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Updating Employee Leave Practices Could Save Your Company Money

With the growing number of hybrid and remote workers, keeping up with all the regulatory complexities has become a daunting task. Recent research shows that many employers have adjusted their leave policies to better meet the demands of their staff and match corporate values, as well as keep up with industry standards. 

This has the potential to benefit workers and companies. Global Workplace Analytics reports that nearly 60% of employers believe embracing a workforce that includes hybrid and remote workers could save the company money. If those who wished to work remotely did so at least half of the time, businesses could see big reductions in their operating expenses.

By offering an attractive leave policy designed to accommodate these employees, they can draw top talent while saving money.

Managing employees’ leaves can be complicated, especially when required to comply with multiple state leave laws. However, it is doable. By addressing the most cited concerns, businesses can make their policies more efficient while remaining compliant. 

Revising Worker Leave Practices

Despite considerable efforts to ensure they stay compliant with industry standards and government regulations, many companies are finding it challenging to establish all-encompassing personal leave policies. Managing a dispersed workforce of a combination of hybrid and remote employees can make it even more difficult for HR leaders who struggle to stay up-to-date with regulations and take advantage of financial opportunities while providing employee support. 

This can put a strain on their resources and become overwhelming.

HR teams should be aware of the ever-changing workforce dynamics, and a 2023 NFP Leave Management Report from benefits consultants at NFP provides an outline suggesting the primary practices for leave policies that make sure they remain compliant.

The report recommends that employers put more effort into examining their benefits policies across the following areas.

PTO, Sick Time, and Vacation

Compared to a conventional vacation policy, a PTO (Personal Time Off) policy is more flexible and offers employees an allotment of time that they can use for sick days, personal activities, or even vacations, as outlined by their employer. With this type of plan, employees do not need to specify the reason for taking their time off, making PTOs a practical solution for companies. 

Often, employers prefer more regulation over how paid time off is used. Studies have shown, though, that people usually take less time off when they’re allowed an unlimited amount of PTO.

The best approach to forming a sick leave policy is to research the maximum state-required leave that an employer must provide and, if feasible, create a policy that meets or exceeds that amount. This ensures compliance with government regulations and also protects the interests of both employer and employee.

PTO generally begins accruing upon hiring, but some companies offer the yearly allotment as soon as the employee is hired. 

Parental Leave

Although parental leave is usually granted to the mother when a child is born, an optimal approach ensures that all parents have the same leave policy. This protects birth, adoption, and fostering parents wishing to build a close relationship with their new child. 

Establishing impartial policies that provide for all types of parental leave for all parents while adhering to federal and state regulations offers employee equality and simplifies management for employers.

Maternity

Shockingly, 42% of employers don’t coordinate their maternity leave with short-term disability plans, and a whopping 63% fail to do the same with state medical leave benefits. Generally, the state pays first, and then short-term disability covers a percentage.

By providing salary continuation, employers can supplement the existing benefits from short-term disability and/or state-provided benefits for their employees. Thereby ensuring that their staff is being completely provided for during those times. 

Family Caregiver

There has been a notable uptick in employers providing family caregiver leave to their staff over the last few years. However, over half of the companies that offer this benefit allow fewer than six weeks of paid time off.

Millions of U.S. workers care for their elderly and disabled loved ones. Enabling employees to take time as needed to attend medical appointments and care for their families grants employees the chance to manage both their work and personal life while preserving productivity on the job.

In Conclusion

Whether managing a company’s employee leave program is handled by the owner or manager, an internal HR team, or an outside benefits consultant, offering flexible leave is a popular and progressive trend. Although it might seem complex initially, it all begins with compliant and comprehensive leave policies and procedures.

There are ways for forward-thinking companies to manage the process while remaining compliant. Ultimately, it might be mutually beneficial.

Key Changes to Your 2023 Employee Handbook

As the nature of the contemporary workplace evolves, your policies must reflect the changing times. With the rise of remote work, digital tools, and new regulations, there are many key changes to consider for your 2023 employee handbook. 

An employee handbook is an essential tool for any organization. It sets out the expectations, terms, and conditions of employment while reducing potential legal risks. This document should not be overlooked if you want to ensure compliance with government regulations.

No matter how comprehensive your current employee handbook is, it can become outdated quickly due to changes in the law and the world. Therefore, employers should ensure that their handbook covers all the essential policies, as well as any new developments in their workplace. This will guarantee your employee handbook is up-to-date and compliant in 2023.

