Nearly Half of U.S. Employers are Unprepared to Administer Paid Leave Programs, New Study Finds

As states mandate Paid Family Medical Leave and Paid Family Leave programs, employers are burdened with complexity of paid leave compliance

PORTLAND, Ore.--(BUSINESS WIRE)--A new study reveals that nearly half of U.S. employers are unprepared to administer paid leave programs. These findings shed light on the complexity of PFML, or Paid Family Medical Leave, and PFL, or Paid Family Leave, laws. Due to the ongoing changes and nuances of varying PFML laws across states, paid leave programs will be a top employer concern as they explore how new PFML requirements can be integrated into their current policies. Conducted by Versta Research on behalf of The Standard, the study highlights how the burden of administering these programs can be daunting for many employers.

Tracking and complying with legislative requirements is challenging and sometimes overwhelming for companies. In fact, 40% of employers anticipate difficulties over the next few years when it comes to managing multiple leave programs, staying current with requirements that overlap with other leave programs and managing requirements across multiple states. Compounding these uncertainties, a majority of study participants also expressed a lack of confidence in their state's ability to administer a PFML program (64%) or their state's financial stability to pay claims (59%).

Responses indicate many employers are also unaware of the PFML/PFL options available to them, including state-run programs, private carriers or managing programs in-house. Almost half of employers who participated in the study say they still need basic information about coverage levels, costs, how plans are administered and levels of coverage from the states. This would explain why only 25% of companies report feeling "very well prepared" to administer new programs.

Outsourcing administration to a partner that specializes in PFML programs is a compelling option for many employers, of which 47% cited two critical reasons for outsourcing including lack of internal bandwidth (42%) and lack of internal expertise (37%).

“PFML laws are becoming disruptive for employers and highlighting a real need for comprehensive absence management programs. PFML programs require active attention, expertise and appropriate resources to administer along with other leave laws and employee benefits,” says Rene McDonald, product and service manager at The Standard. “Employers are asking a lot of questions and seeking guidance. We are seeing a great need for absence management support, and there are opportunities for companies to get that support from an expert carrier/partner like The Standard.”

To access more insights and resources from The Standard’s Employer PFML Planning Study, visit standard.com/pfml-insights

The Standard’s Employer PFML Planning Study

The 2020 Employer PFML Planning Study was conducted by Versta Research on behalf of The Standard from Jan. 31 to Feb. 13, 2020 and included 452 HR professionals in states that require Paid Family Medical Leave or Paid Family Leave. The study included 353 respondents that represent companies that employ workers where laws are already in effect (California, New Jersey, New York, Rhode Island). It also included 223 respondents representing companies that employ workers in jurisdictions where laws will soon be in effect (Colorado, Connecticut, DC, Massachusetts, Oregon, Washington). There is substantial overlap, with 124 who represent companies that employ workers in both groups of states. All represent companies with at least 25 employees. All respondents have worked for their companies for at least one year, provide input into employee benefits decision-making and are involved in areas of employee health and wellness, safety and risk, occupational health, and/or absence management.

About The Standard

The Standard is a family of companies dedicated to helping customers achieve financial well-being and peace of mind. In business since 1906, we are a leading provider of financial protection products and services for employers and individuals. Our products include group and individual disability insurance, group life, dental and vision insurance, voluntary (employee-paid) benefits, absence management services, and retirement plans and annuities for employers and individuals. For more information about The Standard, visit www.standard.com or follow us on Facebook, Twitter or LinkedIn.

The Standard is the marketing name for StanCorp Financial Group, Inc., and its subsidiaries: Standard Insurance Company, The Standard Life Insurance Company of New York, Standard Retirement Services, Inc., StanCorp Mortgage Investors, Inc., StanCorp Investment Advisers, Inc., StanCorp Real Estate, LLC, and StanCorp Equities, Inc.