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5 Reasons to Outsource FMLA Administration

5 Reasons to Outsource FMLA Administration

The Family and Medical Leave Act (FMLA) qualifies eligible employees of covered employers for unpaid, job-protected leave for specific family and medical reasons. The complexity of these leave laws can take up valuable time and resources for a company to implement. 

Additionally, it can be challenging for a Human Resources department to manage employee leave of absence. Most states have created their own FMLA-related laws. This makes it wise for companies to consider FMLA administration outsourcing to reduce the HR department's workload.  

What is the Family and Medical Leave Act?  

The FMLA is an effort by the U.S. government to promote work-life balance by giving workers room to navigate the demands of work and family. This prioritizes the development of healthy babies, healthy families, and healthy workplaces. 

The Family and Medical Leave Act applies to: 

  • Public agencies 
  • Public and private elementary and secondary schools
  • Companies with 50 or more employees  

What Are the Provisions of the Family and Medical Leave Act?  

The FMLA entitles eligible employees to: 

Twelve workweeks of leave in 12 months for any of the following reasons: 

  • Childbirth and caring for a newborn within one year of birth 
  • If the employee is placed with a child for adoption/foster care and needs to care for the child within one year of placement 
  • To provide care for the employee's spouse, child, or parent who suffers from a serious medical condition such as a long-term disability. 
  • If the employee suffers from a severe medical condition that renders them unable to perform the essential functions of their job 
  • Qualifying exigency resulting from the employee's spouse, son, daughter, or parent being a military member on "covered active duty." 

Twenty-six workweeks of leave to be taken within 12 months to provide care to a covered servicemember suffering from a severe injury or illness. 

There's a massive difference between a Paid Sick Leave and the Family and Medical Leave Act. Paid Sick Leave is taken by an employee when required and could be for any illness like a cold or flu. However, the FMLA would only apply if the employee satisfies the above-stated conditions. The Family and Medical Leave Act differs from leave caused by Short Term Disability (STD), bereavement leave, paid parental leave, jury duty leave, and leave under the Americans with Disability Act (ADA).  

Why Outsource FMLA Administration?  

Administrative leave for the Family and Medical Leave Act comes with challenges that can be addressed with Human Resource outsourcing. The following are reasons an employer might want to consider outsourcing leave management: 

  1. Ensure employment law compliance with FMLA. Employers whose companies have limited or no in-house legal expertise should consider outsourcing to ensure adherence to all federal, state, and local leave policies. Employers can therefore avoid costly penalties for non-compliance. 
  2. Alleviate the burden on HR departments. The HR staff spends much of their time administering benefits. Delegating leave programs management relieves their responsibilities significantly and promotes productivity in their other duties. 
  3. Ensure standardization and consistency. FMLA has stipulated regulations that employers must follow when administering leaves. Companies with multiple offices across various states may face challenges following up with varied and ever-changing FMLA state provisions. A comprehensive leave administration outsourcing solution will ensure compliance at all levels of leave administration, from employee handbooks to FMLA policy documents. 
  4. Maximize return on investment. Outsourcing leave management relieves the duties of the HR department. This gives its staff ample time to deal with company-related matters, maximizing company returns. 
  5. Better coordination of employee leaves. A third-party company provides the employer with reports that entail an update on an employee's leave status. These reports can help identify patterns in employee absences so employers understand how they impact costs and productivity. 

Outsourcing leave management is a cost-effective way to manage FMLA, as it can reduce employee leave costs. Additionally, outsourcing maximizes your productivity by leaving FMLA details to a third-party company. This gives the employer confidence that they won't have problems with leave administration. Additionally, a comprehensive HR outsourcing solution like PEOs can even train business managers on properly administering benefits.  

How Should You Outsource FMLA Administration?  

If your company is struggling to find the time and adequate resources required to properly train staff on FMLA administration, HR outsourcing is needed. 

Before enlisting the services of a leave management company, it's advisable to do your research on various outsourcing solutions and the programs they have to offer. In that way, you can subscribe to a program best tailored to your company's needs.  

The ROI of Outsourcing FMLA Administration  

Outsourcing your leave management has an impressive Return on Investment (ROI). A Guardian Absence Management Study showed that 42% of employers who outsourced services to manage employee leaves reduced their overall costs. The most comprehensive form of outsourcing, Professional Employer Organizations, has an average ROI of 27.2%. 

When considering the cost of outsourcing FMLA administration, it is crucial to consider the time, resources, and potential penalties associated with managing employee leave in-house. HR departments may save time and money by outsourcing the leave process to a neutral third party. This is especially true when managing different types of leave, such as paid parental or military leave, bereavement leave, or long-term disability leave. It also allows for better coordination of employee leave requests and returns to work processes.  

Unlock the Benefits of Outsourcing Employee Leave Management 

Training managers on FMLA regulations can be a time-consuming and expensive process. Outsourcing leave management to an experienced provider can relieve the burden on HR departments and ensure that the leave process is handled every time correctly. With the right provider, employers can also enjoy a better return on their investment. 

Ultimately, employee leaves of absence are better managed by a third-party company. Outsourcing ensures the well-being of employees while fully adhering to the rapidly changing FMLA regulations. More and more organizations are beginning to see its benefits as, this way, employee absences are handled correctly every time.  

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