Exploring the complexity of a remote employee’s work state

December 11, 2023

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Remote work has increasingly become the norm — in fact, it is at an all-time high. Between 2019 and 2021, the number of people primarily working from home tripled from 9 million to 27.6 million. For many, it was unexpected just how strongly the pandemic would impact the commuting landscape in the United States. 

Regardless of work-related circumstances, it is integral to employment law compliance that an employee is governed by the correct state’s laws. An influx of employees switching to remote and a confluence of other complex factors muddies the waters. This shift alone poses unprecedented challenges for absence management professionals. 

Consider an employee named Sofia who works remotely from her home in Wisconsin for a tech company. Sarah’s supervisor, Barbara, works from her home in California. The company operates as a remote-only organization and has no physical headquarters. What, then, is Sarah’s work state? Wisconsin? California, where Sarah’s supervisor directs her services from? Or none of the above? The answer is complicated.

Why work state matters

Each state has different laws and requirements around unemployment, payroll taxes, workers’ unemployment and other employment law issues. Each worker must comply with their applicable state laws. 

In 2004, the U.S. Department of Labor’s employment and training administration advisory system updated localization of work provisions, or principles for determining where wages should be reported when work is performed entirely in one state or in a number of different states. “Localization of work” provisions are additional provisions of states’ unemployment insurance (UI) laws. 

This was the first update since guidance for interpreting state provisions on “localization of work” was issued in 1952 — spurred by seismic employment shifts including the advent of the internet, and the September 11, 2001 terrorist attack that required temporary mass-relocation to New Jersey.

Determining an employee’s work state

In general, under state unemployment laws, workers’ wages are reported to the state where the work is performed, and the laws of that state govern. For Sarah, that would mean Wisconsin. But much of the time it is not that simple.

Though states utilize various approaches in making this determination, many use the unemployment of localization of work (ULOW) test, in which an employer answers questions about whether an employee’s service is “localized” in a specific state.

A service is “localized” within a state if it is either performed entirely within a state, or performed both within and outside the state, but services outside of the state are temporary, transitory in nature or consists of isolated transactions. If true, the employee’s service is localized in that state, and that is their governing work state. However, if the above is not applicable, a work state determination must still be made. The following questions then must be applied in this order:

– Is any part of the service performed in the state in which the company’s base of operations is sited?

If not, 

– Is any part of the service performed in the state from which the service is directed or controlled?

If not,

– Is any part of the service performed in the state in which the employee lives?

Let us utilize this test considering the opening scenario: Tech firm employee Sarah, a Wisconsin resident, and receives all her work assignments and products via internet communication from her boss, Barbara, in California. 

No,

– the company is fully remote and has no base of operations. 

No,

– no part of Sarah’s services are performed in California, the state from which the service is directed or controlled. 

Yes,

– Sarah is performing all employment duties in Wisconsin, the state she lives in. Despite her supervisor being based in California, Sarah’s work state is Wisconsin, and her employment is subject to Wisconsin law. All wages from the date she began telecommuting from Wisconsin should be reported to Wisconsin.

Important considerations

Determining an employee’s work state may not work the same way if a request for leave under the Family and Medical Leave Act (FMLA) is involved. The law has specific guidance for evaluating whether an employee’s residence officially constitutes a work site. 

Under FMLA, in the case of an employee who reports to, or receives assignments from, a different location, their personal residence is not a work site. Instead, it would be the state in which his/her assignments come from. In tech employee Sarah’s case, her work state would be that in which her boss is located — California. 

It is the employer’s responsibility to thoroughly review their processes around determining an employee’s work state and ensure its accuracy to avoid residual effects for both parties down the line. Employers should carry out a comprehensive review, particularly if none have occurred since the pandemic shifted the workplace landscape.

This content was originally published by the Disability Management Employer Coalition (DMEC) as part of the Absence Matters column.

Learn more > explore our absence management solutions.

International Day of Charity: celebrating our colleagues and community champions

September 5, 2023

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September 5 is the International Day of Charity — offering a chance for organizations to increase and enhance social responsibility around the world, and to celebrate volunteerism and philanthropic activities. Our colleagues demonstrate every day how caring counts, and we want to help their efforts go even further.

With our community champions program, we’re honored to recognize colleagues who give back to their own communities. Annually, we’ll be spotlighting colleagues who go above and beyond for their charity of choice. We’ve shared those spotlighted community champions with our global colleagues and invited them to vote on the individual they believe has demonstrated the most significant commitment and driven an impact in their community.

Please join us in celebrating four colleagues whose efforts in their own communities have made a tangible difference and whose chosen causes will receive a charitable donation from Sedgwick.

