New paid leave laws introduced

June 29, 2017

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Paid family leave and paid parental leave are currently key topics for employers as they look to expand benefits for their employees. Recently, San Francisco introduced a paid parental leave ordinance and New York announced a new paid family leave benefits law. These new regulations include some elements that take effect July 1, 2017. Below is a brief summary.

San Francisco

The San Francisco paid parental leave ordinance (SF PPLO) impacts all San Francisco-based employers with more than 50 employees nationwide. For example, a company with 1,000 employees across the U.S. and 25 working in San Francisco would be required to provide benefits to their San Francisco team as of January 1, 2017. Employers with 35 or more employees are required to comply beginning July 1, 2017 and employers with 20 or more employees on January 1, 2018.

The law requires employers to provide six weeks of supplemental paid parental leave to employees working in San Francisco for the birth of a child, and the placement of a child for adoption or foster care. Employers must provide up to 45% of supplemental pay so that, when combined with California paid family leave (CA PFL) benefits, employees will receive up to 100% of their normal gross weekly wages (subject to CA PFL maximums). The leave must be completed in the first 12 months after the birth or placement of the child.

Eligibility requirements:

  • Employee commenced employment with the covered employer at least 180 days before the start of the leave
  • The employee performs at least eight hours per week of work in San Francisco for the employer
  • At least 40% of the employee’s total weekly hours for that employer are in San Francisco
  • Employee must be eligible for and receiving CA PFL for baby bonding

One way that employers can comply with (or be exempt from) the SF PPLO is by providing equivalent benefits under their existing paid parental leave policy. Employers should review their policy to be sure it satisfies the following minimum requirements of the SF PPLO:

  • Applies to all employees regardless of (for example):
    • Full-time/part-time status
    • Salaried/hourly
    • Union/non-union
    • Exempt/non-exempt
  • Provides 100% of pay up to six weeks for bonding with a newborn, an adopted child or a foster child
  • Eligibility for leave cannot be greater than 180 days of employment prior to the start of the leave
  • Applies equally to mothers and fathers
  • Applies equally to primary and secondary caregivers

Another way employers can comply with the SF PPLO is by handling it under their California Voluntary Disability/Paid Family leave plan.

The following items would need to be taken into consideration before determining if this is a viable solution:

  • Perform a feasibility study if the voluntary plan is funded with employee contributions
  • Amend the CA voluntary plan to include a separate class for SF employees that would pay 100% benefit
  • Provide written notice to all employees of plan change; including the option to opt out of voluntary plan
  • File revised plan document and employee notice to EDD for approval

If employers are not able to cover the SF PPLO obligation under their existing paid parental leave policy or CA voluntary plan, then they must create a separate policy and process to comply with the ordinance.

For more information on benefits, eligibility, supplemental payments and intermittent leave, along with frequently asked questions, please see the Paid Parental Leave Ordinance on the City and County of San Francisco website.

The benefit details and compliance requirements of new paid leave laws can be complex. If your company has questions or concerns related to the new San Francisco ordinance, please contact your Sedgwick client services director.

New York

On February 22, 2017, regulations for the New York Paid Family Leave Benefits Law (NY PFLBL) were released. After the initial comment period, a revised and updated draft amendment was published on May 24, 2017, which has just closed for further public comment. The proposed regulations can be viewed here; we will continue to update you as the amendment is finalized.

The NY PFLBL will become effective on January 1, 2018 and employees will receive benefits to:

  • Care for the serious health condition of a family member, including a spouse or domestic partner, child (biological, adopted, foster or in loco parentis), parent, grandparent and grandchild
  • Bond with a new child during the first 12 months after birth, adoption or foster care placement
  • Care for a spouse, parent or child as a result of military exigency

The weekly benefit is scheduled to gradually increase in subsequent years and is based on a percentage of New York’s statewide average weekly wage (AWW). Below are the percentages for the weekly benefit:

  • January 1, 2018: 50% of weekly wage for 8 weeks
  • January 1, 2019: 50% of weekly wage for 10 weeks
  • January 1, 2020: 60% of weekly wage for 10 weeks
  • January 1, 2021: 67% of weekly wage for 12 weeks

The benefits are designed to be fully funded by employee contributions, which will be deducted from the employees’ pay. Funding rates have been finalized and are set at 0.126% of the employee’s average weekly wage (capped at the NY state average weekly wage of $1,305.92) or $1.65 per week. Employers can begin payroll deductions as of July 1, 2017.

Full-time employees are eligible after 26 consecutive weeks of covered New York employment and part-time employees are eligible after 175 days of covered New York employment. When an employee returns to work, they must be restored to the same or a comparable position that they had prior to taking PFLBL.

