As companies continue to meet the expectations and needs of more demanding employees, many have questions about the increasingly complicated aspects of paid family and medical leave (PFML) plans. With 10 states requiring PFML and a number of other states primed to follow, this will likely continue.

In an effort to retain key workers and attract rising talent, many businesses are looking to these benefits to give them the competitive edge they need.

What Is PFML?

The 1993 Family Medical Leave Act (FMLA) allows workers to take up to 12 weeks of unpaid leave for specific medical and family purposes. Unfortunately, the lack of compensation can make taking that much time off difficult for many employees, even when they face medical crises or the addition of a new family member.

According to a 2017 Pew Research Center report, 40 percent of workers who took family leave said they had taken less time off than they should have. Programs like long-term and short-term disability (LTDs and STDs) generally only provide limited coverage to private employees for medical problems.

Deficiencies in paid medical leave options were made even more obvious during the COVID pandemic. As workers strive to improve their work/life balance, employers scramble to accommodate them.

Having Paid Family and Medical Leave (PFML) could help with this.

Preparing for PFML Plans

Preparing for and navigating PFML plans can be challenging. A recent study revealed that 73 percent of employers with a workforce in three or more of the most heavily-regulated states found interpreting relevant federal and state laws to be among the most difficult aspects of overseeing an absence management program.

Many companies approach these changes by seeking advice from outside consultants or by merely taking note of what similar companies do and implementing those changes. The majority of PFML plans take an integrated strategy, combining short and long-term benefits that could make other employer paid-time-off (PTO) programs irrelevant.

Steps for implementing PFML:

  • Determine the impact on your workforce
  • Inform and educate your workers
  • Consolidate management activities to ensure compliance

The exact coverage between company programs and state programs could result in troublesome income gaps for some employees. 

Companies should attempt to determine who these potential gaps may affect so they can help them take steps to avoid them. The inability of the employer’s program to cover a gap should be clearly communicated.

PFML Plans: Choosing to Use State or Private 

As a growing number of states are requiring PFML plans, employers consider whether to rely on the state plan or choose a compliant private plan. This determines who the employer pays for the program, the state, or a third party.

In states where PFML is mandated, private plans must provide the same level as the state plans with no additional cost over what the state plan would charge to the employee. To further complicate the matter, each state has its own regulations with some disallowing private plans entirely.

This makes it difficult for many employers to understand what is required to remain compliant and provide for their employees. In fact, around 60 percent of responding companies claim to require more information and assistance with choosing and administering the necessary benefit plans.

Although, as with most approaches, there are benefits to both. Research indicates that private plans are generally more flexible and user-friendly. They often provide employers with more resources.

In Conclusion

With the expansion of state leave laws, employers continue to become more conscious about managing leave. They are now investing in better leave management processes as it enables them to avoid legal risks while improving the health and productivity of their workforce, as well as their overall employee experience. In fact, nearly twice as many businesses are prioritizing leave management as a means to reduce absenteeism compared to 2014.

As companies continue to make progress, this trend will likely continue in the future.