Corporations are expanding paid leave benefits – even more than what is currently required by law, according to the Business Group on Health's 2020 Large Employers' Leave Strategy and Transformation Survey.

Business Group polled 113 large employers and found that 39 percent of large employers expanded their paid leave benefits in 2019. More specifically, 30 percent added new types of leave, 24 percent expanded the duration of leave and 12 percent expanded eligibility of leave.

"Large employers most reported adding or making changes to parental leave and caregiver leave," the authors write. "However, employers are also looking beyond these leave types to volunteer leave, bereavement leave, military leave, mental health days, summer Fridays off and short-term disability."

For 2020, fewer employers plan to add a new type of leave, though they will continue to expand upon current offerings. Almost a quarter (23 percent) say the duration of leave available will increase, and 8 percent say they will expand eligibility for leave benefits. For 2021 and 2022, even more employers (15 percent) are considering expanding eligibility.

"The future expansion of eligibility demonstrates that employers not only understand the value of leave but are making a commitment to provide equitable benefits for all employees," the authors write.

When asked which factors most influence the design of leave benefits (other than legal requirements), company values and brand (66 percent) and market research and competition (66 percent) are the top choices for the respondents.

"Interestingly, more employers indicated that employee feedback (57 percent) influenced the design of leave benefits than senior leadership did (30 percent), potentially a sign of the growing support for leave benefits among the general population, as well as the desire among large employers to improve the employee experience," the authors write.

Eighty-two percent of the respondents say that employee health and well-being is a top reason leave benefits are important to their workforce strategy, "demonstrating employers understand time away from work and employee well-being are closely related." Compliance (67 percent) and employee engagement (46 percent) are other top reasons respondents offer leave benefits.

Regarding employer challenges related to leave and absence management, 77 percent of the respondents say that state and local paid leave laws are a top challenge, followed by employee experience with the leave process (66 percent), intermittent leave management (44 percent), lack of resources for administration (39 percent) and business continuity (37 percent).

"State and local paid leave laws have required many employers to re-examine the design and administration of their leave benefits to ensure compliance," the authors write. "These policies can create disparities across a national company's workforce and may impair the employee leave experience….How do large employers view these state and local requirements? Many are looking to a federal law that would simplify matters for multi-state employers."

When asked which elements of a federal paid family leave law would be particularly important, a uniform, nation-wide standard for compliance and reporting is the top priority (88 percent), "a strong signal that employers are feeling inundated by the requirements." Respondents' second priority is establishing a nation-wide paid leave standard (78 percent), a response in line with the importance of a preemption of state and local laws.

"Current legislation under consideration by Congress, most notably the FAMILY Act, would set a federal floor for paid family leave benefits but would not supersede state or local paid laws, not addressing large employers' major concern," the authors write. "The recent Federal Employee Paid Leave Act, signed into law in 2019, provides 12 weeks of paid parental leave for federal employees and may also serve as a model for future legislation. However, because there is no widespread agreement on amounts and funding for family and medical leave nation-wide, Congress will likely continue debating federal leave solutions in the months to come."

Regarding the structure of leave benefits, for exempt employees, 54 percent of employers provide access to a traditional leave structure, 40 percent offer PTO and 6 percent offer unlimited/permissive leave. For non-exempt employees, traditional leave structures are even more popular with 61 percent of employers offering this structure. Thirty-eight percent of employers utilize PTO and 1 percent offer unlimited/permissive leave.

"While a traditional leave structure with separate vacation and sick leave banks were used by most large employers in 2019, PTO and unlimited/permissive leave have grown in popularity over the past decade, and survey results indicate that trend will continue in 2020," the authors write.

For 2020, 18 percent of large employers are considering major changes to their current leave program by switching from one structure to another. While a few are looking closely at implementing an unlimited/permissive leave structure, more employers are looking to move from a traditional structure to PTO.

For multinationals, about one in five have established a global leave policy and another 18 percent have a philosophy in place, though many leave programs are implemented locally. Leave related to parenting (parental, maternity/paternity, adoption) is covered by more than 90 percent of global policies. Bereavement and caregiver leave are less likely to be included. Two-thirds of global employers calculate leave using a global minimum standard and 28 percent offer a stacked benefit in which the same amount of leave is added onto the statutory requirement.

"Large employers with global locations must navigate significant challenges in order to establish a program with globally consistent principles that can be adapted to local cultural norms, while complying with varying country-specific legislation," the authors write. "When it comes to legislative requirements, many countries are ahead of the U.S. in establishing guidelines and policies for parental leave, sick time and paid time off for vacation, to name a few."

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