Making a difference

Modesto De la O

Modesto is the president of Foxhole, an organization that connects veterans and their families to jobs, financial support and other resources. These resources can be lifesaving, as many veterans struggle with mental health issues and suicidal thoughts as they work to reintegrate into civilian society. Modesto leads a free Brazilian jiu-jitsu class every Sunday – something he’s done for the past five years. He also provides peer-to-peer 24/7 support to veterans, hosts fundraisers throughout the year and works with potential donors. He’s involved with Foxhole because he knows firsthand the difficulties in transitioning from military service. Four of his friends and fellow veterans chose to end their own lives, and Modesto honors them by showing veterans healthy ways to cope with challenges as they transition to civilian life.

Abi Vincent

Abi volunteers at Hangar Hub Food Pantry in the U.K. every Sunday. The food pantry provides boxes of chilled, frozen and fresh food to low-income families and anyone else struggling to put food on the table for their family. The pantry also provides miscellaneous items including sanitary products, toothpaste and more. She helps by checking food inventories at the pantry, setting up boxes of food and cleaning up after the pantry closes to the public. Abi also works with local grocery stores and collects donated food a couple times a week. Abi is passionate about reducing food waste and helping her community. She has seen how the pantry makes a difference to families who are struggling and feels privileged to be able to help.

Jackie Ulichnie

Jackie began volunteering with the National Multiple Sclerosis Society 17 years ago, which provides services and programs for individuals living with multiple sclerosis to help manage the disease’s mobility challenges in everyday life. The MS Society also raises funds for research and development of new drug therapies. For Jackie, working with this organization has become a life-long passion, and she has used her PTO to volunteer at local fundraising events, including the annual 150-mile bike ride. Jackie is deeply involved in the planning of these bike rides, attending monthly meetings and collaborating with the organization’s leadership and logistic partners. She’s also there on race day as a Site Lead to make sure the event runs smoothly. Over the years of working with the National MS Society, she’s made many lifelong friends living with the disease, and they motivate her every day to do whatever she can to find a cure.

Elizabeth Demaret

Elizabeth has served on the board of directors for the Kenneth Young Center for the past four years and also helps by fundraising, donating and volunteering. The organization aims to foster healthier communities by providing family counseling, mental health support, in-home services for the elderly, substance abuse prevention and recovery programs, support for survivors of domestic violence and more. Elizabeth has a personal connection to the group’s mission. In 2004, she turned to an organization like the Kenneth Young Center as a survivor of domestic violence, where she received protection and support for herself and children. She’s been working every day since to pay that help forward.

For many years, Sedgwick has been committed to giving back and making a difference in our global communities through our corporate giving strategy. And our colleagues are doing amazing work of their own for causes they’re passionate about. To our community champions around the world, thank you for showing how caring counts.

> Learn more — read about this observance, check out our community champions program and explore opportunities for a meaningful career at Sedgwick

Sedgwick named most attractive workplace 2023 for IT positions by 01Net et Pro-Conso

August 29, 2023

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PARIS, August 29th, 2023 — Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has been recognized in France as one of the most attractive workplaces 2023 for IT positions by the media 01Net and Pro-Conso, in the insurance field.

This distinction is the result of a survey conducted by the Pro-Conso group in May 2023, covering 8,155 companies recruiting in the IT professions. Over 200,000 employee ratings were collected, evaluating their trust in each company, and their attractivity.

“At Sedgwick, we’re committed to creating a culture where colleagues can feel valued for what they bring,” said Jérôme Vernon, Sedgwick chief people officer for France. “Attract and retain the best talents means being able to support their growth and draw clear and tailor-made careers paths for them. This recognition of our attractiveness by IT professionals confirms our management approach based on proximity and trust.”

“In our business field, insurance and loss adjusting, IT is key for developing and integrating new solutions to deliver the best customer experience for our partners and policyholders. Colleagues who join us will face many exciting challenges, linked to our ambitious growth strategy to provide our customers with an ever-better service. At Sedgwick’s, team spirit, agility, transformation and innovation are part of our daily routine,” adds Olivier Meimoun, Sedgwick innovation and IT director for France.

About Sedgwick

Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. We provide a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

In France, Sedgwick counts 930 colleagues in 35 offices. The company stands out for its integrated international network, sector expertise and innovative digital solutions. It is particularly active in third-party management, property and technical risks, civil liability, marine and transport, and fine art.

For more information, visit www.sedgwick.com/fr.

