Emerging 2020 Leave Trends: What You Should Know*

By Peter Fabiankovic, Corporate Counsel, U.S. Insurance Law, MetLife

 

Workplace leave and absence management is top-of-mind for employers and employees, as it provides an important element of financial stability. Several studies bear this out, including MetLife’s 17th annual U.S. Employee Benefit Trends Study, where more than 90 percent of employees said short-term disability insurance is a must-have or nice-to-have benefit.

 

As a new decade draws near, employers should monitor the following three trends in employee leave –the legality of local government paid leave laws, employee misuse of leave laws and parental leave laws. All are important and increasingly hot topics of discussion for employers wishing to attract talent with strong benefits packages while staying in compliance with the ever-changing legal landscape.

 

 

  1. Local Government Paid Leave Laws

Decisions on the legality of local leave laws will drive change in the coming year. More than 20 cities and municipalities have passed laws that require employers to offer paid leave to individuals employed within the jurisdiction. Examples include New York City, Chicago, Philadelphia, St. Paul, Minneapolis, Los Angeles, San Diego, Austin, San Antonio, and San Francisco – with more coming on board.

 

While paid leave is vital to employees’ ability to manage personal health and life responsibilities, the introduction of local laws can create confusion and become a compliance burden – especially when they need to be coordinated with related state laws. For example, a national employer with offices across California might now have to comply with three different laws: the federal FMLA, California’s family leave law or disability law (depending on the type of absence), and either the Los Angeles or San Diego local leave laws depending on the work location of the employee requesting leave.

 

However, the enforceability of local leave laws has recently been called into question in Austin, Texas. In November 2018, in Texas Association of Business v. City of Austin, Texas, the Texas Court of Appeals entered an injunction blocking the City of Austin’s paid sick leave ordinance.[1] It reasoned that the ordinance establishes a wage by increasing the pay of employees on paid sick leave, thus violating the Texas Minimum Wage Act which governs employee wages and preempts all local laws attempting to establish wages. On August 30, 2019, the Texas Supreme Court (Case #19-0025) agreed to accept briefing on the City of Austin’s appeal.

 

Key Considerations: Employers should monitor the Texas Supreme Court’s decision. This will likely be the first time that a state’s highest court reviews a local leave law. The decision will impact similar challenges to local laws across the country, all of which will greatly shape employer compliance obligations going forward. In the interim, employers are required to understand and comply with federal, state, and local leave laws.

 

  1. Employee Misuse of Leave Laws

 

When used appropriately, the federal FMLA and other state leave laws fill an important societal need, protecting workers during some of the most vulnerable moments in their lives. Unpaid or paid leaves not only give sick or injured employees a chance to recover while retaining their job and financial stability, but also help ensure a healthier, happier, and more productive workforce.

 

However, there can be unintended consequences. The issue of employee leave fraud and abuse is a challenge for companies across the nation. It can be disconcerting, for example, to learn that an employee on leave for an alleged serious back injury is discovered to be water-skiing or rock climbing.

 

Such misuse of leave laws can be detrimental to an employer’s business and result in increased direct and indirect costs, ranging from overtime or temporary worker pay to a team’s lost productivity, safety issues, and low morale. Attempting to combat fraud, however, presents its own challenges as leave laws provide substantial protections to employees. For example, the FMLA makes it unlawful for any employer to “discharge or in any other manner discriminate against any individual” for exercising his or her rights under the law while out on leave (29 U.S.C. § 2615(a)(2)).

 

Employers can, however, investigate potential fraud with objectivity. One powerful tool when addressing suspected leave abuse is the “honest belief” defense. In jurisdictions that recognize it, the honest belief defense “precludes [retaliation] liability under the FMLA where an employer develops an honest suspicion that an employee is abusing his or her leave.[2]” This defense may protect the employer even if the employer’s suspicions are “ultimately found to be mistaken, foolish, trivial, or baseless.[3]

 

In other words, the employer only has to demonstrate that it reasonably believed that the employee was abusing the leave law. When judging the reasonableness of an employer’s beliefs, courts typically consider the thoroughness of the employer’s investigation and the evidence it relied on, including social media posts and employee interviews.

 

In addition to the honest belief defense, an employer can avail itself of other anti-fraud protections in the FMLA. For example, the law allows employers to invoke the right to request medical certification of the health condition and additional medical opinions if necessary. An employer can also request recertification of leave needs.

 

Key Considerations: There can be various reasons for unpaid and paid leave abuse, including a simple misunderstanding of the policy. Employers should consult with their company’s legal and HR experts before pursuing action. This will ensure the appropriate steps are taken for each situation and help get to the root cause of the problem.

