In this guest blog post, Lisa Rowan, Research Vice President for IDC responsible for global research on human capital and talent management software and services discusses the challenges for organizations with the ever increasing and complex legislations and compliance needs related to leaves and absences which need to be complied with.
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It’s Timeto Comply!
- Sponsored By: SAP
- Guest IDC Blogger: Lisa Rowan
- Date:April 2023
In the words of Benjamin Franklin, “In this world, nothing is certain except death and taxes.” Carrying this over to the world of HR, we could say that nothing is certain except for the need to comply. HR wears many hats. It is the ambassador to new employees, comforter of workers in distress, and supervisor of company policies to ensure they are carried out appropriately. What is sometimes forgotten is that HR is also ultimately responsible for all facets of employment compliance. The failure to comply brings with it the possibility of costly penalties, something employers need to avoid. One HR functional area that is particularly compliance centric is absence/leave management, which fits into the broader area of workforce management.
There are different types of employee leave in the United States. How they are handled by employers can vary based onterms and conditions set by the states. Examples of authorized absences include annual vacation, parental leave, public holidays, and medical appointments. Unplanned absences include those associated with sickness and injury. Unauthorized absence occurs when employees are absent without prior notification to the employer.In addition, there are distinctions across paid sick leave, FMLA leave, and paid family and medical leave. While these last are all types of paid or unpaid time off from work, they are also distinct policies with different laws governing them. The U.S.Department of Labor provides a guide that distinguishes these various leave types.
It is important to understand both legal compliance and best practices when it comes to leave management.
Listed below area few of the many potential risks associated with improper management of leave administration.
- Beyond the legal jeopardy, employee morale may be negatively impacted by absence management that is inconsistent or difficult to understand.
- All employees must be treated equally when it comes to leave management, otherwise employers could face claims of discrimination.
- Companies may run into legal trouble if they are inflexible around absence. Laws such as the FMLA guarantee employees the ability to take leave if all required conditions are met. Knowing and understanding these conditions is paramount.
- If leave tracking is inaccurate, the employer could find itself owing much more time than originally considered.
- Leave administration must not appear to discourage employees from taking leave such as FMLA.There are rights granted to workers that employers must understand and observe.
The following example illustrates the complexities of balancing federal and state rules along with any negotiated policies between a company and its unions. Organizations need to comply and so their absence/leave management software needs to account for and support such scenarios.
Example
- An employee is taking time off for surgery and rehab. This worker has been authorizedfor intermittent leave per the FMLA guidelines. The same employee is also caring for a family member and needs intermittent leave to assist with that person’s follow up and treatments. For this second leave, the employee has been approved per the company policy as well through the FMLA. Both leaves overlap. When an employee is absent with two or more leaves that overlap, it can be difficult to determine the leave banks that should be used to ensure the proper regulatory and company-specific benefits are provided to the employee.According to the company rules, the employee is allowed to use vacation concurrently with FMLA, so they are paid for absences under both leave types. They can also use sick time and short-term disability concurrently if the leave is long enough for the employee’s own health condition. Software needs to coordinate the usageand its order andpayment across all the various leave banks.It also needs toapply the rules (such as waiting periods for short-term disability) and switch to unpaid leave automatically when the leave banks are exhausted and then automatically switch back to paid leave when the banks have accrued more time.
Engaging with a well-seasoned solution provider can help an organization navigate through and ensure compliance with complex leave management scenarios such as the example above. Just as manyindividuals work with a tax professional in their personal finance area, companies should seek the same level of professional expertise when it comes to compliance with all the nuances associated with employee leave.
The right partner can help a business improve its best practices and avoid compliance issues.
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