enhancing training; and developing better tracking of reports, demographics and trends.