 

  1. Parental Leave Policies

Employers offering paid leave for new parents (maternity, paternity, adoption, foster, or surrogacy) increased between four to six percent from 2017 to 2018 yet held fairly steady from 2018 to 2019, according to a 2019 employee benefits survey[1] from the Society for Human Resource Management (SHRM). Paid paternity and adoption leave are two types of leaves that have continued to evolve in 2019 due, in part, to stricter regulations and societal shifts favoring leave.

 

Several lawsuits and investigations by the U.S. Equal Employment Opportunity Commission (“EEOC”) in 2018 and 2019 shed light on the importance of understanding employer leave obligations. Employers cannot provide different parental bonding leave benefits solely based on gender. However, the law recognizes that certain types of leaves, for example, leave to due to pregnancy-related medical conditions, such as C-sections, would apply only to the birth mother.

 

Key Considerations: In light of recent lawsuits and EEOC scrutiny, a growing number of employers are revisiting their parental leave policies to ensure compliance with the current legal landscape. Employers should consult with their legal and Human Resources (HR) counsel to assess their leave benefits. This can help avoid expensive EEOC investigations, multi-million dollar fines and settlements, and negative media exposure.

 

1*The information presented in this article is not legal advice, should not be relied upon or construed as legal advice, and does not create an attorney-client relationship. This information is for general informational purposes only and does not purport to be complete or to cover every situation.
Texas Association of Business v. City of Austin, Texas, 565 S.W.3d 425, 430 (Tex. Ct. App. 2018).
2 Poitras v. ConnectiCare, Inc., 206 F. Supp. 3d 736, 746 (D. Conn. 2016), citing Vail v. Raybestos Prods. Co., 533 F.3d 904, 909 (7th Cir.2008).
3 Banks v. Bosch Rexroth Corp., 610 Fed. Appx. 519, 533 (6th Cir. 2015).



4 Things to Know About Family Leave and Your Income

Mother holding a baby.Becoming a parent is an extraordinary and, at times, stressful endeavor. Your life is about to fundamentally change. And as you plan the myriad dimensions of this new reality, you may be wondering how you’ll cover all the bills while you take time off work.

Family leave is a complex issue and it requires a good amount of research. Begin by reading your employer handbook or asking a co-worker how they dealt with family leave and what they were offered. Consider what will work best for you, in terms of the time you’d prefer to take off work. If you do become pregnant, make sure you let your boss know before anyone else. Embrace it enthusiastically as an opportunity for growth. As Carol Walker, president of the consulting firm Prepared to Lead tells the Harvard Business Review: “Planning for your maternity leave is an opportunity to demonstrate to everyone that you’re in the game.”

Here are a few ways you can replace your income during family leave:

Paid Family Leave

This is the ideal situation of course, but don’t hold your hopes up too high. The National Compensation Survey (NCS) conducted by the Bureau of Labor Statistics, revealed that just 14 percent of civilian workers had access to paid family leave in 2016. There are a few states who are pioneering paid leave: These include California, New Jersey, and Rhode Island, and New York joined the group in January 2018. If you work in the tech industry, you could also be in luck: Tech companies offer some of the best family leave out there. Ask your HR team or boss if they offer this benefit.

Short-Term Disability Insurance

Short-term disability insurance is another way to protect your income when you cannot work due to an illness or injury. This includes pregnancies — and it’s very commonly used for this purpose by employers. Short-term disability insurance plans often cover six weeks post-partum. It covers a portion of your income — normally around 60 percent. Several states such as New York, New Jersey, Hawaii and Rhode Island have short term disability laws in place. You can also purchase this form of insurance as an individual.

Unpaid Family Leave

The vast majority of American workers don’t have access to paid family leave (88 percent according to the NCS study). So your next step is to see if you qualify for unpaid family leave — which keeps your job intact although it doesn’t offer a salary. The federal Family and Medical Leave Act (FMLA) was signed into law in 1993 and it guarantees eligible workers up to 12 weeks of job-protected, unpaid leave per year. FMLA does have its limitations though: it only applies to companies that have more than 50 employees within 75 miles of your workplace. You also need to have worked there for at least a year and put in a minimum of 1,250 hours. Laws around this also vary from state-to-state so you’ll need to research your local situation. FMLA applies to giving birth, adopting a child, or fostering a child — and it can also be used in the cases of caring for a spouse or parent with a serious health condition. There are ways of making it work while on unpaid leave—you just need to plan well.

Paid Time Off (PTO)

Many people will use some of their PTO to cover their income for part of their leave. Your workplace may require you to use up your accumulated PTO before benefits can kick in. Others will allow the benefits to begin immediately, which may allow you to use some of your PTO to extend the length of time you can stay at home.

