Managing leave time can be tricky—but doesn’t have to be.
By Dan Scanlon
Employers are faced with considerable challenges when it comes to effectively monitoring and managing absences related to the Family and Medical Leave Act (FMLA). Absence management can be a costly issue for employers, resulting in the exhaustion of countless administrative hours, lost productivity from absent employees, additional staffing-related costs, and—perhaps most importantly—increased liability.
Today’s workforce is more knowledgeable than ever about the intricacies of FMLA. As more employees use the act, employers must ensure that they are compliant with leave administration regulations to avoid exposure to legal and financial risk. Employers also want to maximize the value of their workforce by only approving leave requests that are valid in nature. With that in mind, consider these findings:
• Research by the Employment Policy Foundation found that compliance with FMLA costs employers more than $21 billion in lost productivity, continued health benefits, and labor replacement.
• The U.S. Department of Labor reports that during fiscal year 2010, employers owed more than $1.6 million in back wages to 1,012 employees who filed FMLA enforcement actions.
• HR.com reports the average verdict for FMLA cases related
to wrongful termination is nearly $335,000, with some industries having one-third of their staffs on FMLA leave at any given time.
• According to the Society for Human Resource Management
(SHRM), 52 percent of all U.S. employers—and 63 percent of employers with more than 500 employees—believe they’ve granted FMLA time off that was unfounded.
• Respondents to the most recent Employer Measure of Productivity,
Absence and Quality annual survey reported a median annual incidence for FMLA claims of 14.9 per 100 covered employees in 2009, an increase from 12.5 in 2008.
Given these statistics, it’s not surprising that a 2011 survey of human resources professionals by the Employers Resource Association showed FMLA administration as the single most asked-about topic, with intermittent leave falling close behind.
An increase in the number of FMLA claims can have a substantial impact on an organization’s productivity and its bottom line, which is especially difficult to absorb in a troubled economy. “Even as the economy begins to improve, companies remain under growing pressure to constrain costs while at the same time increase the productivity of their workers. We expect companies will be taking a hard look at all of their absence programs. Identifying areas where better tracking, management and reporting for these programs will be all that more critical,” said Helen Darling, president and CEO of the National Business Group.
Keeping It in Check
No single approach to administering FMLA works best for every organization. While many companies manage FMLA requests and documentation using their own internal resources, others find that outsourcing FMLA administration can be an economical alternative. Some HR professionals are encountering a variety of additional issues that compromise their ability to manage FMLA requests internally:
Workload. FMLA-related recordkeeping for all employees can place a significant burden on a company’s human resources staff. According to SHRM, employers are already spending an average of 2.5 hours to manage each FMLA case, a number that is sure to climb as FMLA legislation becomes more complex.
Tracking time and costs. With intermittent leaves—the most time-consuming category of FMLA leave—accounting for 45 percent of approved claims, HR professionals often find it difficult to track and administer leaves on their own. In fact, according to a recent survey by Liberty Mutual Group, almost half (49 percent) of survey respondents did not know what their organizations’ absence-related costs were. And those respondents who claimed to know their organizations’ costs often underestimated them.
Keeping current. Oftentimes, employers find it challenging to interpret and keep up with ever-changing federal and state FMLA requirements. In addition, the trend of states and jurisdictions to mandate paid leave can further complicate FMLA administration.
Abuse. Companies that self-administer FMLA have higher rates of abuse, which correlates with higher approval rates, higher intermittent leave times, and more total hours in FMLA absences.
Given these complexities, a growing number of employers are turning to outside vendors to help manage FMLA leave. Outsourcing FMLA administration minimizes employers’ exposure to risk and enhances their ability to manage FMLA absences—particularly for intermittent leaves. It also reduces the workload for HR and provides organizations with a company-wide leave management approach that is consistent across all locations.
While outsourcing FMLA administration allows employers to leverage their internal resources more efficiently, it’s also important to connect members who take FMLA leave with resources to help them get back to work quickly. One of these resources is an employee assistance program (EAP).
An EAP can have a positive impact by supporting employees who are dealing with the type of concerns that typically cause FMLA leave, such as a personal illness or dependent care needs—concerns that are often accompanied by anxiety, depression, or other behavioral health issues. Integrating an EAP into the FMLA administration process can help employees address their personal concerns and minimize their time away from work.
In addition, certain FMLA events also present opportunities for an EAP’s work-life benefits to stand out. Through dependent care referral services, legal consultation, and financial guidance—all of which are typically offered through an EAP’s work-life benefits program—employees have another resource that supports them during a difficult time and helps them return to work with fewer personal burdens.
At a time when the complexity and cost of FMLA leave are on the rise, it’s important for employers to understand the benefits that they—and their employees—can gain by outsourcing FMLA administration and integrating an EAP. In addition to lowering costs and minimizing liability, outsourcing and integrating FMLA with an EAP can help create a healthier and more productive workforce overall. As Tom Parry, president of the Integrated Benefits Institute, a nonprofit health and productivity research firm, is quoted as saying about integrated program, “The mind-set has really become: If we invest in employee health, not only will employees be healthier, but they won’t be absent from work, and they will be more productive while at work. That’s the magic of this whole thing.”
Dan Scanlon is a product director at CuraLinc Healthcare. He can be reached at email@example.com or 224-534-2900.