Changes in Work Time Policies

The COVID-19 pandemic has triggered a dramatic shift in workplace dynamics. No longer satisfied with the traditional 9-to-5 workday model, modern employees are increasingly opting for flexible working hours. This has made way for the emergence of remote work, hybrid work, and flexible work hours. 

To ensure the successful management of these new work structures, businesses need to implement sound policies. This would include key points, such as, but not limited to, the following:

  • Which employees are eligible
  • Attendance expectations
  • How time off and breaks are tracked
  • How overtime is compensated

Having such a policy in place ensures everyone is on the same page and enables operations to remain smooth.

Communicable Disease Policies

During the Covid 19 pandemic, many companies introduced protocols to ensure the safety and well-being of their employees. These included rules around staying home if unwell, wearing masks, getting vaccinated, maintaining social distancing, and having regular tests conducted.

Companies should reevaluate their existing policies and update them so that they are not only applicable to the Covid pandemic but any potential future communicable disease or virus. This will help ensure that businesses are well-equipped to handle such occurrences with minimal disruption.

Diversity, Equity, and Inclusion

Incorporating a Diversity, Equity, and Inclusion (DEI) mission statement in the employee handbook sends a strong statement to employees that the company is committed to DEI. If that seems too bold, consider using the word “employee” and “they/them” throughout the handbook instead of gender-specific pronouns.

Pay close attention to any company leave policies and make sure they are not exclusive. Providing additional medical benefits when an employee gives birth may lead to discrimination cases from other staff members who have medical issues unrelated to childbirth that require them to miss work. 

Offering a paid medical leave benefit regardless of the reason is not only more equitable but also provides cover for more scenarios. This should be prioritized over only providing it for childbirth-related issues.

Progressively, companies are shifting from “maternity” leave to “parental” or “caregiver” leave for bonding with a child. This type of benefit should also be available to families who adopt, use surrogacy, or foster care when growing their family- not just those who experience childbirth.

Security and Privacy Protection Policies

To ensure a safe and secure work environment, employers should regularly update their security policies and procedures for both in-office and remote workers. They should also update their social media policies to further protect confidential information and address any potential privacy concerns.

Ensure Employee Handbook Compliance

It’s no good having an employee handbook if employees don’t know what it is or how to access it. To make sure everyone knows where to find the handbook, you should have an electronic version with embedded hyperlinks for swift navigation. 

These can include links for applying for benefits, emails for contacts, and links to other related policies. Rather than relying on hardcopy employee handbooks, organizations now have the ability to keep policies up-to-date electronically. This makes it easier for them to make amendments quickly, without having to print out and distribute new versions.

It is essential to review and update employee handbooks with legal counsel every year in order to stay up to date with the ever-evolving work environment, pertinent laws and regulations, and also promote fairness and inclusivity throughout the organization. This process helps establish a strong company culture.

Employment and Benefits Law Changes in 2023

On December 31st, 2022, the Consolidated Appropriations Act of 2023 was signed into law. This is a sweeping piece of legislation that provides funding for various federal departments and agencies and includes many changes to employee benefit programs. These changes expand unemployment benefits, as well as add stimulus payments and other provisions that will affect the lives of millions of Americans.

Here are the Employment and Benefits highlights.


New Non-Compete Agreement Regulations


Although noncompete agreements have become increasingly common in the workplace, recent changes to regulations have made it more difficult for employers to enforce these agreements. The proposed regulation would deem the use of noncompete clauses in an employment contract by employers as an unfair practice in terms of competition. If the proposed rule becomes final, it would extend to paid and unpaid workers including consultants and independent contractors.

Furthermore, employers would need to notify their employees that the non-compete provisions included in their current agreements would now be unenforceable. There are still several steps that must be completed before the rule becomes binding.

Although the new regulation doesn’t explicitly address similar contractual commitments like nondisclosure agreements, they might still be considered unlawful if they produce effects similar to those of noncompetes.


Pregnant Workers Fairness Act in CAA 2023


The Pregnant Workers Fairness Act (PWFA) was designed to protect the rights of pregnant workers by requiring employers to make reasonable accommodations for pregnant workers, such as providing additional breaks or light-duty tasks.

It also provides protections (similar to those found in the Americans with Disabilities Act for disabled employees) that prohibit employers from discriminating against pregnant workers, denying them job opportunities or promotions, and requiring them to take unpaid leave. The PWFA ensures that pregnant workers have the same rights and protections as all other employees.