Better work-life balance begins with employers

July 21, 2023

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Workplace culture has evolved beyond employees’ value lying solely in productivity; their whole selves and well-being matters, too. A sustainable work-life balance is critical to safeguarding well-being and improving the performance of workers. Now more than ever, employers hold responsibility for nurturing employee wellness to enable them to succeed at their jobs, and they must take intentional measures to make it happen.

For empl­­­oyees to be their best at work, remain in their jobs and stay healthy, they must have a balance and be able to enjoy life outside of the workplace. Meta-analysis from the International Journal of Environmental Research and Public Health has suggested a positive influence of work-life balance on organizational performance, career motivation, attendance, employee recruitment and retention. Additionally, it reduces outcomes such as psychological distress, emotional exhaustion, anxiety and depression.

A necessary investment­­­

Whether we like it or not, mental health challenges play a role in the workplace and can stem from or be worsened by job-related experiences. More than one fifth of U.S. adults, about 58 million people, live with a diagnosed mental illness, and only half of that population receive mental health services (National Institute of Mental Health). It’s no longer a shiny bonus for employers to provide mental health support. Employees are exasperated by a global health crisis and this support has turned into a business imperative across all organizational levels.

While the prevalence of mental health challenges is increasing nationwide, so too is the rate of employee attrition; more employees than ever are leaving their jobs for mental health reasons, including unsustainable workloads (Harvard Business Review). While rates of millennial and Gen Z attrition were already high in 2019 — at 34% of respondents overall — in just two years, by 2021, that rate had increased to a staggering 50%, according to a Mind Share Partners mental health report.

In response, employers are investing more in employee mental health support — from mental health training to more paid off for mental health days. Because of increased mental health training and discussion, in 2021, 47% of employees reported their manager was able to support them if they had a mental health condition or symptom (compared to 39% in 2019), according to the above-mentioned report. In addition, employees are using accommodations to a greater extent, including time for therapy appointments and extended or more frequent breaks throughout the workday.

A commitment to flexibility

After many employees experienced remote work for the first time during the pandemic, a collective reckoning changed the way we work forever. People want more autonomy and power to choose when, and how, they work best. Key to promoting a sustainable work-life balance, employers must provide flexible arrangements and establish boundaries around communication and urgency.

Working remotely (or hybrid, which means to work from home on select days) is increasingly coveted by employees, and proven to be good for both workers and business. For example, workers with flexible schedules worked longer hours but achieved more and were happier with work, according to a pre-pandemic study completed over a nine-month period (Forbes). Studies show it also increases productivity and job satisfaction.

These changes provide workers with more freedom to be present in their family’s lives, prioritize personal hobbies, participate in exercise and take care of what matters most to them. A 2022 McKinsey survey explains the extent to which American workers are embracing remote work. Of all job holders in the United States, 58% say they can work remotely at least part of the time. Not only is it common, but results show that most workers — 87% of respondents — would want to work remotely much of the week if given the choice.

Ideally, flexible work models should be a mutual partnership between employers and their employees that enable both to enjoy multiple benefits and perform at their very best.

This content was originally published by the Disability Management Employer Coalition (DMEC) as part of the Absence Matters column.

Is pickleball the latest threat to HR? Employers, the ball is in your court

July 19, 2023

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There is an underrated threat to employers today that no one is talking about: the game of pickleball. While I am joking about pickleball being a major peril, human resources professionals and organizations should pay attention to the injury reports and trends as it relates to programs that they support or offer under their wellness programs.

In 2020, AARP reported that 37.3% of all employees were over the age of fifty (50). Of that group, 15% were over the age of sixty (60). If you are a pickler (also known as a pickleball enthusiast), you’ll know that the most common group to play the game happen to be people over the age of fifty. In fact, according to UBS analysts, pickleball injuries will cost Americans nearly $400 million in 2023 alone, and that’s just healthcare costs. Between the tens of thousands of estimated emergency room visits and hundreds of thousands of outpatient visits with potential surgeries, understanding the injuries related to pickleball that may impact an employer’s workforce is critical.

More physical activity, more injuries

Whether an employer’s medical plan is self-funded or fully insured, the unexpected costs could be higher when you factor in the impact on productivity, disability costs and lost work time. The most common pickleball injuries occur on the wrist, leg or shoulder — commonly referred to as musculoskeletal (MSK) injuries. MSK injuries are consistently in the top five injury categories for employers, typically ranking either 2nd or 3rd as it relates to total claims filed.

