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Changes in Leave Benefits Are on The Horizon

Thursday, November 3, 2016
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This is part of a special advertising section featuring strategies for tackling what lies ahead for the human resource profession in 2017.

In 2017, employers can expect to see a significant number of changes in paid employee-leave programs and related compliance requirements. No matter what the outcome of the election, both candidates have plans to add paid employee-leave policies at varying levels. Not only can paid leave help attract and retain job candidates, it can also have a positive impact on job satisfaction and engagement.

Currently, 37 U.S. jurisdictions require employers to provide paid sick leave and the requirements vary. For national companies with employees in multiple locations, this can present challenges. They will need to establish one paid-leave program that offers the same benefits companywide or different programs based on the employee's jurisdiction.

From an employee-morale perspective, offering the same program for all locations can promote goodwill and increase job satisfaction.

On the administration side, a single policy simplifies administrative practices. Similar to myriad state family and medical-leave mandates, it is a challenge to manage different plans in multiple states and jurisdictions with different requirements.

From our experience, many national employers prefer to offer a single policy that is fair, generous and designed to meet the needs of all of their employees -- all while ensuring minimum requirements are met.

For employers that choose to offer paid-leave programs that mirror the various existing jurisdictional requirements -- and those to come -- across the country, they need a good mechanism to track each employee's time.

Third-party administrators, such as Sedgwick, are working on enhancements to systems that can assist employers with the compliance requirements related to paid sick leave. Typically, the employer passes data about the employee's location and the hours he or she worked. From there, the system will accurately calculate the accrued time based on the jurisdiction and provide a method to track usage.

Along with the changes in paid-leave programs, the U.S. Department of Labor is increasing its compliance reviews on Family and Medical Leave Act and Employee Retirement Income Security Act plans. Employers will want to ensure their policies and plans are reviewed and documented appropriately, and be ready for potential reviews by the DOL. Contrary to popular belief, the DOL can perform FMLA and ERISA compliance reviews without a formal complaint or cause. In addition, ERISA penalty amounts were adjusted for inflation for penalties assessed after Aug. 1, 2016. For more information and the new penalty amounts, see the DOL fact sheet.

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Employer Considerations

As new changes are implemented, having a streamlined system for calculating and tracking leave time will be vital. In addition, employers should dust off their FMLA and ERISA policies to ensure they are up-to-date and reflective of each practice. You will be assured of compliance, and your employees will be better informed of their responsibilities and rights to receive such benefits.

Key points for employers to consider:

* How will a leave program impact other health and welfare benefits from an eligibility perspective?

* Will the varying paid-leave programs have an impact on employee morale?

* How will absences be monitored, tracked and documented?

* Is your FMLA policy up-to-date? Some employers have policies that have not been updated since the FMLA was enacted in the 1990s. Ensure your policy includes all updates from the technical corrections and is in line with your current practices for managing the program.

All of the upcoming changes impacting employee-leave benefits will require employers to take a close look at their current systems and the policies they have in place, and prepare for changes in the coming year.

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