Five questions employers are asking about leave administration

It can be difficult to track and administer leave under the Family and Medical Leave Act of 1993 (FMLA). Comprehensive paid family and medical leave PFML programs increase the difficulty. Leave becomes even more complex when several employees need leave at the same time. For each employee, employers must:

Know when to send leave notices.
Coordinate required verifications with the employee.
Manage documentation from healthcare providers.
Meet local, state and/or federal deadlines for each leave type and many other responsibilities.

These tasks come as no surprise to some employers. Currently, 14 states and the District of Columbia have comprehensive PFML programs. Yet, as more states join this list, the burden on HR continues to increase. If you're in a state with newly passed PFML laws, how do you know where to start?

The first step to success is understanding the paid leave landscape. It's also important to know how it interacts with FMLA and other forms of leave in your state. This information is immediately important to employers in states with PFML programs. Though, all employers should pay attention. The paid-leave trend continues to sweep the nation and isn't going away anytime soon.

What is a comprehensive PFML program?

The details of each PFML program varies by state, but there are commonalities. In general, PFML programs:

Offer paid leave for family and medical reasons.
Allow paid leave to coincide with other eligible leave types.
Permit employees and/or employers to contribute to a fund.
Require pre-funding before benefits begin.
Use this fund to pay benefits on approved claims.

What can the leave process look like?

Many times, employees submit leave applications to the leave administrator. This is often to a state agency. The agency determines whether the employee is eligible for paid leave. If approved, the employer must grant leave from work for the approved time. The employee will then receive their benefit payment directly from the agency.

Most states allow employers to choose private or equivalent plans. These alternatives must be equal to, or better than, the state’s plan. Many insurance carriers introduce private/equivalent PFML options as each state's program passes.

When employers partner with an insurance carrier, the leave process differs. In these instances, the carrier typically will:

Handle leave applications.
Make benefit payments on approved claims.
Not require pre-funding from employers.

Avoiding pre-funding is often the preferred choice for employers, as it may save them and their employees money.

How is PFML different from FMLA leave?

Under FMLA, eligible employees can only use leave for the following events:

Their own serious health condition
Bonding with a new child
Care for a family member (spouse, parent, or child) with a serious health condition

This leave is unpaid in most circumstances. Though, the employee and employer can agree to the use of accrued paid time off during the leave. Additionally, the employee can apply to use short-term disability should they have it. FMLA leave also has eligibility criteria for the employer and employee. Before the employee takes leave, the employer must meet size and geographical requirements. The employee must meet service requirements related to their time at the company and hours worked. Other parameters may also apply before the employee can take leave.

Each PFML program has its own eligibility criteria. In some cases, it may mirror FMLA's. Though the current trend is for PFML programs to provide broader eligibility. Under many PFML programs, employees receive more leave than under the FMLA. Additionally, they can often use leave for more reasons than what is allowed under the FMLA. For example, PFML programs frequently cover circumstances relating to domestic or sexual violence. They also often broaden the types of relationships covered. For example, many PFML programs allow care for grandparents, siblings and other relationships.

For a quick look at the differences, view this chart.

Is it difficult for employers to administer FMLA and PFML leave?

FMLA has always been difficult for many employers to administer. Employers must be aware of the requirements to ensure they stay in compliance. The list of necessary tasks is comprehensive and includes:

Updating employee handbooks
Written policies on eligibility
Notices for leave tracking and calculations
Leave eligibility notices issued to employees
Fitness for duty notices
Verification for leave notices
Coordination with healthcare providers
Return to work policies

While this list is quite long, several other requirements may exist and can vary by employee. It’s not enough to only know what to do, but also when to do it. Each requirement generally comes with its own deadline and administrative burden, meaning employers now have increased risks for penalties due to non-compliance and missed deadlines.

Not all employers are equipped to handle these compliance obligations alone. It can be intimidating as each type of leave layers on more rules, risks and work for HR. As an example, Oregon’s PFML program allows employees to use leave after they have earned $1,000 in wages (subject to PFML premiums) regardless of how long they have worked for the employer. Therefore, employees can be eligible for job-protected paid leave soon after being hired. Unlike FMLA, where employees must reach 12 months of employment and meet hours of service requirements.

Leave communication adds another layer of complexity for employers. With FMLA only, employees coordinate all leave with the employer. With PFML programs, employees work with the state or the third-party insurer. In these instances, employees can further increase their employer's risk for error. Employees send claim documentation to both their employer and their PFML administrator: double the paperwork + double the communication + double the deadlines = double the risk/employee.

How do PFML programs affect employees?

Many employees enjoy having job protected paid leave, but they need help understanding it. It's not enough for employees to know how PFML works by itself. Employees need to know how PFML coordinates with FMLA leave (and other applicable state, local or federal leave) and the employer’s own policies. At the outset, employees should understand how much the PFML program will cost them. PFML programs often have costs for both employers and employees. Educating employees before they begin seeing deductions from their payroll is critical.

Because PFML programs have different processes than other leave, employees can get confused. Among some of the first questions employees ask:

How do I apply for leave under the PFML program?
What are my eligible benefits?
What do I need to give my employer?

As we mentioned above, PFML programs typically have notice requirements. Employees must understand where to find these notices. They must also completely understand their own deadlines, as there can be many. Employees want to know:

When to give notice to the employer.
Whether the employer notice differs from the PFML administrator's notice requirements.
How to apply for leave through their PFML administrator.
What to get from their medical provider.
How to provide information to/from their employer and others involved.
How PFML interacts with other leave types.
What other benefits they’re eligible for.

Employees often have only a cursory knowledge of when and how benefits and leave apply to them. Before implementing a PFML program, employees should be properly educated. Doing so will help make the transition into a new leave program as seamless as possible.

It may be only a matter of time before most employees in the U.S. have access to a PFML program. Whether offered at the state, local or employer level, most employers will likely eventually be impacted. It’s important to stay knowledgeable on the ever-changing leave landscape to keep your organization informed.

Learn more about how FMLA and PFML coordinate.

This blog is up to date as of November 2023 and has not been updated for changes in the law, administration or current events.