By the numbers

Based on data from Sedgwick’s book of business between June 2022 and June 2023, there were more than 66,000 MSK injuries reported. Of those 66,000 claims, 66% of those claims (41,000) were filed by employees who are fifty (50) years or older. The average duration of an MSK injury claim was 72 days and the average cost to employers for just the disability portion was around $7,100 per claim. If we assume that 5-10% of those claims were related to pickleball injuries (based on the USB reporting) that means employers could experience between 147,000 to 295,000 lost workdays per year at a cost between $14,000,000 – $29,500,000. This doesn’t include the lost productivity issues that are associated with employees being out of work, statutory benefits such as paid family medical leave (PFML) benefits in certain states and potential time off under family and medical leave act (FMLA) and/or state leave programs. From 2022 to 2023, Muscle Skeletal injuries (including pickleball) were the third most reported claim type behind pregnancy and mental health claims.

What this means for employers

Aside from the lost work time and dollars, employers spend a lot of time and energy on wellness programs for their organization. They may offer incentives for employees to become more active at the gym or provide recreational activities to help promote well-being and potentially reduce long-term medical costs for employees. Pickleball is just one example, but this concept could apply to other activities such as basketball, weightlifting, swimming, yoga, gym memberships and the third rail of all sports in the business world, golf (deep breaths, folks).

For employers who — in an effort to reduce their overall medical expense and promote healthy habits in their workforce — provide incentives for employees that engage in healthy activities, they may find that they are increasing medical plan costs, especially as the workforce ages. Does this mean that employers should avoid these types of incentives? Absolutely not. It simply means that they need to thoroughly review their wellness programs to ensure a holistic approach.

Return to work and accommodation programs are often not included in a wellness offering. This introduces an opportunity for employers to change the narrative. Essentially, if you offer an incentive and the employee can no longer physically participate, you must have other reasonable methods for them to earn the incentive.

  • First, employers should consider if their return to work programs are aligned with non-occupational injuries. This can be handled internally or more often in conjunction with an employer’s disability carrier if they provide short- or long-term disability benefits for their employees.
  • Second, ensure that if an employee is injured while participating in a wellness program incentive that they are still eligible for said incentive under the reasonable standards provisions per the Equal Employment Opportunity Commission (EEOC).

Offering competitive benefits such as wellness incentives are popular amongst employers and are seen as the right thing to do. Equally important is making sure that these programs account for an aging population. To win the game, employers need to create and continue to develop a holistic approach to wellness for their organization. With that…”Pickle!”

Reimagining the future of training

July 14, 2023

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People are the greatest asset to any organization. When it comes to supporting employees, companies must work toward creating and enhancing effective training programs. Employers are encouraged to rise to the challenge, but are often faced with obstacles.

3 pain points employers face when developing employee training programs

Not enough time for training: Production work is crucial and often pushes personal and professional development off into an unknown future date that seems to fall off the calendar. The development of non-technical skills consequently becomes an afterthought. After initial onboarding, leaders should be empowered to take time for their own development and encourage their direct reports to do the same.

Leaders are not equipped, empowered or encouraged to coach direct reports: It’s no secret that the quality of an employee’s experience lies heavily with their direct manager. When leaders have the skills to guide for growth, training and other support is more readily accessible. From the hiring phase to coaching and feedback throughout the year, managers must make an effort to connect on a social learning level with other leaders to share best practices, network and find shared solutions.

Lack of consistency: When one approach to training feels different than another, objectives aren’t as clear for employees. Each portion of the training program should be delivered in a way that’s digestible, use the same platform throughout and provide space for questions. Building a team of instructional designers and strategists focused on the growth and leadership of that particular business unit is another way to improve the experience. These efforts create a consistent and holistic approach to corporate onboarding, annual compliance and leadership development.

Striving for engagement, productivity and connection

To elevate employees’ knowledge, skills and abilities requires a thoughtful strategy. Studies show that organizations that implement successful training programs have happier, more engaged and more productive employees.

Learn more — listen to the podcast about continuing education.

Sedgwick named to Newsweek’s America’s Greatest Workplaces 2023

July 5, 2023

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MEMPHIS, Tenn., July 5, 2023 – Sedgwick, a leading global provider of technology-enabled risk, benefits and integrated business solutions, has been recognized as one of America’s Greatest Workplaces 2023 by Newsweek and Plant-A Insights Group.

The award recognizes workplaces for the America’s Greatest Workplaces in the United States, by conducting a large-scale employer study based on over 389,000 company reviews.

“At Sedgwick, we’re committed to delivering a world-class colleague experience with a focus on wellbeing, connection and growth,” said Sedgwick’s Michelle Hay, global chief people officer. “Our goal is to attract and retain the very best talent and our focus on caring for our colleagues and customers creates a culture where meaningful work, work-life balance and career growth are prioritized. Sedgwick has a long history of commitment to diversity, equity and inclusion for our clients and one another.”

