Navigating the Maze of Employee Leave Programs

Viewpoints from Craig Hasday

Leave Management is taking on a life of its own for beleaguered Human Resources teams.

The proliferation of state-based paid family leave programs, each with their own nuances, add enormous complexity for HR professionals who have already been contending with existing disability benefits. Explaining these benefits to employees can create confusion or ill-will if they are misinterpreted, especially for an employee who is unable to work due to illness or injury, whether to themselves or a close family member.

To start at the beginning – six jurisdictions have statutory short term disability benefits: New York, New Jersey, California, Hawaii, Rhode Island and Puerto Rico.

The terms of these plans are written into state laws and can be expanded, but the regulations spell out the minimum benefits. Many employers augment these plans in states without a statutory requirement, or for those jurisdictions whose benefits are insufficient, such as New York’s benefit of $170 per week for 26 weeks. The supplemental plans can be employer sponsored and covered by Employee Retirement Income Security Act (ERISA), or voluntary and not subject to ERISA. (This distinction will likely be the subject of a future blog posting.)

In 1993, the Family and Medical Leave Act (FMLA) was signed into law.

Eligible employees received job protection, but not income protection, when leave became necessary due to illness or injury affecting the employee or a close family member. This law added complexity since timeframes, benefit durations and administration overlapped other short-term disability solutions. Add in waiver of premium benefits for life insurance, and benefit portability rules in the event of severance from the employer – this has all created a tangled web. Most employers adapted by running plan benefits concurrently so as to not inadvertently extend benefit durations, and larger employees looked to outsource leave determination to specialist firms, which were often disability benefit insurance carriers.

Because FMLA doesn’t cover all employees and doesn’t provide for lost wages, there have been efforts to improve FMLA, adding pay and other benefits.

Ten states lost patience waiting for a national solution and passed Paid Family Leave (PFL) laws, each with their own set of rules, notice requirements and benefit levels. Human Resource professionals, especially those with employees in multiple states face new challenges, such as:

• Which laws apply in the event the employer state, residence state and work state are different?
• How are appeals handled?
• Are the eligibility requirements for each of the plans aligned, including rules for intermittent leave?

State-based PFL has made leave administration even more complex and more confusing. To shed light on this problem, EPIC will host the first of our national webinar series – “Benefits Curve: Insights to Action” “Multi-State Paid Family Leave & Medical Leave: What’s New and What to Do in 2023” on Thursday February 23 at 12:00 PM ET.