HR Management & Compliance

Adding Up the Costs of the Family & Medical Leave Act – FMLA

A business-funded think tank has surveyed employers and concluded they “face a significant financial burden” when it comes to complying with the Family and Medical Leave Act (FMLA). Based on its survey, the Washington, D.C.-based Employment Policy Foundation (EPF) estimates that FMLA compliance cost employers $21 billion in 2004.

The direct costs included net labor replacement costs, continuation of group health benefits, and lost productivity, according to EPF. The industries “hardest hit” by the Family and Medical Leave Act were telecommunications and transportation, which paid 2.4 and 3.2 percent of their labor costs for compliance with FMLA leave, respectively. The survey found that 14.5 of employees took leave in 2004. Of those, 35 percent took it more than once during the year.

The proportion of employees with “multiple episodes” of leave is growing rapidly, according to EPF; in 2004, it was almost 50 percent higher than the proportion who took multiple episodes of leave in 2000.

“Employers face a significant financial burden in fulfilling their obligations under FMLA,” said EPF Chief Economist Janemarie Mulvey. “No one is upset about allowing employees time off for serious medical conditions, but the intermittent leave provisions are so flexible as to make FMLA subject to abuse by a small — but costly — group of employees.”

The survey results come as employer and employee groups alike push the Bush administration to amend the Family & Medical Leave Act, according to the Miami Herald.

Employers have been lobbying for two FMLA changes

The first FMLA change sought by employers would narrow the illnesses covered by the law to those requiring at least 10 days away from work. The Herald said this could have a big impact on workers, since some serious conditions — such as those requiring hernia surgery, an appendectomy, or tonsillectomy — can be treated in fewer than 10 days.

Half of all people who used FMLA between 1996 and 2000 took medical leave for fewer than 10 days, the newspaper noted.

The second FMLA change being sought by employers would set the minimum for intermittent leave at 4 hours. Workers wouldn’t be taking an hour here or there anymore, the Herald reports; they might also use up their 12 weeks of leave more quickly.

Worker group want to expand FMLA benefits

Workers’ advocates, meanwhile, want to expand FMLA to permit leave to care for a same-sex spouse, domestic partner, parental in-law, sibling, or grandparent with a serious health condition, according to the Herald.

The EPF survey found that 30 percent of FMLA leave is intermittent leave “comprising shorter periods of leave, sporadically throughout the year and without prior notice to employers.” The group notes that under current law, an employee may be absent for up to 2 days before informing his or her employer that the absence was an FMLA leave. “This has led some to suspect that some employees are using the Family & Medical Leave Act to protect against employer discipline for work missed for reasons other than serious medical conditions,” according to a summary of the survey results.

And too often, employers face the difficulty of not knowing when an employee is going to take leave, Mulvey said. “In 2004, nearly 50 percent of employees notified their employer of FMLA leave on the day the leave began or after,” she said. “In fact, 30 percent of the time, notice was not provided until at least one day after the leave began.”

While this may occur in emergencies or sudden illness, its frequency suggests that employees are not providing notice “as soon as practicable,” as required by FMLA regulations, she added.

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