Participants ranked companies they either work for or are familiar with on categories including corporate culture; work-life balance; training and career progression; compensation and benefits; and proactive management of a diverse workforce.

“How do you find a great workplace—one that treats employees respectfully, pays them fairly, provides training and advancement opportunities, and supports a healthy work-life balance? Newsweek and market-data research firm Plant-A Insights are proud to introduce “America’s Greatest Workplaces 2023,” highlighting companies that are committed to offering a positive working environment,” said Nancy Cooper, Newsweek’s global editor-in-chief.

This is the fifth time Sedgwick has appeared on Newsweek’s ranking of America’s Greatest Workplaces 2023. The company has also been recognized as one of America’s Greatest Workplaces for Women 2023America’s Greatest Workplaces for Diversity 2023America’s Greatest Workplaces for LGBTQ+ 2023 and America’s Greatest Workplaces for Job Starters 2023.

About Sedgwick Sedgwick is a leading global provider of technology-enabled risk, benefits and integrated business solutions. We provide a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and exper­tise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

Reshaping the conversation around how employers support and accommodate employees

July 3, 2023

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The past couple of years have given rise to some significant workplace trends — a war for talent, demands for flexible work options and an increased need for mental health support. Typically, we hear about these issues from the employee perspective. In some ways, by setting boundaries regarding job-related demands, employees have put the ball back into employers’ courts — reshaping the conversation from what they have to do to support their employees to what they should be doing. Employers are listening and working to confront a consequential culture shift: that focusing on employee health and well-being develops an organization’s workforce and drives stronger performance.

Offering flexibility

There is increasing recognition among employers and employees of the need for greater work-life balance. Consequently, there is a rising demand for work flexibility. Flexible work arrangements allow employees to have some control over when, where and how they work. Providing the option to work remotely instills a feeling of employee autonomy, empowerment and a sense that they can be trusted to dictate which assignments they should complete in the office versus which tasks they can take care of from home.

This trend of hybrid/remote work won’t be disappearing any time soon — already, nearly 60% of employed respondents to a recent McKinsey American Opportunity survey said they have the option to work from home at least part of the week. About 90% said they would accept a flexible work option, if offered.

There are several creative solutions employers can put in place to offer more flexibility. Alternatives to the rigid 9-to-5 standard may include compressed scheduling options (like a four-day work week) and allowing employees to adjust their hours to accommodate life events without needing to use paid time off (PTO). For hourly or shift workers, employers can offer flexibility by adjusting shift start and stop times or implementing self-scheduling.

Instilling purpose

Connection and belonging are critical to well-being and happiness — and that goes for the workplace, too. Employees increasingly want to feel that their work contributes to a greater good. It enhances employees’ motivation and engagement, and research has demonstrated that purpose-driven work is good for both employee health and financial performance. A study published by Harvard Business Review found that employers with a clearly articulated purpose that’s widely understood by the workforce experiences better growth than organizations that hadn’t developed or leveraged their purpose, in addition to benefiting from greater global expansion and more product launches.

To that end, employers are looking to distill a company-wide understanding of their organizational mission through consistent messaging, prioritizing culture-building and creating an environment where employees feel a part of something larger than themselves. One effective way to do this is to embed diversity, equity and inclusion (DEI) into workplace practices to foster connection and belonging. Emphasizing environmental, social and governance (ESG) efforts can also demonstrate an organization’s commitment to responsible corporate citizenship.

Providing mental health support

Regarding mental health, it’s no secret that many people are struggling. And in part because humans are hardwired for connection, the pandemic made circumstances significantly worse. Even pre-pandemic, there was a growing effort to support employee mental health and well-being through employee assistance programs (EAPs) and behavioral health coverage in their benefit plans. However, with work being reported as people’s No. 1 source of stress in a 2023 report from Calm, employers are now asking themselves: Is this enough?

Typically, employees used to assume responsibility for caring for their own mental health and well-being outside of work. But with so many people now working remotely, the line between work and home life is blurred, and visible clues of employee distress are harder to detect. This is causing the pendulum to swing away from the resilience model and over to employers to take care of people. In response, employers look to indicators like absenteeism and productivity to gauge stress levels, but they still may not understand how their employees are really doing.

Quarterly performance reviews are no longer enough; leaders must invest more time in connecting with their teams. Managers should schedule weekly meetings with their individual team members and make a concerted effort to focus on the employee in a holistic sense, not solely on their work stats. Normalizing mental health and wellness should start at the highest levels of organization, by leaders modeling healthy attitudes and openly sharing aspects of their lives. Some employers are partnering with behavioral health specialists to develop and implement interactive training programs that normalize mental health and cultivate empathy and vulnerability.

