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Managing employee leaves can be a headache; leave-tracking platforms provide relief but pose their own challenges
Tracking and managing employee leave under the federal Family and Medical Leave Act (FMLA), state laws and short-term disability plans can be an ongoing administrative headache. But software-based solutions are providing some relief—even as they pose their own challenges, explained Abigail O'Connell, J.D., a compliance consultant at Radnor, Neb.-based Lincoln Financial Group.
To be eligible for FMLA leave, employees must have worked at least 12 months for the employer and, in the year leading up to the start of the leave, worked a minimum of 1,250 hours. State leave laws may shorten those requirements, and an employer's short-term disability benefits may fill in the gap between sick days and government-mandated leave.
While "the rise of telecommuting and flexible arrangements have complicated FMLA administration," O'Connell said, "employers can use technology-driven solutions to track irregular schedules and to check whether federal- and any state-level leave thresholds, as well as the company's own disability plan requirements, have been met." This can make administration more efficient for employers, "especially if they're using a system that has the rules built in for these eligibility thresholds," O'Connell noted.
Sometimes, for example, an employee is eligible for short-term disability as determined by the employer's benefit plan but not yet eligible for FMLA leave "because they've only worked at the company for three months, although your short-term disability eligibility waiting period might only be 30 days or new hires might get access to that benefit immediately," she said. "Conversely, you may have a short-term disability benefit that's available only to employees who work 30 or more hours per week, but someone who works less than that could still gain access to the FMLA leave."
This situation is further complicated by the growing body of state leave law. For example, Wisconsin recently passed a bone marrow and organ donor leave law, effective July 1, which is "one more leave that we've now got to track," O'Connell said.
Altogether, as regards federal and state leave requirements and company disability benefits, it's imperative to understand:
O'Connell added, "If you're running this off the side of your desk and not using some sort of rules-based technology, it's overwhelmingly complex. Often, it's more than a full-time job for somebody at a larger employer."
Software platforms for leave management are increasingly interactive, she said, and can be used by employers to manage leaves and by employees to enter leave data.
"Mobile applications, downloaded to employees' smartphones, let employees log their time off, so if they are eligible for an intermittent FMLA absence for migraines, for instance, and they have a flare-up, they can load the leave time on their phone."
This kind of self-service reporting is "good for employees, but it's also time efficient and good for administrators and employers," O'Connell said.
Some platform-based leave-management solutions are fully outsourced to a vendor. Typically, the employer sends the outside administrator a weekly file feed "that has everybody's information, so that if any employee calls in a leave, the administrator can tell instantly whether that person would be eligible based on the number of hours they've worked, their hire date and their location—all from the feed," O'Connell said.
"The administrator then pushes information back to the employer to say, 'so-and-so reported their time and they're going to be out this date,'" she noted.
But "if you're a small employer that isn't used to handling file feeds, or if you have to make a financial or staff investment to get yourself up and running on a feed, that could be a challenge when shifting to a fully outsourced approach."
Alternatively, there are co-sourcing options available where an employer downloads a vendor's software and then uses its own staff to administer employee leaves.
But "there's a high compliance cost risk of managing this internally if you don't have the expertise in-house to manage it," O'Connell pointed out.
She referenced data from Spring Consulting Group's 2016 Employer Integrated Disability, Absence and Health Management Marketplace Survey, conducted annually with the Disability Management Employer Coalition. The findings, highlighted in the chart below, reveal that a growing number of midsize employers (100 to 4,999 employees) are outsourcing family and medical leave (FML) administration.
Outsourced Family & Medical Leave by Organization Size (number of employees)
(Source: Spring Hill Consulting Group)
Smaller employers may feel challenged by the cost of outsourced solutions, and large employers, particularly in the 5,000 to 9,999 range, may have the staff and resources to handle leave administration in-house, O'Connell explained.
Related SHRM Articles:
Approving FMLA Leave Does Not Automatically Rule Out Liability,
SHRM Online Employment Law, July 2016
Managing Family and Medical Leave, SHRM Toolkits, February 2016
DOL Issues New FMLA Poster, Publishes Employers’ Guide, SHRM Online Benefits, April 2016
Steps to a Successful Absence Management Program, SHRM Online Benefits, February 2015
Curbing Intermittent Leave Abuses, SHRM Online Benefits, April 2014
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