Benefits and Compensation, Recruiting

Leading Organizations Are Designing PFML Programs to Attract and Retain Employees

The workforce continues to face enormous challenges. Despite strong support, the United States does not yet have a federal standard of paid family medical leave (PFML) or paid family leave. Disruptions like the ongoing effects of the pandemic, the Great Resignation, increasing mental health and caregiving needs among workers, and the migration to remote work are just a few factors influencing employers’ priorities.

Today’s top organizations are leading the industry by striving to humanize employee benefits, and paid leave is now a major area of focus. Employers are evaluating regulatory processes by how they impact people, mapping programs to corporate values, incorporating proactive communication programs, and partnering with organizations that can help guide and inform the process.

In lieu of a federal mandate, states are passing or considering state-mandated PFML programs. According to a study by The Standard, 60% of employers do not feel “very well prepared” to administer their new state-mandated paid leave program, but organizations looking to better support their employees, improve retention, and recruit top talent are evaluating PFML programs. Because PFML programs are an increasingly prevalent and attractive benefit to employees, some companies are proactively implementing PFML programs in states that do not have mandatory PFML requirements or have minimal requirements.

PFML Varies State by State

While it is no easy task to stay on top of legislative updates, it can be particularly challenging for businesses navigating multiple state requirements. A recent study from jobs platform Upwork reported that 5 million people moved as a result of remote work since 2020, and another 19 million are planning a move for remote work. For employers that have out-of-state employees for the first time, limited resources or small HR teams, following a few best practices and staying organized will help them manage the ever-changing landscape and keep employees apprised of benefit changes.

  1. Appropriately designate an employee’s work state. When an employee moves to a new state, a trigger should notify the employer to identify new state-mandated programs to which the employee is now entitled.
  2. Create a guidebook for each state in which an employee from your organization works. Include current information about state paid leave requirements where employees work and applicable policies.
  3. Familiarize yourself with each state’s resources. Use HR and employee toolkits and other resources provided.
  4. Know eligibility requirements.
  5. Understand intermittent leave policies. Intermittent leave impacts internal paid leave programs such as paid bereavement leave, impacting Family and Medical Leave Act (FMLA) leave and state leave policies.
  6. Know what the required notices are.
  7. Contact a broker or PFML provider about PFML guidance, outsourcing administration, and private insurance options.

PFML Program Management Best Practices

Providing meaningful benefits that support the “whole” person at work and outside of work is becoming a more critical and sought-out component by both employers and employees. Designing the best programs requires engaging all the key decision-makers, including legal and compliance partners; HR leaders and partners; external administrative partners and vendors; company leadership; payroll partners; and diversity, equity, and inclusion (DEI) leaders. Having the conversations together from the get-go allows leadership to see the benefit’s impact on the entire value stream.

In addition, when organizations are establishing or updating their PFML programs, decision-making and program reviews should be guided by a consistent benefits value statement and align with the company’s vision, mission, and goals. Having this framework for evaluating benefits programs reinforces company culture.

Communication and policy implementation are central to humanizing employee benefits. Employers invest heavily in benefits, but if employees don’t actually understand or use the benefits, employers’ opportunity to maintain a healthy workforce, boost morale, and increase employee productivity is lost. Not to mention, the employees miss the opportunity to use benefits that could help them. Employers should therefore have an established communication process in place that gives employees easy access to current information, and managers need to be active participants in this process. Managers who understand the available benefits, clearly communicate options to employees in a consumable way, and actively listen to employees know how to identify the need for leave. They become champions for their employees and are in a position to refer an employee to HR.

While keeping employees informed and engaged through proactive communication is a crucial best practice, supporting and encouraging PFML use and applying the policy uniformly across populations are equally important. It is not unusual for companies to make policy exceptions that at the moment seem reasonable but later can be viewed as unfair or inequitable if other people and their leaves are not treated in the same manner. This is an important reason to include DEI managers at the table to consult with the HR decision-maker on policy and implementation.

Paid Leave Is a Competitive Differentiator

The pandemic-era labor market trend known as the Great Resignation remains a factor in the job market. Workers continue to quit their jobs in astounding numbers in search of better opportunities. As organizations compete to recruit, hire, and retain employees, paid leave benefits are one way for companies to differentiate themselves from competitors. Organizations implementing PFML programs are fostering a culture of care and wellness, which is humanizing in and of itself. PFML programs also build loyalty by providing a safe and flexible work environment where employees can have true work/life balance and manage personal needs without putting their careers in jeopardy.

While implementing PFML programs has its challenges, PFML has provided an opportunity for leading benefits professionals and forward-thinking organizations to showcase best practices and create meaningful results in areas that matter deeply to employers and employees. 

Samantha Reed is the Senior Statutory Business Consultant at The Standard. She has more than 15 years of experience in absence management and disability including statutory PFML.

Jessica Bolar is Product Manager at The Standard, and her primary focus is on developing new PFML offerings for numerous states and overseeing absence management, while informing ongoing management of statutory and mandatory PFML products.