Injury used to represent the bulk of employee absence managed by companies. Of course, injury leave is still important. But in recent years, the Family and Medical Leave Act (FMLA), state and even local laws have made leave the most pressing, complex — and possibly litigious — type of absence in the workplace.
The cost of complying with the FMLA is already significant. According to the Employment Policy Foundation, compliance with FMLA costs employers more than $21 billion in lost productivity, continued health benefits, and labor replacement.
But the real FMLA-related risk is that of litigation. HR.com reports the average verdict for FMLA cases related to wrongful termination is nearly $335,000. This can be a devastating amount for a small business, especially a newer enterprise investing for growth rather than immediate profitability. Almost as damaging as the direct costs of litigation are the indirect costs — diverted management time, recruitment impacts and reputational risk.
These costs will only increase as more states and localities adopt paid leave laws.
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For example, part-time and temporary workers in California will soon receive up to three paid sick days a year after a last-minute compromise passed the state legislature. At press time, Gov. Jerry Brown was getting ready to sign the bill into law. California will become the second state to offer paid sick leave for part-time and temporary workers, after Connecticut passed a similar bill in 2011. The New Jersey Assembly will consider a paid sick leave bill later this month.
On top of these state laws are city laws. In 2006, San Francisco became the first city in the country to require employers to give their employees time off. In subsequent years, the District of Columbia, Seattle, Portland, Ore., New York City and Jersey City, N.J., among others, passed their own laws.
This multiplicity of leave laws makes managing employee absence very complex, particularly for companies with operations in multiple jurisdictions.