It works to ensure that employers reasonably accommodate employees for circumstances like “pregnancy, childbirth, and related medical conditions.”


Pump Relief for Nursing Mothers Act


This CAA 2023 provision expands on the 2019 Pump Relief for Nursing Mothers Act to ensure they have access to private and comfortable spaces in which to express breast milk during their workday. The law requires employers to provide reasonable break time and suitable private space, other than a bathroom, for nursing mothers to express milk.

This law also protects against discrimination and retaliation against nursing mothers who choose to take advantage of this benefit and extends the duration from up to one year after the child’s birth to two. The Pump Relief for Nursing Mothers Act is an important step toward creating an equitable workplace environment for all employees.

Additionally, nursing mothers are entitled to compensation for any time they spend working while expressing milk.


Telemedicine and HSA/HDHP Relief Under CAA 2023


CAA 2023 permits a short-term extension of Covid-era regulations that permit individuals to avail themselves of pre-deductible telemedicine benefits even if they are making HSA contributions.

Telemedicine has become an increasingly popular way for people to access medical care without having to leave their homes. Health Savings Accounts (HSAs) and High Deductible Health Plans (HDHPs) are becoming more popular among employers as a way to provide relief from rising healthcare costs. HSAs allow individuals to set aside pre-tax money for qualified medical expenses while HDHPs offer lower premiums in exchange for higher deductibles and out-of-pocket costs.

Telemedicine can be used in conjunction with these plans to help reduce costs associated with traditional office visits while still providing quality care. CAA 2023 temporarily eliminates the need for people to disqualify themselves from HSA contributions to receive these benefits.


Prescription Drug Reporting Relief


Prescription drug reporting relief provides financial relief for the enforcement of the system of laws and regulations that ensures individuals are receiving the right medication at the right time and in the right dosage, while also providing safeguards against fraudulent activity. CAA 2023 provided additional clarifications and flexibilities for the 2020 and 2021 calendar year reports including the removal of certain previous restrictions.

To address the confusion the new reporting requirements caused, federal agencies have asserted that group health plans using a reasonable interpretation of the rules in good faith will not be penalized for errors made in their 2020 and 2021 reports.


CAA 2023 MHPAEA Update


The CAA 2023 update to the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) to help fund state enforcement of comparative analyses requirements of nonquantitative treatment limitations (NQTLs). MHPAEA seeks to ensure that mental health and substance use disorder services are treated similarly to medical and surgical services.

The CAA 2023 MHPAEA updated this by requiring insurance companies to provide more coverage for mental health and substance use disorder services.


In Conclusion


The Consolidated Appropriations Act of 2023 has created several changes in the way employers provide benefits to their employees. This act is sure to have far-reaching implications for employers and employees alike as it affects everything from healthcare coverage to retirement options. Employers should understand how this act will impact employee benefits so that they can make informed decisions about their future.

HR Compliance Overview Regarding 2023 State Minimum Wage Rates

 The United States minimum wage has been a topic of debate for decades. As the government continues to seek a way to reduce poverty and provide a living wage for the people of America, the new minimum wage limits for 2023 are set to be announced on January 1st

Although most people have opinions regarding minimum wage increases, many are unaware of how minimum wage is set in their state.  

Fair Labor Standards Act and Minimum Wage Rates

In 1938, Franklin D. Roosevelt’s New Deal legislation created the Fair Labor Standards Act (FLSA) to set rules governing employee compensation, among other things. Basically, the FLSA governs overtime pay, child labor, and record-keeping. It also sets the federal minimum wage. This was established to create a minimum standard rate of pay for the majority of the workforce.

Over the years, the FLSA has been periodically amended to increase the minimum wage and extend coverage to more workers.

FLSA and Minimum Wage Basics

In the United States, the minimum wage is determined by individual states. Minimum wage rates vary from state to state, with some areas having a higher minimum wage than others. This is primarily to account for the cost of living discrepancies between different locations.

The federal minimum wage is $7.25 per hour and is set to increase annually with inflation. The federal law does not require states to increase their own minimum wages but most have done so to keep up with the cost of living and adequately provide for their residents.

Federal law also does not require employers to pay employees on commission or tips on top of their salary if they earn more than $30 per month in tips or commissions. Many employers, however, choose to do so voluntarily. This is done as an additional way of compensating employees who are providing good customer service or quality workmanship.

