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How Employers Are Navigating Leave Laws

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Government-mandated paid family and sick leave is a growing reality. Four states have paid family leave laws while two others and the District of Columbia have passed yet not enacted similar legislation.  And that doesn’t include the states and municipalities that have adopted paid sick leave mandates.

How are employers responding to these new mandates and the greater administrative burden they bring? In Mercer’s 2018 Absence and Disability Management Survey, 64% of respondents said they’ve had to devote additional overall resources to handle the increase in state and locally mandated paid leave during the past five years. Perhaps in some cases, this meant outsourcing. Outsourcing of short-term disability administration increased from 61% of respondents in Mercer’s 2015 survey to 67% in 2018. Outsourcing of Family and Medical Leave Act (FMLA) administration increased from 40% to 44%.

When asked about their approach to complying with state and local leave laws, the majority of respondents (65%) simply track and comply with the laws and regulations that apply to their operations, with 38% using a third party to help. But some employers have chosen to make changes to their actual leave policies to help make compliance with state and local leave laws easier: 12% of respondents maintain a single national policy based on the most generous state/local leave law with which the employer must comply and 27% have established a leave policy that meets or exceeds all state/local requirements.

Given the significant number of respondents that have increased resources devoted to handling state and local leave administration, it’s not surprising that more than half of respondents would support the concept of a voluntary federal minimum standard under Employee Retirement Income Security Act for paid leave that, if met, would shield employers from having to comply with state and local requirements. Such legislation, called the Workflex in the 21st Century Act, was introduced in Congress late in 2017. With the changes in Congress resulting from the midterm elections, the future of that bill is unclear.

It seems likely that the pace of change at the state and local level will only increase. That puts the burden on employers to periodically review existing leave policies to ensure they align with current statutory mandates and to prepare to meet new ones.

States with paid family leave laws are: New York, Rhode Island, California and New Jersey while Washington and Massachusetts join the District of Columbia with family leave laws that have not yet taken effect.

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