Adopting a healthier approach to management

How managers lead matters. The stakes of leadership have always been high, but they may be higher than ever when it comes to employee well-being, according to a recent study that included 3,400 people across 10 countries. Data suggests that for 69% of people, their managers had the greatest impact on their mental health — more than their doctor or therapist — and on par with the impact of their life partner.

Employers are encouraging managers to foster connection and collaboration among their teams. This could mean working together one day a week or hosting group volunteer outings. Setting up Slack channels for non-work banter, enforcing an on-camera work call policy and coordinating virtual coffee dates or “office hours” with managers can all help in bringing together remote and hybrid teams.

Taking a stronger stance on professional development can also enhance employee well-being, aid in attracting and retaining talent, and support organizational goals. In a recent report, 52% of employees cited lack of growth or advancement opportunities as a major cause of workplace stress. Employers are responding with program offerings such as tuition assistance or reimbursement programs, mentorship programs, corporate universities and continuing education classes to support credentialing, reskilling and upskilling.

The workplace landscape looks vastly different than it did a few years ago. To be competitive and perform at their best, employers must shift how they manage their people, focusing on the minds and hearts of their employees. Adopting a people-first mentality can enable employees to thrive in and outside the job — and position employers for overall success.

> Learn more — check out an expanded version of this article in Sedgwick’s digital magazine, edge, issue 21.

DEI’s impact on leave

June 22, 2023

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By now, most organizations recognize that embracing diversity, equity, and inclusion (DEI) in the workplace is the right thing to do. It helps employees feel welcomed, valued, respected and heard; provides fair access to resources, opportunities and advancement; and makes good business sense. Beyond the unmistakable perks of committing to DEI lies an interconnected discussion around company benefits, including floating holidays/leaves, paid time off and paid parental leaves, remote work, and flexible work schedules.

Breaking down the term DEI can help us better understand the importance these initiatives hold in the workplace — and how to navigate the compliance and coverage concerns that may arise.

Defining D, E, I

  • Diversity refers to the presence of differences such as differing abilities, gender, gender identity, race/ethnicity, veteran status– just to name a few! It’s also essential to consider diverse thoughts, skills, and experiences. An organization can create and maintain a diverse workforce by recruiting, retaining, developing, and engaging employees from various backgrounds.
  • Equity is both an approach and a process that ensures everyone has access to opportunities — that all people can grow, contribute, and develop. The process begins by acknowledging that advantages and barriers do exist, and consequently, everyone does not start from the same place. Equity then works to address any systemic imbalances. As opposed to equality, where everyone gets the same thing, equity means everyone gets what they need for fair access — thus leveling the playing field.
  • Inclusion is a necessary ingredient that refers to the intentional, ongoing effort of making sure diverse individuals, all individuals, are valued, respected, and welcomed members in a community. In the workplace, inclusion efforts can help ensure that people with different identities can fully participate in the organization.

Committing to DEI strategies and initiatives can increase employee engagement, drive innovation, and encourage growth. Companies reap the benefits when they welcome a wider range of skills and talent and create an environment where employees can thrive. A range of employee benefits go hand-in-hand with DEI, including floating holidays/leaves, paid time off and paid parental leaves, remote work and flexible work schedules.

Some potential challenges to successful DEI strategy development and execution include lack of senior leadership buy-in, resistance in the organization, a lack of trust among employees and a perception that the DEI efforts are simply trying to “check a box.”

State law compliance challenges

Utilizing appropriate gender designations has proven to be challenging and varies by state. New York, for example, created a new legal gender designation. New Yorkers have the option to choose “X” as a gender marker on their driver license, learner permit or non-driver ID card. This change is being implemented in accordance with the state’s Gender Recognition Act, which went into effect on June 24, 2022. This landmark legislation provides expanded protections for transgender and non-binary New Yorkers through this change at the DMV and by making it easier for people to change their names, sex designation and birth certificates to reflect their identity. Regardless of the laws in the state, it is important to treat all of your employees with respect. In fact, Title VII of the Civil Rights Act includes gender identity under sex discrimination as a protected class. Consult with your legal counsel to ensure you are meeting the requirements under federal law, as well as any other state requirement for all potential categories of discrimination.

