Leave programs provide employees with much needed time away from work to manage their own well-being or the well-being of their family. In today’s competitive recruiting environment, these types of family-friendly benefit programs can be the tipping point for attracting and retaining talent as an increasing number of professionals seek out companies that offer this kind of support.
But as companies take strides towards building more robust and attractive leave programs and policies, there are also inherently more opportunities for potential missteps. There’s a substantial amount of financial risk at stake for companies that mismanage this process, including direct hard costs from lawsuits and indirect costs from how a broken leave process can negatively impact the employee experience, resulting in recruiting and retention challenges.
Below are some of the common pitfalls companies and HR teams experience when managing employee leaves, along with guidance on how to avoid them:
Misinterpreting the legal jargon.
Unless you’re an attorney, it can be very difficult to interpret the legalese of each state’s family and medical leave laws. However, if you’re unable to do so, it becomes very tricky to know which employees are eligible for leave, the qualifying criteria for leave eligibility, the amount of leave pay each employee is owed, and for how long you as the employer are required to provide job protection.
Understanding how these laws may or may not run concurrently is a common and high-cost mistake. For example, if a company employs someone living in New Jersey who takes a leave of absence for the birth of a baby, the law states it does not provide leave for the employee’s own health condition, which essentially means that an employee can be entitled to 12 more weeks of job protected leave, following their 12 weeks under the Family Medical Leave (FMLA). It’s also very common for an employee to return from FMLA leave and then have to engage in the Americans with Disabilities Act (ADA) interactive process with the employee and provide additional time away from work as an accommodation. It’s not uncommon to get the legal team involved in ADA-related leaves given the amount of complexity of the situation and how these laws often overlap. These are just a few examples of where the misinterpretations of laws in each state can pose problems.
As noted above, there are high-cost stakes on the line when getting the legal aspect of employee leave being incorrect. Leverage those who have been through the process to help you navigate these legal landmines, whether it’s reaching out to your community of other people leaders or legal experts, or investing in a leave administrator. This will increase the likelihood that your employees will have a positive experience and avoid any reason for needing to take legal action, or looking for employment elsewhere.
An employee taking a leave of absence is about to go through a very personal journey, which can be both physically and emotionally draining, so the last thing this person should be burdened with is an issue with their paycheck. But unfortunately, payroll errors are very commonplace during leaves of absence. In some cases, employees are eligible to receive pay from three different sources (state wage replacement benefits, group disability insurance, and company pay), which results in complex payroll calculations. Additionally, it’s very common for leave start and return dates to change with no advance notice (such as when a baby is born early), which means payroll reconciliations must occur if the employee has already been paid.
Keep in mind that every leave is unique, and benefit amounts may vary based on employee tenure, employment status, which state they reside, and their compensation level. Prior to calculating payroll it’s important to confirm benefit amounts from each source as early as possible, and to also be prepared to run reconciliations for unexpected happenings. The payroll team should have a payroll plan in place for each employee, tracking each benefit to ensure the employee isn’t over or under-paid.
Employee leave is a very date-sensitive process, not only as it relates the dates associated with leave-start and return-to-work, but also with regard to strict deadlines that must be met to avoid negative consequences and compliance headaches.
For example,take the FMLA. The eligibility notice must be provided to the employee within five days of their initial request. Failure to provide this notice timely can result in an FMLA interference claim. There’s also deadlines relating to filing insurance and state benefit claims timely, as well as updating health insurance for any life changing event that may have occurred while on leave. Some employers leave this up to the employee to track, but employees have a lot going on during their leave, so when they miss deadlines (which understandably they often do considering they’re experiencing a major life event), they can become very disgruntled by the experience and begin to develop a less-than-favorable feelings about their employer.
The key here is to create a leave timeline that closely tracks the steps needed to be taken when a leave is requested. Build out the notification process for required and important notifications and deadlines and include this in your step-by-step leave process workflow. If resources allow, partner with others on your team to establish a workflow for checking payroll errors. Provide the employee with a copy of their own leave timeline and provide guidance to help them remember their required actions for claims filing and deadlines for form submissions.
With employers becoming increasingly nervous about the compliance aspect of leave management and how to avoid lawsuits, they often overlook the importance of an effective communication strategy that helps provide clarity and assurance to an employee leading up to, and during, their leave from work. Having an unclear, poorly written leave policy, or lack thereof, is a common weak spot for many organizations. This also creates issues with being able to ensure inclusivity and apply consistency in how employees are treated. When your policies are unclear and your communication is confusing, the onus is on the employee to figure everything out – at a time where they can really use some help.
The HR team should work with company leadership to establish a policy that is well-structured, inclusive, compliant and clear – which will set the foundation for providing clear communication about the leave of absence process. Leverage the experience from those that have launched successful leave programs so that you’re not building from scratch and learning the hard way. Over communicate the process as early on as possible, even prior to candidates accepting their offer, which will in turn, establish a culture where employees feel comfortable asking questions before their leave starts.
Not training managers.
People leaders know the importance of training managers on HR best practices, such as which types of questions to avoid asking in an interview, how to give feedback, and how to conduct an employee termination. However, there’s rarely a process in place for training management on employee leave best practices.
Many employee leave lawsuits can be traced back to a manager’s lack of understanding about the appropriate steps to take when an employee requests a leave of absence.
Some managers will even take disciplinary action when an employee requests leave (even to the point of termination), which of course are actions that can lead to serious legal repercussions. From understanding the basics of FMLA and the ADA, to the specific state laws related to employee leaves and understanding wage and hour issues when contacting employees who are out on leave, managers who have not been trained to understand the nuances of the leave process for those they manage can cause substantial damage to an organization.
When training managers about HR best practices, make sure to point out the consequences of handling a leave of absence inappropriately, and include specific guidance around how to handle leave of absences. Another tip is to recommend participating in manager cohorts. These are similar to employee resource groups (ERGs) that provide managers with an opportunity to collaborate and share tips on what went well and what didn’t in terms of supporting their team through these emotional life experiences.
You’re already off to a great start with avoiding these pitfalls by making yourself aware. At the end of the day, knowledge is your power and the key to preventing a messy leave experience for your employee.
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ABOUT THE AUTHOR
Nicole Gouig, Director of HR at Sparrow
As People Ops Advocate Director at Sparrow, Nicole serves as a thought leader and subject matter expert to help educate the market about how to navigate and manage leave in such a way that focuses on compliance, but more intentionally, the employee experience. Prior to joining Sparrow, Nicole spent 10+ years working with SMBs in an HR consulting capacity at TriNet, a $6 billion valuation HR company. From advising the C-Level team on HR strategy to helping managers draft PIPs to helping an employee understand the leave of absence process, she’s developed a wide range of HR expertise over the years.