5 ways to adapt your paid leave program for COVID-19 challenges

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Cracks are starting to show in paid leave programs due to the challenges posed by a global pandemic. But employers can take steps to modernize their policies for a post-COVID world.

“The pandemic will likely have a lasting impact on the future of work,” says Rich Fuerstenberg, senior partner at Mercer. “Now is the time for employers to consider changes that will not only get their organization through the pandemic, but leave them with a modernized and sustainable PTO program.”

Mercer data found that nearly half (49%) of employers are amending their sick leave programs in response to COVID-19 related absences. Some employers (11.98%) have given employees additional time off to “show employees appreciation” during the pandemic, but the vast majority (92.48%) are relying on remote work to give employees flexibility instead.

Businesses are not just changing their PTO policies to ensure compliance with the federal Families First Coronavirus Response Act, the Mercer data found. The Act, passed in March, mandated that employers need to provide two weeks of fully paid leave to employees who’ve contracted coronavirus, and two-thirds pay to those needing to take two weeks to care for a loved one, according to the Department of Labor.

“Both before the pandemic and in response to it, many states and local authorities passed their own paid sick leave mandates or expanded statutory disability and paid family leave benefits,” says Simon Camaj, Mercer’s life absence and disability and voluntary benefits practice leader. “Although this can add significant compliance hurdles for larger companies, we believe that employers can turn the burden of state regulations into an opportunity and potentially enhance the way employers and state policies work together.”

Mercer recommends these five things to consider as they reevaluate their leave programs.

Enhance coordination between employer and state/local leave policies
Many employers will need to make changes in order to incorporate the Families First Coronavirus Response Act and any state or local leave policies. This is especially important for large companies with employees in multiple states. New York, for example, requires employers to provide 5 to 14 days of paid leave, depending on the size of their workforce and annual revenue. San Francisco also passed the Public Health Emergency Leave Ordinance, which guarantees employees up to 80 hours of paid sick leave for coronavirus-related absences, if they work for a company with more than 500 employees.
Streamline the employee experience
An employee may get sick once, but they’ll be entitled leave from multiple policies, including their workplace benefits, federal mandates and state or local laws. To make the leave filing process easier, some states allow employers to participate more directly with state provided benefit delivery; check your state laws for the application process.
Revisit emergency leave
Many employers upped their own emergency leave policies to help employees cope with the pandemic — but many didn’t take into account what happens if employees get COVID-19 twice. Employers may want to consider updating their emergency leave policies to deal with a second wave of infections.
Take another look at unlimited PTO
Under accrued PTO policies, employees are racking up time off, but not using it during the pandemic. Employers who want to be flexible and allow employees to carry that time over into the next year need to physically change their PTO policy in order to allow it. Employers offering unlimited PTO don’t have to worry about any of those issues.
Reduce employer costs
Businesses are continuing to feel the economic impact of the pandemic, and it’s not likely to end soon. But employers can save money by taking stock of their paid leave policies and government requirements to find places that can be scaled back, if need be. Altering accrued leave policies, or switching to unlimited PTO, can help employers avoid excessive PTO payouts.
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