As employers look for new ways to attract new talent and retain existing employees, there’s one demographic in particular that needs a little more attention: working parents. From women who have left the workforce to care for their families, to young couples looking to start their own business, a family-friendly business culture is essential. When designing such a benefits package, employers should consider not only what will be most attractive to workers, but also what is legally required.
The movement to create more family-friendly work policies, while well-intentioned, has left a complicated and confusing patchwork of regulations for employers when crafting paid leave policies.
Frank Alvarez and Michelle LaFond, founding legal advisors of the employee leave management platform Cocoonrecently shared their views on how paid time off regulations will change and evolve as we move forward.
As industry veterans, what have been the most exciting or surprising legal or regulatory changes you’ve seen in your career?
Frank Alvarez: When I started practicing law in 1990, the Americans with Disabilities Act and the Family and Medical Leave Act were not in effect. Few states had leave laws. Paid job-protected holidays were virtually non-existent. Anything employers offered in this area was essentially completely voluntary. Thirty years later, everything has changed. Leave is an incredibly complex and time-consuming legal quagmire. The Federal FMLA and ADA are just the tip of the iceberg. There are literally hundreds of uncoordinated state and local leave laws. Some laws only provide job protection. Others just provide pay. And still others provide both job protection and compensation. And the law is totally messy. It’s so different from when I started my career.
Michelle Lafond: As a regulatory expert, the biggest change I have experienced is the shift in focus of regulators from what has happened in the past (more of an audit approach) to emerging risks, such as cyber and Environment, Social Governance (ESG). Regulators expect companies to anticipate what happens next and ensure that the focus is on identifying these risks, a mitigation plan and proper monitoring of execution. Additionally, understanding the consequences of working in a global marketplace is critically important, whether it’s capital standards or assessing the impact of pandemics. This holistic approach to the complexities of risk management is really important and evolving at a rapid pace.
What potential furlough laws or policies (state or federal) should companies prepare for now?
FA: Get ready for more paid time off that will cover a growing variety of situations. Employers are still digesting Connecticut’s new paid vacation law and Oregon’s law is coming soon. When a federal paid vacation law arrives, it will provide benefits that will need to be incorporated into existing state laws and employer leave policies. This will further complicate leave administration, especially for multi-state employers.
Essentially, we will need to combine the most favorable provisions of federal, state, and local laws, incorporate them into employer policies, and operationalize them into employee forms, communications, and absence tracking systems. No small task.
ML: I completely agree with Frank. The patchwork of federal, state and local leave laws is already incredibly complicated and will only become more complex as more states respond with laws that differ on what events are covered, the specifics of protected time, benefits, etc. Adding to the complexity of over 50 state solutions is whether states allow private insurers as part of the solution and this comes with additional discussions around design and pricing flexibility, interaction with other leaves and the possibility of tax credits.
Given all there is to follow, what do you think is the most important thing for employers to keep in mind in all of this?
Employers should keep in mind that leave compliance is paramount to a good employee leave experience. Employers are trying to figure out the best way to attract, retain and develop top diverse talent. Feeling valued and supported during important life events is a way for employers to show they care and demonstrate their commitment to employees. This can only happen with a seamless experience with a partner company that is expert in leave compliance.
Otherwise, the frustrations of not getting time off during those important personal times overshadow the employer’s best intentions. When the burden of managing (and worrying about) compliance is lifted, HR teams can focus on the job they really want to do: take care of their employees.
From what you’ve seen, what are the biggest challenges for employers when trying to integrate time off, compliance, and compensation?
FA: Exactly as Michelle said, the new frontier of time off is the employee experience. Getting employees paid quickly through state paid leave systems is a huge challenge. Think about it: what is the value of paid state or federal leave if you wait 4, 6 or 8 weeks to receive these benefits? Employees have bills to pay, families to feed. In the short to medium term, it is unrealistic to expect significant changes in government systems. Employers need innovative solutions. This is one of the things that first attracted me to Cocoon. We are making great strides and rethinking the status quo of employee compensation during furloughs. I’m super excited to know where we’re going.
What is the role of technology in respecting leave? How do you think this will change?
FA: In short, it will share knowledge and resources with employees in an incredibly scalable way. Historically, leave systems have worked from the top down, meaning employers have done what they can to track leave requirements and develop systems that would tell employees if leave was available in a situation. particular. It was slow and often imprecise and the answers were completely dependent on humans, who we know are prone to error. If employers outsourced time off to vendors, those vendors used clumsy technology that was patched into other legacy systems originally designed to handle disability claims.
In this context, leave services were generally loss leaders offered to retain more profitable services. As leave has become more complex and employees have demanded more support and involvement, the thinking around leave technology has begun to evolve. Today’s new leave management software must empower bottom-up leave administration. Employees are the new consumers of leave services. Employers are increasingly moving away from managing leave and supporting employee self-service.
Leave software now needs to integrate leave and compensation, whether compensation comes from states, insurers, or employers. It’s very different and powerful. Ultimately, this approach will improve compliance and the employee experience because a well-designed “single source of truth” can be provided to an almost unlimited number of employers and employees. We will soon see all major HRIS systems running this software through the API. It’s very exciting.
ML: Technology to ensure leave compliance across the ecosystem is crucial. This means that states and municipalities entitled to furloughs must also prioritize technology to quickly and accurately process furlough requests and be able to coordinate/integrate tech companies as part of the implementation. .