Sedgwick is prepared to support customers for whom we administer statutory disability claims in New York to help them comply with the PFLBL. Pending the release of the final regulations, we recommend that employers:

  • Evaluate their employee demographics to determine whether any employees meet the eligibility criteria
  • Engage with a benefits consultant and/or legal counsel for guidance on policy/plan development including updating employee handbooks or leave material to include the PFLBL
  • Prepare their payroll functions to add another deduction for the PFLBL
  • Prepare to maintain the employees’ existing health coverage for the duration of the PFLBL

For additional information on eligibility and benefits, please see New York’s paid family leave program on the New York State website.

>  This article was originally published in the edge magazine, issue 7. Click through to read additional thought leadership from our experts.

Does your family and medical leave policy need a domestic partner re-evaluation?

September 30, 2015

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It’s that time when human resources professionals and legal counsel review employment policies for the upcoming year, and this year there are new challenges impacting family and medical leave. The U.S. Supreme Court’s decision in the Obergefell v. Hodges case is an important consideration when evaluating family and medical leave policies, specifically when determining whether or not domestic partners should be included as covered family members. Let’s look at the impact of this case so you make intentional, informed decisions about what is appropriate for your organization.

While family and medical leave policies reflect the requirements of the Family and Medical Leave Act of 1993 (FMLA) – a federal law – many organizations have expanded their programs to include domestic partners, even though they are not considered family members under FMLA. Sometimes the inclusion of domestic partners is made as a result of state laws. However, if operating in a state that does not have such legal requirements, some companies treat domestic partners as family members in their policies so employees in these relationships can have benefits equal to those employees in marriages, especially since same-sex partners did not have the right to marry under federal law until the Hodges decision in June.

Now that federal law recognizes the right for same-sex couples to marry, organizations may want to reconsider whether they want to continue covering domestic partners when not legally required by state law because doing so may result in some employees receiving two separate 12-week periods (a total of 24 weeks of leave in most cases – check the length of leave provided under state law). Here are two examples to contemplate:

  • An employee takes 12 weeks to care for a domestic partner who has a serious health condition (as allowed by state law and/or company policy). After returning to work, she develops her own serious health condition. She would be able to take an additional 12 weeks under FMLA for her own health condition. The coverage for a domestic partner as a family member may be required by state law or voluntarily provided by an employer, but FMLA does not include a domestic partner as a family member. Therefore the first leave cannot be counted against her FMLA balance. Since FMLA leave cannot be waived, she is able to use 12 weeks of leave under the state law and/or company policy, and still has 12 weeks of coverage under FMLA. She will have a total of 24 weeks of protected leave.
  • Employee takes 12 weeks to care for his own serious health condition (as allowed by FMLA/ state law). Then his domestic partner develops a serious health condition. In this scenario, he would not be able to take an additional 12 weeks, even if the state law/company policy includes domestic partner in the definition of family member. Both leaves were exhausted because FMLA ran concurrently with the state leave and/or leave provided by company. FMLA leave taken first will eliminate the “double leave” because the state/company policy leave runs concurrently.

Employers must, in addition to considering legal requirements, also determine what is suitable for their cultures and business needs. While equal right to marriage is now available, many individuals still value the committed relationship of a domestic partnership – same or opposite sex – and do not plan to get married but want access to the same benefits their married colleagues have. Additionally, employers may want their employees to have the same benefits regardless of the jurisdiction and choose to use the most generous jurisdiction as the model.

We’re experiencing a trend in which state and local employment-related laws are being passed that may vary, even slightly, from one jurisdiction to another. As a result, it is becoming increasingly difficult to have employment policies that apply in all states uniformly. A family and medical leave policy is one of many that should be evaluated to ensure that legal compliance, business needs and culture are aligned.

ADA FAQs: What you need to know

October 17, 2014

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Sedgwick recently hosted a webinar discussing Americans with Disabilities Act (ADA) and ADA Amendments Act (ADAAA) compliance, in partnership with Human Resource Executive. There was a high level of interest and employers asked many thought-provoking questions – many of which shared common themes, reminiscent of the early days of Family and Medical Leave (FML) adoption and the development of related policies and procedures. Organizations are dealing with overlapping complex employment issues; ADA/ADAAA compliance continues to be among the top concerns for human resource and risk professionals, particularly when considered alongside other disability and absence issues, including FML, or workers’ compensation requirements.

