Employers Seek Flexibility as Leave Policies Gain Momentum

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Kristen Ricaurte Knebel

Nov. 8 — Paid time off comes in many different forms: sick leave, vacation, parenting leave, family leave. Many employers are happy to provide it as a benefit; they just don’t want to be told how much they have to provide and for how long.

Paid leave proposals from state and local governments and Congress have been picking up momentum. So far, California, New Jersey and Rhode Island have paid leave laws on the books and New York will soon follow. Congress has also seen several paid leave proposals from Sens. Bernie Sanders (I-Vt.), Kelly Ayotte (R-N.H.) and Patty Murray (D-Wash.). Some big name employers including Netflix, Microsoft and Facebook have announced generous leave benefits. The issue has even entered the presidential race, with both candidates floating paid family leave proposals.

All of this has employers worried that a patchwork of laws mandating paid leave may create unnecessary complexity. This is a particular concern for large employers operating across multiple states and localities.

“This is just a huge issue for companies. We’re probably hearing more about this than just about any other issue,” James A. Klein, president of the American Benefits Council, told Bloomberg BNA. “For major employers operating in multiple jurisdictions, they need consistency.”

Allison Wils, executive director for state programs and senior director of health policy with the ERISA Industry Committee, agreed that consistency is needed. “There is definitely an issue with the patchwork effect,” she told Bloomberg BNA.

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The devil is in the details when it comes to the administration of these laws for employers. All of the potential reporting and record-keeping requirements could add up to big headaches for employers, Wils said.

Additionally, proposals on paid leave include a variety of definitions, Klein said. Some laws refer to paid leave, while others refer to family leave or sick leave. There needs to be consistency to make it easier for employers to comply, he said.

Neither Klein nor Wils support a mandated paid leave law. Klein advocates for a voluntary standard, whether it be at a state or federal level.

If there is a mandate, Wils said lawmakers should shoot for “uniformity at the highest level.”

How Do We Get There?

Calling for voluntary standards at the highest levels might be the most palatable choice for employers, but it may not be the way to get paid leave benefits to more American workers, Ellen Bravo, executive director of the advocacy group Family Values @ Work, told Bloomberg BNA.

“A voluntary program won’t get” employers to act the way a mandate would, because many don’t act unless they have to, Bravo said.

Paid leave policies have “intended consequences” that improve employee retention and make workers more productive. For small employers who can’t provide those kinds of benefits on their own, paid leave policies that provide a “social insurance pool” will help, Bravo said.

As for employers that worry that paid leave laws would hem them in, Bravo said the goal is to always create a minimum and never a maximum, so that employers can always be more generous than the law.

But the way to get a federal paid leave law is by chipping away at the paucity of those laws, Bravo said.

“The way you get there, is at the state level,” Bravo said. “We are hoping we will win a critical mass of states and it will help power a win federally.”

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at kknebel@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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