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Employers Struggle to Comply With Diverse Leave Requirements

January 28, 2009
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Related Topics: Work/Life Balance, Benefit Design and Communication, Featured Article, Compensation
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Whether President Barack Obama will expand the Family and Medical Leave Act as promised during his race for the White House could depend on the nation's economic health, consultants say.

But even without another expansion of the FMLA, employers already are struggling to track employee leave under a growing number of state and city time-off mandates, some of them requiring time off with pay, which federal law has yet to require.

The growing pressure on employers to comply with various leave laws—including recent FMLA changes—comes as the faltering economy could slow a trend of companies outsourcing the tracking of absences and their compliance with the expanding leave mandates, says Marcia Carruthers, CEO of the San Diego-based Disability Management Employer Coalition.

"It's definitely going to be harder on [employers] to stay in compliance," Carruthers says. "We may see a slight shift [away from a trend for employers to outsource] because they are not going to have the funds to do that. So they are going to have to try to figure it out for themselves."

Recent time-off mandates include one that voters in Milwaukee approved in November for a February 10 implementation. The Metropolitan Milwaukee Association of Commerce has mounted a legal challenge, but the referendum would require private-sector employers in Milwaukee to allow workers to accrue up to 72 hours of paid sick leave.

Businesses with fewer than 10 employees would have to provide fewer hours, up to 40 hours of sick leave.

The leave could be used for an employee's medical care or family care or to seek help for domestic abuse or sexual assaults. San Francisco and Washington have adopted similar laws, observers say.

The expanding number of leave laws is making it more complex for employers to remain compliant, says Tom Klett, senior consultant at Watson Wyatt Worldwide in Stamford, Connecticut. Employers are increasingly concerned that additional mandates, in addition to the paid time off that companies traditionally provide their workers, will harm business operations and productivity, Klett says.

The time that employees spend away from work because of workers' compensation or disability claims, as well as issues such as bereavement leave, adds to the complexity of tracking and complying with the expanding leave laws, says Joanne Archer, manager of leave services in Dover, New Hampshire, for Liberty Mutual Group Inc.

"The complexity comes from the employer having to track the amount of time an employee has available both under federal, and now state, leave benefits," Archer says.

States—such as Vermont last year—also have adopted laws requiring time off for crime victims and to allow parents to attend functions at their children's schools, says Bryon Bass, absence-management practice lead for Sedgwick Claims Management Services Inc. in Albuquerque, New Mexico.

"We are seeing such a prevalence in the number of new laws that are either being put on the docket or being enacted that we have had to resort to providing a monthly bulletin to our clients of these changes and changing our administrative [tracking] procedures," Bass says.

At the same time, the FMLA recently has grown more complex with new regulations, Carruthers and others say.

A year ago, then-President George W. Bush signed legislation expanding the FMLA to allow employees up to 12 weeks of unpaid leave when a spouse, child or parent is on active military duty. It also allows 26 weeks of FMLA leave to care for a service member injured on duty.

The changes took effect January 16, and mark the first expansion of the FMLA since 1993, when the law first was adopted.

Among other requirements, the new federal regulations also call for employers to inform employees about the amount of remaining leave time available to them under the FMLA within five business days of a request, Archer says. Periodic notification of remaining leave days also is required.

Additional FMLA expansion may be on the way, several observers say. They cite Obama's campaign pledges to help workers balance work and family.

That could include allowing employees to take time off for elder care, a child's school activities or caring for any individual residing in their home for six months, according to the Obama/Biden Web site.

But efforts to boost the economy could hamper those efforts, consultants agree.

Employees, meanwhile, are likely to weigh the scarcity of jobs in the economy when deciding whether to exercise leave rights, the consultants point out.

Some will take less time out of fear for their jobs, says Carol Tavella, senior manager of compensation and benefits at SMART Business Advisory & Consulting in Devon, Pennsylvania. Others will take more time off for mental health purposes because of the "stress component of the economy," she says.

During the nation's last economic contraction, employers saw a net increase in absences, Bass says. That happened because enough employees, fearing they might eventually lose their jobs and the accompanying medical benefits, underwent surgeries and other medical care they previously had postponed.

To ensure that employers remain in compliance with the growing number of leave scenarios, it is best to centralize the effort under one person or one group, Tavella says.

Over time, more large employers have hired consultants to track the leaves for them. But, as Carruthers and others point out, that practice also could become a casualty of the economy.

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