Take the time to educate yourself on the benefits that apply to you. Know your rights and don’t be afraid to try to negotiate a better deal. If you are just starting to think about having a child, now is a great idea to build out a financial plan to help avoid the stressors down the line. With a plan in place, you can relax and enjoy the extraordinary gift of welcoming a new life into the world.




How Paid Family and Medical Leave Policies Can Impact How You Choose Your Benefits

Annual enrollment will soon be underway for many employees. During this time, workers choose benefits they feel are most important to protect their health and financial well-being. Understanding the benefits your employer offers and their associated costs are most likely key considerations for you.

 

In this post, I am going to focus on one type of benefit – disability insurance – that insures your income if you can’t work for a period of time. I’ll also explain how this type of coverage interacts with a variety of paid-leave policies and programs. I hope to unravel some of the mystery and confusing terminology associated with both paid leave and income protection insurance.

 

Income sources if you can’t work

There are different ways to sustain an income when you can’t work due to an injury, illness or pregnancy. Personal savings, state and employer-paid medical and family leave, Social Security disability benefits, and private insurance are all sources that may be available. How do these sources help, and do they provide enough income to help you live the type of life you want to live?

 

Do the Research and Weigh the Facts

Disability happens! Even minor illnesses, injuries and pregnancies with a short duration of recovery (such as a knee surgery) can interfere with your ability to work and earn an income. In fact:

  • If you were to keep track of the 20 -year-olds in today’s workforce, you’d find nearly 25 percent of them will be out of work for at least one year due to heath conditions before they reach retirement. (1)
  • Almost half of American adults indicate they can’t pay an unexpected $400 bill without having to take out a loan or sell something. (2)
  • 6 percent of working Americans will experience a short-term disability (six months or less) due to illness, injury or pregnancy on average every year. (3)  

 

Make the Time to Increase your Knowledge

Where will you find the money to live if you lose your ability to work? Understanding the different income sources available can help you make choices during annual enrollment that fit your needs.

 

Employer-paid leave benefits can provide you with some kind of a paycheck when you can’t work, however, this income may not last long enough to meet your needs. And it’s up to your employer to (a) provide these benefits, (b) determine how long you can receive them, and (c) decide how much you get paid. Some paid leave programs only pay a percentage of your income – and this income is taxable. Sick leave and salary continuation benefits are examples of these benefits.

 

State- and/or federal-provided leave programs can give you an income while you’re unable to work. These programs include worker’s compensation, Social Security Disability Income, and paid family and medical leave benefits. Worker’s compensation benefits pay a percentage of your income if you have an on-the-job accident or work-related illness that cause you to leave work. Social Security provides long-term benefits if you’re disabled for at least five months, are qualified to apply, and are unable to work at any type of job. If you are approved, you may receive benefits up to the normal Social Security retirement.

 

State-mandated paid family and medical leave is emerging in a growing number of states. This short-term benefit provides you with an income while you’re out of work for medical conditions, for the birth or adoption of a child, or caring for a family member. Benefits are typically provided from 12 weeks up to 1 year and can cover from 50 percent to 90 percent of your income.

Oregon is the first state in the United States to offer 100 percent income replacement for low-wage workers taking leave for family, medical or safety reasons. Oregon (and New Jersey) includes victims of domestic violence in its paid family leave law, and defines family broadly to include “any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship” – in other words, you get to take time off to care for someone who is like a family member to you.

 

It’s important for you to check whether you live and/or work in a state where paid family and medical leave is available.

 

State-mandated disability insurance

State-mandated disability coverage is another source of income available to residents in a limited number of states and territories, including Hawaii, California, New York, New Jersey, Rhode Island, and Puerto Rico. These statutory plans generally provide benefits for six months up to one year. They pay you 50 percent to 70 percent of your income with a weekly cap on the maximum amount you can be paid (for example, $1,216 per week in California and $113 per week in Puerto Rico).

 

Statutory disability plans supplement your income for a short period of time, so you may want to consider adding other insurance products if you want to receive a larger sum while you can’t work, or in case you are out of work for a longer period of time

 

Voluntary, worksite or supplementary benefits. Many employers provide options for you to participate in short-term and/or long-term disability insurance. These options are offered by insurance carriers and supplement benefits you may receive from your employer, state and/or federal government programs. You pay the premiums for these optional benefits, although you usually pay less than you would if you bought this insurance on your own.

 

Short-term disability plans provide benefits for three months up to one year (after you satisfy a waiting or “elimination” period).