What’s New for 2023 State Minimum Wage Rates?

The minimum wage in the United States has been a topic of contention for years. This is unlikely to change. Regardless of personal opinions, however, employers are required to adhere to the regulated standards. 

The federal minimum wage is $7.25 per hour, but many states have their own minimum wage rates. As of January 1, 2023, there are 18 states with higher minimum wages than the federal rate. 

These include the following states that have announced new wage rates to begin in 2023:

  • Arizona
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Florida
  • Illinois
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Missouri
  • Montana
  • Nevada
  • New Jersey
  • New Mexico
  • New York
  • Ohio
  • Oregon
  • Rhode Island
  • South Dakota
  • Virginia
  • Washington

In situations where both the federal and state minimum wage rates apply, employers are required to pay the higher rate. Therefore, as of January 1, 2023, there will be a higher minimum wage in every state in the country.

Launchways had produced an in-depth compliance bulletin with a chart of all minimum wage requirements state-by-state. DOWNLOAD THE COMPLIANCE BULLETIN.

The 7 Steps for FMLA Compliance

When employees need to attend to their (or their family’s) medical needs, they may need to take time off from work. There are specific steps they and their employer need to follow to determine whether they will receive compensation when they aren’t working.

The Family and Medical Leave Act of 1993 (FMLA) provides unpaid, job-protected leave to eligible employees. The FMLA is a federal law that requires employers to provide up to 12 weeks of unpaid, job-protected leave per year for particular family and medical reasons.

Although the details may seem complicated, the process is fairly straightforward when both employer and employee adhere to the following steps.  

Determine Employer Obligation and Employee Eligibility

An employer has certain obligations towards their employees. They need to provide a safe and healthy work environment, pay them a wage that is at least equal to the minimum wage, provide them with meal breaks and rest periods, provide them with leave entitlements and notify them of changes to their employment terms.

Under the terms of FMLA, if they employ 50 or more employees who work within a 75-mile radius of the worksite, they are also required to offer paid leave.

With a qualifying reason, employees are eligible for these entitlements if they are employed on a full or part-time basis and have worked for the employer for at least 12 months.

Determine Whether there Is a Qualifying Reason

The next step is to determine whether the employee has a qualifying reason for requesting leave. A qualifying reason for FMLA includes when the employee is unable to work because of any of the following reasons:

  • Serious health condition
  • Employees must care for a family member with a significant health condition.
  • Qualifying exigency arising out of the military service of the employee or family member
  • Qualifying exigency arising from an employee’s spouse, child, or parent is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.

If an employer denies FMLA benefits to an eligible employee, they must provide written notice. It must include the name and address of each person or organization denying leave and the specific reasons why the leave was denied.

Notify the Employee of Eligibility for FMLA

The Family and Medical Leave Act requires employers to notify employees of their eligibility for FMLA. Employers must let employees know if they are eligible to take leave under the FMLA within five business days of receiving a request for leave, or an employee’s first day of work, whichever is later. 

Employees must also be notified if they are not eligible for FMLA within five business days of the employer’s determination.

Request Medical Certification for Paid Leave

As per the company’s policy, employees must provide a medical certification for any paid leave. The company will not process any requests for paid leave without a valid medical certificate.

When possible, medical certifications should be submitted to the HR department at least ten days before the date of leave.

Notify the Employee of FMLA Approval or Rejection

If the medical certificate is complete, they will approve or reject the request based on the provided facts. If it is incomplete or unclear, additional information may be required before they make a determination. The employee should have at least seven days to submit the requested information.

The employee will be notified of the status within five business days of submitting a completed medical certificate. If the request is approved, they will be able to take a paid leave of absence, which will be counted against the FMLA benefits to which they are entitled.

​​Responsible Employee Leave Procedures

Implementing and adhering to Responsible Employee Leave Procedures is a way to ensure that the company is not negatively affected by an employee’s absence. Responsible leave procedures might include giving the employee information on what they need to do before they leave, including who needs to know about their leave, where to find important documents and how best to communicate with people while they’re on leave. 

They may also be required to periodically call in to provide updates on their status so the company can continue to plan for their absence without additional strain to the business or other employees.

Employee Reinstatement After FMLA Leave

Since the employee should have been periodically calling in to report their status, the company should be prepared for their imminent return. Plus, the employee on leave may have been kept up-to-date on any changes made to their job while they were gone.

