Perspective is Everything: Annual Leave Management Survey Offers Practical Insights
The 11th annual DMEC Employer Leave Management Survey white paper, published April 15, provides context for an increasingly complex industry that affects all aspects of an organization’s success. The survey has grown in size and scope since 2011 and illustrates a growing recognition that integrated absence management programs mitigate costly compliance risks.
“When we look back 11 years ago, it was really all about FMLA [Family and Medical Leave Act] management, and now there are so many other leaves that employers are responsible for managing and integrating,” said Terri L. Rhodes, CEO for the Disability Management Employer Coalition, which conducts the report with Spring Consulting Group. “This industry continues to become more complex which is something we have noted since the very first survey was published in 2011.”
This year’s survey, which represents input from more than 700 employers of all sizes that operate in all U.S. states and a range of industries, shows greater employer understanding of regulations and the importance of reducing compliance risks.
And that was not always the case, said Karen English, senior vice president of Spring Consulting Group, who discussed survey findings and industry takeaways with Rhodes in an episode of Absence Management Perspectives: A DMEC Podcast.
“Employer awareness and sophistication has gone from zero to 100 in the last 11 years”, said English, who added that employers weren’t sure if they were subject to certain leave types 11 years ago whereas now they are proactively managing them. “Overall, I would say that what used to be kind misunderstood area has become a specialized career.”
In fact, as Rhodes noted, most companies “didn’t have a specialized absence management professional 11 years ago”. And while many of these professionals juggle other human resources-related tasks today, more companies now staff appropriately.
A Need for Specialization
After flipping through the 45-page white paper, the need for specialization and appropriate staffing to avoid litigation from compliance errors becomes clear.
With 80 questions, the survey provides context for how employers manage different leave types — from federal laws like the Family and Medical Leave Act (FMLA) to local and state leave laws and company-sponsored leaves, such as parental leaves (paid and unpaid), which may overlap. For comparison purposes, the number of states with paid family leave (PFL) jumped from three in 2011 (California, New Jersey, and Rhode Island) to 11 in 2021.
In addition to compliance issues, employers must consider equity issues and how PFL affects employee engagement and retention when you consider that 40% of working employees are parents and 23% of the workforce has access to PFL programs, according to speakers from The Standard during the 2022 DMEC FMLA/ADA Employer Compliance Conference.
Important Nuances of Leave
To ensure equity, employers need to look at their benefits — including leaves — holistically and assess which employees are covered, how the leave laws interact, and who pays for leaves such as short-term disability, long-term disability, and bonding.
The real question is do you provide the leave unilaterally across the organization. And, if not, does that represent inequitable treatment?
Unique Elements
Unlike other industry reports, the DMEC Employer Leave Management Survey white paper focuses on the unique elements of absence management with an analysis of practices and processes.
The goal, as English noted during the podcast, is for employers to read the white paper and apply what they’ve learned about different industries and companies of all sizes with their teams. And, equally important, “they can discover how their policies compare with their peers.”
One finding that DMEC experts noted is the number of employers of all sizes that use manual methods to track leaves, and the percentage of employers in all industries and of all sizes that manage programs internally.
English and Rhodes discuss the ramifications of relying on manual processes to track and manage leave during a time of increasing complexity due to new leave laws at the local and county levels.
Manual methods are not only time consuming, “but can result in human error,” English said during the podcast. In fact, some employers still use paper to track leaves, which can increase compliance risk. “When there isn’t a workflow to guide you… regulatory timelines can easily be missed.”
Rhodes shared compared manual processes with automated regulatory-based business rules that are built into many technology solutions that drive actions as well as an automated workflow that takes users through the process.
Using these types of tools to track leaves helps employers in myriad ways, said English. “It’s really safeguarding the process,” she added. Technology options are outlined in the January issue of @Work magazine.1
“Technology makes the business process more efficient,” added Rhodes, who noted that there is a perception that employers can’t really afford a technology solution.” Data from the report shows that more employers with fewer than 1,000 employees rely on manual methods than in 2020. However, that may change in coming years according to data, which shows 20% of the employers that use manual systems are considering leave management technology — particularly those with more than 5,000 employees.
Those that use technology cite the value of automated employee communication, decision support tools, data exchange, and case management provided for an increasingly confusing landscape especially for companies that operate in several states.
A best practice is to assess operations to identify — and fill — existing gaps before those gaps in process, knowledge, and staffing lead to non-compliant scenarios.
And considering the number of complaints the Equal Employment Opportunity (EEOC) investigates, there is room for improvement. For example, in fiscal year 2021, employers paid $1,436,259 paid in back wages.2
The risk of even just one lawsuit can illustrate the cost-benefit analysis or return on investment of using technology, English said. “It becomes really clear and, in some cases, obvious when you think about all those costs that are being expended compared to making it more efficient and less time-consuming with software. Employers need to find out what they need before determining what they can afford.”
Staffing Matters
The number of leaves continue to increase at a time when managers and supervisors have more on their plates, which adds additional stress and requires them to look at things differently to avoid costly compliance issues.
The key is for managers to “recognize when they need to do something and what they need to do next rather than knowing the ins and outs of every single leave type and every single law that an employee might be subject to,” English explained.
To do that, employers must invest in education and reassess staffing models. The survey includes data on dedicated staff versus designated staff, breaks information down by employer size, and lists additional responsibilities.
“We should be at a time when management commits to more people resources, but that’s being challenged by the job market,” English said.
With a growing number of variables as well as tools to address the complexities of absence management, the data guides employers considering different approaches and those that want to benchmark their programs against industry norms.
Industry data can validate program structure and practices and support proposed changes. It helps employers stay competitive, attract and retain employees, and justify recommendations for change.
DMEC members have access to the full white paper. Nonmembers can download the executive summary.
References
- An Employer’s Guide to the Technology Solution Galaxy. Jan. 14, 2022. Retrieved from http://dmec.org/2022/01/14/an-employers-guide-to-the-technology-solution-galaxy/
- Department of Labor. Wage and Hour Division. Family and Medical Leave Act. Retrieved from https://www.dol.gov/agencies/whd/data/charts/fmla