 

It may take a long period of time to recover from certain health conditions and complicated surgeries. In order to protect yourself from this risk, you can carry long-term disability coverage. Long-term disability insurance pays you benefits after you’ve been out of work for three months up to Social Security retirement age (again, after satisfying a waiting period).

 

Make the Choice to Protect Yourself

It’s important to understand the benefits available to you and how they work together to provide you with an income stream when you can’t work. These benefits help you live your life the way you planned to live it should you become pregnant, ill or have an injury. Making decisions about these benefits during annual enrollment is not always easy, but it is important.

 

Talk with your human resources area, read the materials available to you before annual enrollment begins, ask questions to clarify your benefits and the cost to you, and learn how all benefits may work together.

 

Most employers provide online access to information prior to annual enrollment that you can read on your own time schedule. Many employers also offer videos prior to enrollment. And meetings with human resources and insurance professionals as well as online chat may be available to help you navigate your benefit choices.

 

Remember, what you decide today could affect the rest of your life. Protect yourself and plan for unexpected events. This will help you take control of your financial well-being and help you live a happier life.

 

 

1. Social Security Administration, Disability and Death Probability Tables for Insured Workers Born in 1997, Table A.
2. Ibid
3. Integrated Benefits Institute, Health and Productivity Benchmarking 2016 (released November 2017), Short-Term Disability, All Employers, Condition-specific results.

 




How Companies Can Ensure Employees Feel Supported While on Leave


By Gene Lanzoni, Marketing, Thought Leadership, Customer Insights 
The Guardian Life Insurance Company of America


 

With the expansion of the American with Disabilities Act (ADA) more than a decade ago, employers have become more aware of their responsibilities with not only how to stay compliant, but the role they play in helping employees return to work. According to the U.S. Centers for Disease Control and Prevention (CDC), lost productivity due to absenteeism in the U.S. cost employers $225.8 billion annually, or $1,685 per employee. In today’s competitive labor market, many employers are looking for ways to retain their employees and adopting leave practices that help employees return to work from an extended absence due to injury or disability is becoming a priority.

As such, employers are responding with more personalized leave management and more robust stay-at-work (SAW) accommodations. Guardian’s most recent biennial Absence Management Activity Index and Study–“The Value of Leave Management Integration,” found three in four employers with a high level of return-to-work (RTW) and SAW programs reported decreased absenteeism, compared to only 40% of companies with no formal SAW program.

Guardian’s study also reveals employers are paying greater attention to the employee experience, one that offers a more supportive environment with additional flexibility, resources, and education. Employers seeking to upgrade their absence management programs to generate positive outcomes like high employee satisfaction and retention should consider the following:

Better Return-to-Work and Stay-at-Work Accommodations 

While it’s important to communicate with employees throughout their disability leave, it’s equally important to provide them with a smooth transition back to work. Employers should establish a strong RTW program that guides employees in a way that makes them feel supported. Guardian’s study indicates 70% of employees who completed an RTW program feel their employer cares about them. Additionally, companies that have four to six RTW initiatives see a 78% reduction in lost time, compared with 48% of companies that have no RTW initiatives. 

Employers have become more aware of their responsibilities under the ADA and are identifying ways to help their employees stay at work following an absence. These activities have expanded beyond traditional vocational rehabilitation to include interactive processes, transitional work plans, and worksite modifications to accommodate employees with disabilities. Providing employees with resources like nurse case management and duration guidelines can help reduce the likelihood of a relapse. Guardian’s study found organizations with the most comprehensive RTW programs appear to achieve greater success reducing lost time and improving employee retention. 


Flexibility and Personalization Go a Long Way 

Today’s technology makes it easy to communicate and inform a company’s workforce through various channels. So, it’s not surprising our study reveals that the accessibility of information has a great influence on employees when they are on leave. Every employee has a preference of how they’d like to communicate with their employer about leave, and Guardian’s study finds the majority of employees prefer to have 24/7 access to personal and mobile communications.

Employers that leverage new technology, including automated dialers, text messaging and chats are leaders in the absence management space because they demonstrate a willingness to accommodate to an employee’s schedule and individual needs. In fact, Guardian’s study reveals 21% of Index leaders use automated dialing technology, compared with 9% that lag on program improvements. The same goes for interactive voice response systems – 16% of Index leaders leverage this technology, compared with only 7% of those that rank lower in the Index. 

At the end of the day, many employees want to work for a company they feel cares about their well-being and that will help them navigate the journey through their disability. The data collected from Guardian’s Absence Management Activity IndexSM and Study supports the notion that employers who prioritize these programs see positive results in employee satisfaction and overall retention.


Unless otherwise noted, the source of all information is from the 2019 Guardian Absence Management Activity Index℠ and Study – “The Value of Leave Management Integration.