While pregnancy is not considered a disability under the Americans with Disabilities Act (ADA), many state laws require employers to interactively dialogue with pregnant employees seeking an accommodation. However, reviewing accommodation requests from all pregnant employees makes an employer’s administration easier because leave administrators will not need to spin the roulette of “does this employees’ state require accommodations?” Doing so sends a message to employees throughout the company that all pregnant employees are valued — leading to stronger morale (and perhaps increased retention).

Fortunately, on June 27, 2023, as the Pregnant Workers Fairness Act (PWFA) will go into effect — requiring employers to provide reasonable accommodations to all pregnant employees regardless of their work state. However, working to provide reasonable accommodations now will help employers prepare for the law and ensure compliance on and after June 27.

Inclusivity through “blood and affinity” relationships

States like Washington, New Jersey, Connecticut, California, Oregon, and Colorado have added a “blood and affinity”-like relationship to their comprehensive paid or state leave — which generally means any person with whom the employee has a significant personal bond that is or is like a family relationship, regardless of biological or legal relationship. What makes this complex is that each state has its own definition of “blood and affinity” that must apply to an individual’s situation in order to be granted comprehensive paid or state leave in that particular state.

However, employers must remain apprised of different state requirements. For example, Washington State’s Paid Family and Medical Leave (PFML) states that blood and affinity means, “any individual who regularly resides in the employee’s home or where the relationship creates an expectation that the employee care for the person, and that individual depends on the employee for care. Family member includes any individual who regularly resides in the employee’s home, except that it does not include an individual who simply resides in the same home with no expectation that the employee care for the individual.”

This definition is vastly different than the one provided by New Jersey Family Leave Insurance (FLI), which states that in addition to any individual related by blood to the employee, “any other individual that the employee shows to have a close association with the employee which is equivalent of a family relationship,” also constitutes a “blood and affinity”-relationship.

A multidimensional approach

DEI values play a role in company benefits programs, leave policies and more. To ensure that all employees feel welcomed, valued, respected and heard, and have fair access to resources, opportunities and advancement requires companies to dig deep. To keep up with recent regulations. And to continue to evaluate and evolve their DEI strategies and practices.

Managing employee absenteeism: the importance of prioritising employee well-being and the cost of ignoring it

June 14, 2023

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Last year, Sedgwick acquired Direct Health Solutions (DHS), a leading specialist provider of employer-based telehealth solutions in Australia. In this blog, we are joined by Karen Samuel, acting general manager, DHS who weighs in on the importance of prioritising employee well-being and the cost of ignoring it.

In light of the recent pandemic and increased emphasis on employee well-being and mental health in the workplace, there has been a shift in the way companies manage employee absenteeism. With the rise in popularity of remote and hybrid work environments, telehealth services have emerged as a critical tool to support organisations in managing absence and improving the mental and physical well-being of all employees.

Prioritising employee mental and physical well-being not only reduces an organisation’s overall absence rate — it also helps avoid the associated costs of absenteeism.

Why it matters

Managing employee absenteeism should be a priority for any company as it plays a major role in maintaining a productive organisation. Studies have shown the happier an employee is, the more likely they will be able to perform at their best both professionally and personally.

Workforce absenteeism is costing businesses billions and, left unchecked, it can have adverse impacts across a business. It can also signal wider problems, such as workplace health and safety, culture, or stress and mental health issues, to name a few.

When it comes to managing employee absenteeism, the centralisation of absence-related data, effective monitoring and tracking of issues, and the delivery of on-demand employee health support will provide human resource departments with more clarity and control over their workforce.

An employee absenteeism study

Direct Health Solutions (DHS), a Sedgwick business, is a leading specialist provider of employer-based telehealth solutions and absence and injury management programs in Australia. As one of the largest tele-triage organisations in the country, DHS averages more than 500,000 absence and injury calls per year and has a dedicated 24/7 telehealth centre driving their absence management programs.

DHS undertakes an annual employee absence management and well-being survey to provide benchmark data and key trends for employers to use when managing employee absenteeism in Australia. In the newly released 12th edition of this report, absenteeism levels were recorded from 1 January 2022 to 31 December 2022 using data provided by 132 companies across Australia who collectively employ over half a million employees. Respondents were asked to provide data based on all unplanned absenteeism, including personal leave, workers’ compensation leave and unauthorised leave, both paid and unpaid.

What the data says

According to the data collected from this survey, overall employee absenteeism increased by just over two and a half days (23%) from 2019 — employees took an average of 13.8 days’ sick leave in 2022. Of the companies who took part in the survey, 58% believed their absenteeism increased over the 12-month period.

Most common reasons for absenteeism

According to the survey results, the three most common reasons for employee absence were carer’s leave, coronavirus-related leave and non-genuine sick leave, or ‘chucking a sickie’.

