Leave programs are an important part of a company’s total benefits package. If you want to position your business as an employer of choice, it’s important to make sure its leave programs and other employee benefits are appropriate for 2021 and beyond. Exceeding compliance obligations to offer creative paid and unpaid leave options can help your company attract and retain the top talent you need to build a thriving team and successful business.
Use our guide to simplify creating a benefits package.
Employee Leave: Regulatory Requirements
At a minimum, every company needs to comply with any leave programs that are required under federal, state, or local regulations. The more states you have employees in (which can increase quite quickly with remote teams or rapidly-growing startup operations), the more complicated employment compliance can be.
Fortunately, Justworks helps customers navigate increasingly complex employment-related compliance requirements, including those related to employee leave programs like these.
Family Medical Leave
U.S. employers with 50 or more employees are covered under the federal Family Medical Leave Act (FMLA), as are public agencies and schools regardless of the number of employees they have. If your company is covered, your organization must have and follow a Family Medical Leave (FML) policy. While FML doesn’t have to be paid, many companies require or allow employees to combine FML with other leave programs (if available) that are paid.
The federal Families First Coronavirus Relief Act (FFCRA) leave provisions expired at the end of 2020, so there is currently (as of Q1 2021) no federal requirement for employers to offer special leave specific to COVID-19. That said, many situations related to COVID-19 illness are covered under other leave regulations. Employers can opt to continue offering paid time off consistent with FFCRA requirements on a voluntary basis. The Consolidated Appropriations Act of 2021 and the American Rescue Plan Act extended the employer tax credit for such leave through September of 2021.
State Programs for Paid Medical Leave
A number of states have their own FML programs that go further than federal requirements under FMLA. Some expand the definition of immediate family member beyond the parent, child, and spouse specification under FMLA. Some extend the amount of time an eligible employee can take time off from work. The National Council of State Legislatures provides a state-by-state overview to explore further.
In a few states, including California, New York, Massachusetts, and Rhode Island, there are state-operated paid leave programs that are funded through payroll taxes. These programs operate similar to unemployment compensation programs, but are instead for disability, illness, or caregiving needs rather than job loss. Payments to eligible employees are funded by the state program rather than paid out by the employer.
State Requirements for Sick or Safe Leave
Many states have mandatory sick leave requirements employers must adhere to. Some states also have safe leave programs that apply to those whose safety is at risk due to domestic violence, stalking, or sexual assault. Some sick and safe leave programs simply provide employees with job protection benefits, while others require employers to provide paid time off. XPertHR provides a helpful overview of leave laws by state. If your company offers a separate voluntary leave program (such as paid time off, sick leave, or vacation time) that meets or exceeds state requirements and can be used in covered situations, that is generally sufficient.
Jury Duty Leave
Employers are required to provide employees with time off from work to serve on jury duty. Federal law does not require employers to pay employees for jury duty, but most states do require employees to be paid when they are away from work due to jury duty. Some states even prohibit employers from scheduling employees for evening shifts when they had jury duty during the day. Check with the Department of Labor (DOL) in the states where you have employees to find out if there are any municipal requirements you must adhere to in addition to state regulations.
Leave as an ADA Reasonable Accommodation
Employers should keep in mind that time off from work may be an appropriate reasonable accommodation in some compliance situations related to the federal Americans With Disabilities Act (ADA). Every ADA circumstance should be considered on its own via an interactive process. If granting leave to an employee — one who might not otherwise be eligible— could help make it possible for that employee to do his or her job without causing an undue hardship to the employer, then time off might be an appropriate accommodation.
Design a Leave Program to Meet Employee Needs
How do your company’s leave policies compare to those we’ve laid out here? Whether you need to set up new leave policies or better manage the current leave program, the Justworks platform streamlines the process of creating and administering leave programs to make it easier for you and your employees.
It’s wise to take a strategic approach to deciding what to include in your leave and PTO policies. This important decision can impact every aspect of business operations. Employees consider the full compensation package when choosing an employer, including pay, employee benefits, leave programs, and flexibility. These factors impact not only recruiting and retention, but also employee engagement, innovation, creativity, productivity, and — ultimately — profitability.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.