We compiled a list of the most prominent questions we answered in our webinar, as well as many of the frequently asked questions we continue to hear in the marketplace. It’s likely these may be questions you also have asked when considering your own ADA/ADAAA policies and compliance requirements. Read on and please continue the conversation by asking your own questions in the comments below or via our ADA/ADAAA inquiry form.

Q: What are our obligations under ADA/ADAAA?

The law is designed to be very employee friendly. Its goal is to keep people at work. An employer should make every effort possible – unless it truly creates a significant hardship for their business – to meet a disabled employee’s accommodation request and keep them within the work environment. In the past, prevalent thought may have been, “if we can accommodate, great, but if not, it’s no big deal.” Today, this type of thinking goes against the principles of ADA/ADAAA.

What are an employer’s obligations? The employer is entitled to pursue medical substantiation – is the disability certified and an accommodation appropriate? Then what comes next? If given a medically reasonable accommodation request, the employer is required to pursue the interactive process – engage with the employee to clearly understand the accommodation needed, look for potential options and consider parameters, and monitor that the accommodation is being carried out appropriately and consistently.

Q: ­Can you expand on what constitutes a hardship to the employer? ­

Based on communication from the Equal Employment Opportunity Commission (EEOC), an employer must prove that implementing an accommodation would put them in financial hardship. For a very large employer, there are not many modifications that would be officially seen as impactful enough to incur financial risk. For a smaller employer, major modifications may be more likely to be considered a hardship. Buying a piece of equipment, for example, is not usually going to be considered something that would put an employer into financial risk. Having to redesign the workplace or something of similar significance could possibly be seen as a hardship, depending on the size of the employer.

Truly, the buzzword is “significant” – very major, negative impact must be proven to the finances of your organization for a proposed accommodation to be recognized as a hardship. Especially for larger employers, we’ve seen that this is very difficult to prove under most circumstances, but each situation must be evaluated for specific determination.

Q: How can we protect ourselves from lawsuits?

The documentation proving consistency within the interactive accommodation process is of prime importance. Through the years, loose management and inconsistent accommodation – whether based on personal bias, informal policies, lack of training or other circumstances – has led to legal action for unfair employment actions. Consider an example where an employee is accommodated with generic restrictions. However, if nobody monitors for consistency and then, perhaps after years of working under these conditions, new management comes in and says, “I won’t accommodate that anymore,” the employer would be in compliance trouble. Under the law, if an accommodation has already been made available, it sets a precedent. We see more and more employers paying out large sums of money because, even if they’ve tried to do the right thing, if it’s not well-defined, well-documented and consistency and appropriate action can’t be proven in court, they will still end up in legal trouble.

More lawsuits have brought the compliance requirements under ADA/ADAAA into focus. Litigation is most easily avoided through clear adoption of the interactive process and complete documentation around the steps of this process, from the initial request through conversations taking place, medical records retrieved for substantiation, vocational rehabilitation options investigated, what accommodations have been proposed and/or why accommodations may not be considered reasonable.

While employers should have consistency across their entire organization when it comes to the evaluation process used, this doesn’t mean that every work location will be able to make the same accommodations based on the specifics of their business unit.

Q: ­Does Sedgwick’s platform integrate workers’ comp, FML/leaves of absence, disability and ADA/ADAAA systematically when all elements are overlapping?

One of the keys to reducing risk under ADA/ADAAA is to have standard procedures in place that will trigger the need for an interactive process review. The second key is to use an information management platform to support the accommodation process. Whether or not you utilize Sedgwick’s platform, these keys are critical for ADA/ADAAA compliance.

At Sedgwick, workers’ compensation, disability, absence and ADA/ADAAA are completely integrated so employers can see all of the pieces of the puzzle within one platform. Because of our integrated platform, our clients can look to a centralized source for resources and recordkeeping, and compliance becomes a far easier thing to accomplish.

Q: ­What guidance do you offer regarding prompting conversation with an employee who appears to have a disability but has not approached the employer for an accommodation? ­

Similar to the FML arena, an employee doesn’t have to ask for ADA accommodation. If you know an employee has been impacted by a disabling condition, for example if they have been away under FML or another leave type, we encourage employers to offer language in written communication or a conversation to be sure the employee explores the ADA process. Employers should approach ADA concerns in the spirit of collaboration and think creatively to find ways to accommodate any disability.

Q: ­How long should you extend time after FML has been exhausted?

Once an employer knows there is potential for extended disability-related need upon FML exhaustion, they have a responsibility to educate their employee and explore options under ADA/ADAAA. There’s no official limit on timeframe to allow for conditions that could change; opinions vary on reasonable amount of time – and most often, compliance experts discourage setting hard limits and instead encourage evaluating each situation individually. The employer should be focused on determining whether allowing extra time will ultimately allow their employee to come back into the workplace and return to their job, while also considering whether keeping the position open longer is reasonable.