Given the period in which the survey was conducted, it is no surprise to see that COVID-19 had a significant impact on employee absence. COVID led to increased periods of leave throughout 2022, as Australian’s contracted the disease, and took time away from work either while they were sick or supporting family members. Some organisations had an absence rate at 20% or higher during COVID’s peak in January 2022. Overall, 80% of employers indicated that COVID-19 led to increased absences in 2022.

In addition, public health initiatives led to increased awareness of staying home when sick to stop the spread. This could lead to employees being more likely to take a day off for genuine short-term illnesses such as colds, flus, and infections.

The high number of COVID-related absences, combined with the increased public health awareness, also drives an increase in the amount of carer’s leave taken, an assumption being employees may have taken carer’s leave to care for a family member suffering from COVID-19, or alternatively schools and day-care centres are insisting that sick kids remain home when unwell. This further drives an increase in carer’s leave in 2022.

Non-genuine sick leave was reported by 43% of employers as having increased in 2022. True non-genuine leave is primarily driven by low motivation in the employee and may be increased by low resilience and poor coping and planning skills in the employee. If managers can find out the underlying cause for the time off, or the factors that are leading to low motivation, they are in a good position to support employees and improve the attendance.

Mental health concerns are also driving an increase in personal leave. 57% of employers reported that absences due to mental health issues have increased over the last 12 months, with the top three drivers being workload, non-work factors, and personal illness. The ADP People at Work Survey found one in five Australians (21%) have taken time off in the last 12 months due to poor mental health, and this number rose to 46% for those employees who considered their workplace mentally unhealthy. The most common cause of stress cited in that report was increased responsibility since the pandemic, and longer working hours.1 The State of Workplace Mental Health in Australia Report found almost half of employees say their work is suffering due to poor mental health, and this rose to 56% when looking solely at millennials.2

The high number of employees taking sick leave is exactly why companies need to better manage their employee absenteeism and invest in employee well-being. With effective tools and management strategies in place, companies can better understand the reason behind these absences and work with employees to reduce the number of days taken, while offering guidance to improve and support the employee’s overall well-being.

Effects on productivity and profitability

Employee absenteeism is costly and becoming costlier, with the survey data revealing the average direct cost of absence per employee per annum increased from $3,395 to $4,025. The impacts of COVID-19 and the increasing cost of living have put a strain on the mental health of many Australians. 80% of companies surveyed in the 2022 absence management and employee well-being survey conducted by DHS said that COVID-19 restrictions have led to increased absences.

The data revealed that absenteeism in contact centres remains higher than for non-contact centre roles. Contact centres are often considered stressful, which can be attributed to environmental factors such as stressful phone calls, a high volume of phone calls and dealing with highly emotional and/or aggravated customers. These centres also often have higher staff turnover when compared with non-contact centres. As a result, more employees may be more inclined to take time off work to help manage their stress levels, which may be why absence rates within call centres are higher. Call centre employees may also experience less flexibility during work hours, such as flexibility around when, where and how they do their work. This restricts the employee’s ability to manage their personal and work life commitments.

For most businesses, unplanned absenteeism is costly. When an employee is repeatedly away for extended periods of time with no prior warning, their workload is shifted to their colleagues. Those employees are then at risk of becoming overworked, potentially disgruntled and stressed to a point they too need time off work — it can be quite costly depending on the roles and responsibilities of the absent employees.

Effectively managing employee absenteeism

According to the DHS 2023 absence management and well-being survey report, the three most effective methods of managing absence are:

  • Escalation to senior management
  • Return to work interviews
  • Formal trigger review points in place to review absences

These results highlight just how important it is for companies to effectively manage employee absenteeism — and the cost to them when it’s not managed effectively. By prioritising employee physical and mental health, along with well-being — especially considering the lingering effects and changes in mentality post-COVID-19 — employers can create a workplace culture that values and supports its employees.

Since acquiring DHS, Sedgwick is better equipped than ever to offer a combination of services covering any scenario where people are taking time away from work. Our clients count on us to support and improve the health and productivity of their workforce in a way that is cost-effective, efficient and compliant. With our software solutions, employers can manage compliance with complex federal and state regulations regarding leave of absence and job accommodation. We also offer a range of specialised HR services and safety software platforms in Australia. Our absence management solutions complement our developing injury management, employee productivity and workers’ compensation solutions in Australia, providing our clients — including some of the largest and most innovative corporations in the country — the added support of Sedgwick’s global resources and expertise.

This content was originally published by DHS, a Sedgwick business.

Learn more > Download a copy of our 2023 Absence management and well-being report and explore DHS solutions.