Paid Family Leave Will Be the Most Disruptive Regulation Employers Will Face…

... And Why That Creates Opportunity for Employers

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By Jason Banuski

Over the past few months I’ve presented a Paid Family Leave seminar to various groups of business owners around New York to educate them about the new law and how it will impact their businesses. To say the law and the regulations around Paid Family Leave are controversial would be an understatement. I’ve had audience members yell at me, as though the whole thing were my idea. I’ve had people ask whether legislators have any idea what this will do to their workforce, tell me how it’s another burden on small business owners, etc. etc. I answer them by agreeing that they aren’t necessarily wrong… Paid Family Leave is going to be a major disruption to the way businesses operate. But maybe there’s a silver lining to it…

The connotations of disruption don’t always have to be negative. In fact, in some fields disruption is the desired outcome, particularly in fields like tech and places like Silicon Valley, where it (disruption) means questioning why things are done or organized a certain way. Disrupting our assumptions can lead us to innovate, find new ways of doing things that are more efficient, more cost-effective, or otherwise beneficial that we might not have discovered if we kept to the same practices we always have. Can the disruptions caused by Paid Family Leave have hidden benefits? I think so… for organizations that aren’t afraid of change and are willing to experiment and question assumed practices.

First off, let’s establish just how Paid Family Leave will have the potential to disrupt business operations (for a more complete picture, see our Paid Family Leave Guide). Paid Family Leave, or PFL, applies to nearly every organization in the state, so whether you only have one employee or if you have one thousand, you need to follow this new regulation. Beginning January 1st eligible employees will be able to take up to 8 weeks of job-protected leave to care for or bond with a new baby or adopted child, to care for an immediate family member with a serious illness, or to cover the absence of a family member who’s called away for military service.

  • So your top salesperson’s wife just had a baby in September? He can take 8 weeks off.
  • Your operations manager who keeps the whole business running day to day? She can take the time off to help her husband recover from his shoulder surgery.
  • Your customer service liaison? She needs to stay home with her kids while her husband is serving in Iraq.

That’s three employees, all with qualifying reasons to take the time off. Gone for up to 8 weeks. All gone at the same time. On job protected leave, meaning that you need to be able to restore them to their job or a similar one when their leave is up. A lot of business owners I’ve talked to look like they might pass out when they hear this- not because they don’t think bonding with a child, helping a loved one, or serving in the military  aren’t important- they worry how their business can succeed without key employees.

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But perhaps they don’t need to be so concerned. For example, many employers can use PFL as an opportunity to cross-train their staff. If you’re going to need coverage for certain jobs anyway, why not take the opportunity to diversify your team’s skills, creating a more flexible and enriched workforce? Or use PFL to examine your policies and procedures and ask the important question: Why do we do things this way? The answers you discover could surprise you. You may find new savings and efficiencies within your operation.

The second biggest concern I hear from employers regarding PFL is that they’re concerned about abuse, or people taking advantage of the situation. It’s certainly a possibility. If an employee is paying into the system they may feel entitled to the leave, and, as long as they can satisfy the insurance company with the proper documentation, why wouldn’t they take it? Earning 50% of your salary and not having to show up to work for 8 weeks doesn’t sound too shabby, does it? And by 2021 this will grow to 67% and 12 weeks! In addition, employees can choose to supplement available paid time off to make their salary whole. Granted, the insurance carriers will have a lot of incentive to deny false claims and make sure they’re only paying out legitimate ones. Additionally as more millennials come into the workplace this leave will be seen as commonplace, not having the decades of work experience without it. 

So what should an innovative employer do? If you accept that employees will be taking this leave, then perhaps it’s time to revisit your other paid time off policies. What paid time off have employees typically used in the past  when having to care for a loved one or bond with a child? Sick leave and vacation days. Take the opportunity to revisit those policies. Not that you would eliminate those paid days all together, but maybe you should reduce leave in one area in favor of more in another provided by regulations.

There’s no doubt that over the next several years as Paid Family Leave is rolled out and we see just how much of an impact it has, there will be all kinds of ramifications. Look for the silver lining.


Jason Banuski is President of HR One Consulting and a Senior Human Resources Consultant.