­Q: How do you suggest we handle situations where we are not able to accommodate an employee in any position after engaging in the interactive process?

If ADA/ADAAA options are explored and the employee can’t remain in the workplace and perform their essential job functions through accommodation, it becomes an employment decision. We often see employers put employees on extended leave – personal leave or another leave type – for a period of time to make sure the condition is not one that can change in the short term. Yet, there may be situations where reasonable accommodation cannot be made and an employee is terminated as the end result. Interpretation is much tighter under ADAAA than was originally intended under ADA, but ADAAA changes did not create an environment where an employee can never be terminated. Collaborate with counsel in any situation where termination of employment is considered.

Q: ­How does an employer accommodate a request for intermittent leave for flare-ups? The employee either exhausted their FML entitlement or is not eligible. ­

Because leave can be a reasonable accommodation, an employee could potentially be eligible beyond their 12 weeks of federal entitlement, and leave as an accommodation could be used on an intermittent basis. It’s important to remember, even under requirements for reasonable accommodation, an employee must still be able to perform essential job functions and productivity levels must be maintained – lowering productivity standards is not a requirement. If someone is constantly away from work and cannot maintain standards, leave as an accommodation is not allowing them to do their job as defined.

The intent of the law is not to change someone’s job duties; for example, moving someone to part-time work/changing their productivity standards is not specifically the intent of ADA/ADAAA rulings but, if available, may be a good solution based on the employer’s circumstances and is not prohibited by ADA/ADAAA.

Q: ­Does Sedgwick’s ADA/ADAAA platform include vocational or ergonomic experts that assist employers in determining potential job modifications? ­

Yes, Sedgwick uses job accommodation specialists who all have vocational rehabilitation backgrounds. When we assist clients with ADA and return-to-work solutions, our job accommodation specialists help with certification, facilitating discussions with physicians to confirm the need for an accommodation, setting expectations with employees and requesting reasonable documentation to evaluate whether they can perform their job with an accommodation. These experts can assist with workplace evaluations to help define the essential tasks of a job and determine which possible accommodations can be made.

Stress, mental health issues and workplace injuries and illnesses – a look at the impact

June 25, 2014

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The University of Illinois at Chicago (UIC) research paper on Stress in the workplace highlights the costly impact of stress and mental health issues on workplace injuries and illness, including higher risk of injury, medical treatment, lost time from work and presenteeism. We also know that mental health issues, including depression, have been found to have a much higher impact on presenteeism than other chronic illnesses.[1] Mental health disorders often have symptoms that are not readily apparent; employees may attend work, but their underlying health condition affects their ability to do the work or even distracts them from safe work behavior.

Many employers already offer health management benefits that provide employees with support for mental health and emotional well-being overall through employee benefit programs. This is partly because of other research, like that of UIC, demonstrating a strong relationship between these health issues and employee presenteeism, lost time from work, overall productivity and risk of injury/illness.

UIC researchers identified three key areas for employer initiatives. With National Post-Traumatic Stress Disorder Awareness Day approaching on June 27, we would like to build on their recommendations by offering some thoughts for additional actions employers can take – using available resources and medical/disability data – to mitigate the impact of lost productivity and presenteeism from stress and other mental health illnesses. We also encourage employers to develop initiatives that cross internal silos to share information and health intervention strategies for occupational and non-occupational injury and illness. Integration can vastly improve results in addressing this issue.

Organizational

  • Develop a broader organizational initiative to not only develop managers who are supportive of employees at work, but also to create a strong organizational culture – with C-suite leadership – that is supportive of employee health and well-being 24/7.
  • Ensure employee access to wellness and prevention offerings such as: employee assistance programs (EAP), disease management, personal financial counseling, stress management and resiliency training. Make sure managers are familiar with them and can talk to employees about using the services. For parents, services like same-day care services for sick children and flexible work schedules can be valuable stress alleviators that increase attendance as well as attention to work tasks.
  • Other stress reducers in the work environment can include offering exercise classes, group walks or walking contests and other social/community events that engage employees in building positive, friendly relationships with colleagues. Having community and shared experiences can reduce perceived stress and isolation.

