As an HR Consultant, I interact with thousands of HR professionals every year through the continuing education programs I teach and with the clients I consult with on HR issues. One thing is for sure—we have an FMLA abuse problem that is getting worse every year. And, what is scary is that it’s quite possible the abuse problem could get much worse in 2017 if the FMLA is expanded to be a paid leave.
Back in 2008, the World at Work organization conducted a study titled The FMLA Practices and Perspectives Survey in which they showcased the challenges that employers have been facing in managing FMLA. Below are four of the key issues discussed in the survey:
Suspected employee abuse is the No. 1 complaint about intermittent FMLA leave among total rewards professionals.
49% of intermittent FMLA absences are scheduled, but most intermittent leave users, 81%, are providing no more than a 24-hour notice, and over half give notice the day of the absence or later.
The need to track intermittent FMLA absences in order to comply with various provisions remains a considerable challenge for participating organizations.
Cancer treatments, elder-/child-care issues and migraines are the most common “serious health conditions” requiring use of intermittent FMLA leave.
As I think back on my HR career—prior to when the FMLA was enacted in 1993—I can tell you that no one back then predicted the administrative burden and costs that this statute was going to create. Additionally, our lawmakers absolutely did not understand the unintended consequences of the intermittent leave component, which has now led to rampant abuse. Today, it isn’t uncommon for employees to “call in FMLA” in small increments, such as 15 minutes, to avoid disciplinary action in being late for work. And, they “call in FMLA” right at the start of their shifts—leaving employers little time to fill holes in work schedules. In many cases, the last minute call-ins put a burden on other employees, when they have to pick up the slack. Moreover, the additional costs for lost productivity and overtime wages associated with this type of abuse have continued to climb. So, now that there is potential for an expansion of the FMLA to make the leave paid—I felt it was critical to talk about it.
Now, I’m not here to talk politics, as we have plenty of that these days. However, I am here to talk policies, and provide some insight into what it could look like for us in HR in 2017 and beyond. Below I have outlined each of the presidential candidate’s positions on paid leave, as reported in the Washington Post:
Last week, Republican presidential nominee Donald Trump announced a plan for six weeks of paid maternity leave for new mothers whose employers do not guarantee paid leave, offered through unemployment insurance. Trump’s plan came after Democratic rival Hillary Clinton’s proposal to ensure that employees taking up to 12 weeks of leave through the Family and Medical Leave Act (FMLA) would receive at least two-thirds of their wages (up to a ceiling). The policies differ in many ways. For instance, Trump’s plan covers women after childbirth; Clinton’s calls for equal coverage for women and men, whether they become parents through pregnancy, surrogacy, or adoption.
In looking further into the Clinton plan to expand the FMLA, the following was listed on her presidential candidacy Website:
As president, Hillary will:
Guarantee up to 12 weeks of paid family and medical leave to care for a new child or a seriously ill family member, and up to 12 weeks of medical leave to recover from a serious illness or injury of their own.
Ensure hardworking Americans get at least two-thirds of their current wages, up to a ceiling, while on leave.
Impose no additional costs on businesses, including small businesses.
If we analyze both the Trump plan and the Clinton plan, what stands out to me is the Clinton plan is expanding the already-abuse ridden FMLA, by making it a 2/3 paid leave. Under the Trump plan, he proposes to pay for the paid leave through unemployment insurance and specifically through cleaning up abuses in the unemployment arena, of which there are many. However, Trump’s plan does not in any way expand The Family & Medical Leave Act.
Because Mrs. Clinton is positioning her expansion plan of FMLA as being good for working mothers who are giving birth—and need paid time off—it makes people think, “Oh, that’s a good thing. Moms need a break…” However, most people do not know how to read between the lines on what this expansion of the FMLA could mean for businesses–because most people don’t work in HR like we do. The Family and Medical Leave Act allows for employees to take time off not only for pregnancy, but time off to care for a “seriously ill” immediate family member.
So, this is not just about maternity leave—but rather an expansion of the ENTIRE Family & Medical Leave Act! Think about that for just a moment… Today, we have employees who are gaming the system with taking time off under FMLA—when the time off is unpaid. Can you imagine what the abuse will look like if employees can get paid FMLA???