If the employee requested leave for their own medical condition, they would have submitted a medical certificate. In this case, before the employee is allowed to return to work, a medical release from the doctor may be required.

In some circumstances, there may be mitigating circumstances that require additional documentation. Generally, by following these steps, an employee will be able handle their or their family’s medical issue without running the risk of further financial hardship or losing their job.

What’s New for HSAs and High-Deductible Health Plan Limits?

Health savings account (HSA) contribution limits will significantly increase in 2023 and will likely continue to rise in the near future. On April 29, the IRS announced that it would drastically increase contribution limits. The announcement was made in response to the recent surge in inflation, and provides employers sponsoring high-deductible health plans (HDHPs) sufficient preparation time before the approaching open enrollment season.

With the annual inflation-adjusted limit, the maximum contribution limit for a family HSA is now $7,750, up from $7300. This is an increase of 5.5 percent from 2022’s limit, where the increase for the previous year was a mere 1.4 percent. Self-only coverage HSA contributions will increase from $3,650 to $3,850 in 2023.

The IRS verified the projected 2023 HSA contribution limits and the maximum out-of-pocket expenses and minimum deductibles for the paired HDHPs in the Revenue Procedure 2022-24.

2023 Increase Is a “Significant Jump” Over Previous Years

As more employers weigh the benefits of making income-based contributions, the number interested in matching the HSA contributions of their employees has grown. Although this practice is similar to the those used to match 401(k) retirement plans, it is particularly beneficial to lower-paid employees who might require additional help with health care expenses under high-deductible plans.

HSA Bank’s Chief revenue officer, Kevin Robertson, claims the 2023 higher limits are “a significant jump” from previous annual increases. As employer contributions generally spur employees to assign a higher value to their health care benefit packages, he believes news of the increase can be used for a few purposes. 

  • Employers can use the open enrollment season to encourage employee contributions.
  • Employers may be persuaded to contribute to HSAs where they had not previously.
  • Employees may raise their rate of contribution or begin contributing to their personal or family accounts. 

Even with small amounts, employer contributions add up and promote a more collaborative approach to the employee accounts and the perceived value of those accounts. 

Inflation Results in Contribution Limit Adjustments

Generally, October heralds announcements regarding various tax-advantaged accounts’ contribution limits for the following year. Those concerning HSAs, however, are announced in late April or May. 

Although the adjusted contribution amount is regulated by statute, the limits are adjusted annually for inflation using the Consumer Price Index for All Urban Consumers. They use data compiled from the 12 months ending on March 31 and round to the nearest $50 to arrive at the precise amount.

The Employers Council on Flexible Compensation (ECFC) represents the sponsors of various account-based benefits plans. Legislative and technical director of ECFC, William Sweetnam, explains that limit increases for HDHP and HSA are: 

“released much earlier than other employee benefit limits so that insurance companies that offer high-deductible health plans—which participants must be enrolled in to make HSA contributions—can get their insurance products approved by state insurance regulators.”

Differing Limits for ACA

Based on the Affordable Care Act (ACA), there is more than one set of health plan out-of-pocket expenses annually determined by federal agencies. This can cause considerable confusion for the administrators of the plans.

Under an ACA-compliant plan, annual cost-sharing limits for basic health benefits are established by the Department of Health and Human Services (HHS). These out-of-pocket limits are higher than the maximum limits set by the IRS. For a plan to qualify as an HSA-compatible HDHP, however, they can not exceed the out-of-pocket maximum limit of the IRS.

Regardless of whether a person is enrolled in a family or self-only plan, the ACA’s cost-sharing limits apply to every person in a non-grandfathered health plan.

Maximum Limit for Excepted-Benefit HRAs 

Additionally, Revenue Procedure 2022-24 raises the employer contribution maximum amount to an excepted-benefit health reimbursement arrangement (HRA) for year 2023. Excepted-benefit HRAs are restricted to paying only for dental and vision or comparable benefits that the employer’s primary plan doesn’t pay and are also not covered by the ACA. The HRA for 2023 is raised $150 higher from the 2022 amount of $1,800 to $1,950. 

The Announcement Allows Employers to Plan Ahead

Sweetnam claims that, since employers often discuss health care choices and limits during the open enrollment season, the limits for 2023 are “good to know.” To plan ahead, employers should consider updating payroll to mitigate the coming year’s cost-of-living adjustments and incorporate the announced HSA limits.