Is offering employees paid FMLA right for your organization?

Until now, the answer for most employers was no. But it may be time to reconsider.

Here’s why: Your state may beat you to the punch. California already requires paid FMLA, and several other state legislatures are considering similar changes to state labor laws.

Meanwhile, some insurance vendors are willing to expand their short-term disability coverage policies to include FMLA.

In some organizations, offering paid FMLA is seen as a way to spruce up the compensation and benefits package and gain a recruiting edge. Before going this route, experts recommend asking two key questions:

1. Is paid FMLA affordable?

To keep the program affordable, it’s crucial to know the cost-control mechanisms that’d be in place.
For instance, with many types of disability, paid benefits are limited to 50% to 60% of the employees’
salary and require a seven-day waiting period before payment.

Premiums depend on your firm’s FMLA use history and employees’ age and gender mix. Example: Women are 10 times more likely than men to take FMLA for the care of an elderly parent or newborn child. So insurers may charge an annual $372 premium per female employee and just $141 for males.

2. Is paid FMLA manageable?

To work things out on the administrative side, the vendor must be able to adapt your system of:

• obtaining medical certifications
• processing intermittent leave, and
•  handling requests for family-related leave (spouse, dependent child, parent or, if allowed in your firm’s FMLA policy, domestic partner).

Beating ‘em to the punch

In addition to the state proposals, there’s been a recent trend for unions to use paid FMLA as a bargaining chip. Some unionized employers are choosing to beat the unions to the punch and design a paid family or medical leave benefit on their own terms.