Mrs. Clinton has proposed that this will impose no additional costs on businesses. However, she has not been specific in how she will pay for this, other than to say she will tax the wealthiest Americans. Regardless of how she intends to fund the 2/3-paid FMLA, it still will not help businesses to replace the lost productivity from excessive employee absences. Moreover, it will not help businesses cover the increased costs in overtime expenses in having to cover for employees who are out, the increases in costs for recruiting to increase employee head counts to account for more employees who elect to take the paid FMLA. And, it certainly won’t cover the costs employers will incur in having to conduct internal investigations into abuse and fraud. I anticipate HR will incur an even bigger workload in having to investigate allegations of FMLA abuse and fraud, because now employees have a financial incentive to take time off from work. We already see how employees can abuse workers’ compensation when they have a 2/3 payment of wages, so I anticipate that the paid FMLA would generate the same type of abuse and fraud.
Another aspect that is concerning is that the Clinton plan does not give specifics on delineating between the intermittent leave taken in small increments vs. leave taken in blocks of time, such as maternity leave. So, what sends chills down my spine is the potential for intermittent leave abuse (the Friday-Monday migraines…) to get much, much worse. Imagine this: now employees with a documented WH-380 from their doctor will not only be off from work—but potentially off with pay. The financial incentive will definitely drive even more abuse.
Here is something else to think about: demographics. In 1990 the U.S. workforce had 11.6 million foreign born workers. In 2014, the U.S. workforce had 25.7 million foreign born workers. This is a 121.5% increase in just 24 years. In South Florida where my business is based, many of my clients have employees who are not originally from the U.S. So, their families are still “back home” in countries such as Brazil, Mexico, Guatemala, Columbia, etc. Today, many of these employees already take large blocks of time off under FMLA when they have a “need to care for” scenario with an ill parent or immediate family member. The time employees take off for leave generally is much longer, simply because of the time it takes for them to travel to and from their home country. I anticipate with the increases in more foreign-born workers in the U.S. workforce, that we will see increases in the requests to take FMLA to go “back home” for need-to-care-for scenarios. With the FMLA 2/3 paid—employers may very well see employees trying to take the full 12 weeks of time, in order to maximize their time back home. Even with only getting paid 2/3 of their wages, many employees may feel that’s a good trade off to spend time with their families back in their home country. With an increasing number of employees in the U.S. workforce who are not from the U.S. originally—and with that number increasing each year—we are going to see more employees taking time off under FMLA, especially if the FMLA is going to be available to them as paid time off. So, employers with a greater percentage of employees with national origins other than the U.S., the productivity impact could be far more substantial than for employers that do not have the level of national origin diversity.
Now, I want to go back to the issue of FMLA abuse and fraud again. When employees take time off from work—and coworkers or supervisors feel the time off isn’t legitimate—those coworkers or supervisors tend to start doing their own snooping expeditions on social media… The real frustration sets in when pictures start showing up on Face Book of the employees on FMLA who look like they’re on a vacation enjoying cocktails vs. “caring for” a family member.
So, what should HR professionals be doing—now–to prepare for this potential scary expansion to paid FMLA?
Begin some dialogue with senior leaders within the organization to help them understand the potential for a paid FMLA—and what the impacts could be
Stay tuned to the presidential election and any changes the candidates may make to their proposed plans, so you can be a conduit of information to your senior leadership
As part of preparing for the potential impacts, HR needs to be prepared for an escalation in employee complaints about FMLA abuse, as it is bound to happen if FMLA becomes paid leave. This may mean increasing headcount in HR or identifying resources outside the organization to help in investigating FMLA abuse.
Perform an analysis on how FMLA is currently managed within your organization, to identify gaps. In identifying gaps, now, while the FMLA is unpaid leave—it can then shed light on what changes you may need to make to software solutions, people resources, and HR processes in the event the FMLA is expanded to be paid leave. The idea here is to be one step ahead of what may lay ahead for us next year and beyond.
I wish you all the best as we finish out fourth quarter, 2016, and I wish you a very Happy Halloween. Let us hope that the “spookiest” things we deal in the coming months will be just be the ghosts and goblins who ring our doorbells, instead of the super scary stuff that may lay ahead…
Until next time…
Natalie Ivey, MBA, SPHR, SHRM-SCP
President & CEO
Results Performance Consulting, Inc.