Screening and supportive services for high-risk individuals

  • Use an employee health risk assessment (HRA). This self-assessment, offered to all employees, is a common employee benefits tool for identifying other individual and population risks. Many companies use employee incentives (cash, gift certificates or health premium reduction) to encourage high engagement levels.
    • HRA individual results are usually kept confidential from the employer. However, independent healthcare management vendors can be engaged to reach out to employees with health risk indicators and help guide them to intervention programs like EAP or provide referrals to mental health providers, etc.
    • HRA summary data information can be used to see the varying risks in the population as a whole; sometimes data can also be broken down by business unit or occupation. Interventions can then be designed – i.e. resiliency training for employees who are under high stress, or more visible communication on EAP resources, stress reduction techniques, crisis intervention initiatives, etc.
  • One data resource often overlooked is Family Medical Leave Act (FMLA) and short term disability (STD) frequency and cause of absence. High absence rates, especially in units that have high-stress environments, can be an important red flag. FMLA summary information can be reviewed in conjunction with summary data from HRA, STD and workers’ compensation reports to identify occupations and business unit populations where stress or depression may be a factor.
    • Integrated Benefits Institute (IBI) research in 2013 showed FMLA usage to care for a family member more than doubles the risk of an STD claim for employee disability[2] due to mental health issues within a year. It seems reasonable to think this stress could show up in other areas, as well, i.e. increased risk of presenteeism, work injury or extended disability while off work due to other health issues.
    • For many employers, FMLA intermittent leave has a high absence rate for mental health and depression, and often the reason for leave is available to the leave administrator. This is an area where referral to employee health resources can be a valuable intervention.

Managing the risk of prescription drugs that impair performance

  • Many employers have access to their prescription drug usage in summary data. Usually this data includes drug names, frequency of prescriptions and costs, as well as break-out by business locations or zip codes.
  • Use of this summary data to identify drug use in employee populations that may increase the risk of injury is a first step to understanding what risks may exist and what methods can be used to ensure all employees are safe to perform work tasks.
  • Use of the company medical director or a trusted physician consultant as an advisor to assist in this data review and in development of alternative intervention strategies is recommended. Interventions could have high impact on employees, as well as operations and safety. Incorporating legal and human resources into this process is also highly recommended.

Many employers are realizing that mental health and emotional well-being can greatly impact overall health issues, employee presenteeism, lost time from work, overall productivity and risk of injury/illness. Is this a growing concern for your organization too? I look forward to hearing your perspective.

Denise Fleury, SVP, Disability and Absence Management

Read more in our “stress in the workplace” series: part 1part 2


[1] IBI Chronic Disease Profile, Depression, IBI, 2013 [2] “Early Warnings: Using FMLA to Understand and Manage Disability Absence,” IBI, 2013

Is a California Voluntary Plan right for you?

March 14, 2014

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Did you know that California is one of only five states in the nation – along with Hawaii, New Jersey, New York and Rhode Island – with a mandatory disability insurance program? In California, the State Disability Insurance (SDI) “State Plan” is funded by employee contributions and protects California workers against wage loss due to a non-industrial injury or illness. If you have employees working in California, there is an alternative to SDI you might find very interesting.

The California Unemployment Insurance Code allows an employer to establish a substitute disability program called a “Voluntary Plan.” The coverage, rights and benefits under this Voluntary Plan must be equal to what is provided by SDI and it must also be better than SDI in at least one respect. A majority of employees eligible for coverage must approve the plan going into effect. Once a Voluntary Plan is approved, the employer is no longer required to send employee contributions to the state for those employees who selected coverage under the Voluntary Plan. Instead, the employer can withhold up to the same amount of contributions from these employees and hold the money in trust to pay Voluntary Plan claims and approved expenses.

One of the benefits of establishing a Voluntary Plan is the potential for an employer to provide better coverage to employees without any additional cost. When an employer’s work force has low claim frequency, the surplus contributions (the difference between what is withheld from employees and what is needed to pay the claims and expenses) can be used to provide a higher level of benefit or to underwrite a lower contribution rate from the covered employees. An employer who is already providing some form of salary continuation can integrate those benefits with the higher Voluntary Plan benefits to greatly enhance their employees’ total benefit package.

Obviously, your employees’ claim experience is a critical factor in determining if a Voluntary Plan can support an enhanced benefit. The number of covered employees also has an important bearing. Although there is no upper or lower limit on the number of employees who can participate in a Voluntary Plan, the greater the number of employees, the more likely it is that the plan will be financially sound. A caution to any employer considering a Voluntary Plan is that the employer is ultimately responsible for plan expenses. The state rate of contributions can be withheld from employees, but if that is not adequate, the employer must loan or contribute funds as necessary to meet plan expenses

Hundreds of California employers have implemented a successful, fully employee-funded Voluntary Plan that provides better benefits to their employees – and Sedgwick can help with a Voluntary Plan for you. If you have questions, please let me know or feel free to share your thoughts here on the blog.