PAID FAMILY LEAVE - The Partners Group · Paid Leave Defined Paid Family Care Leave: Paid Leave to care for a family member as defined by policy. This typically refers to immediate

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PAID FAMILY LEAVE

Agenda

▪ Welcome and Introductions

▪ How Did We Get Here? A look Paid Leave in the United States

▪ What’s Required? Current Regulatory Landscape

▪ How Are Companies Responding? Review of Recent Survey and Study Findings

▪ What Are Other Companies Doing? Recent Employer Program Enhancements

Welcome & Introductions

Speaker Intros

Kimberly Mashburn, National Accounts Practice Lead, Group BenefitsKimberly brings over 25 years of experience in the fields of absence and disability management, workplace productivity, wellness and return to work strategies. She has been published in numerous trade and financial journals and is often invited to present at national industry conferences as a recognized thought leader in absence and productivity management. Prior to joining The Hartford, Kimberly was Vice President at a consulting firm where she was the company’s subject matter expert for absence and productivity. She began her career as a registered nurse and served in several hospital-based leadership positions before becoming President and CEO of a large multi-specialty medical practice and then joined UNUM where she served in national accounts leadership roles. She serves on the national board of directors for DMEC and is active in the Atlanta community as chair of an annual Women’s Leadership Conference.

Brycie Repphun, Account Executive, Total Absence ManagementBrycie has spent the entirety of her career in the field of absence and disability management. With a journey that began with administering FMLA leaves for one of our nation’s largest retailers, Brycie advanced to oversight of an Absence and Disability Benefits program for a private Financial Servicing firm where she led the charge to implement several successful Absence solutions, including policy and practice harmonization, creation of a formal ADA evaluation process, and integration of a leave management software solution. Brycie’s intimate knowledge of the challenges and successes, from the employer’s perspective, of maintaining and growing an effective absence and disability program while managing the ever-changing regulatory environment is something she is passionate about sharing with her clients in her consulting role.

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Total Absence Management Overview

▪ Industry Leading Experts▪ 80+ combined years of experience and insights

- Total Cost of Absence Analysis and ROI models- Policy review, program design and process improvement- Integrated Absence Management and Population Health

Strategies- Market Analysis, RFP Management, Vendor Selection- Project and Implementation Management for outsourced

and insourced solutions- Data Analytics and Performance Benchmarking- Transitional Return to Work Programs - Leave and ADA training and communication strategies- Compliance updates and best practice recommendations

Patty Borst

Brycie Repphun

Jean Shearer

One of the Largest Insurance Companies Based in the U.S.

A leading provider of Absence, Disability, Life Insurance, Group and Employee Benefits, Automobile, Homeowners, and Business Insurance

Named one of the World’s Most Ethical Companies by Ethisphere in 2017 for the ninth time1

• The Hartford is the 2nd largest Leave Management carrier

• Top 5 Market Share In-Force Business• Top 3 Writer Of New Business• Financial Strength:

AM Best: A rating

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The Hartford - Trusted Leader7

1 Ethisphere Institute 2008, 2009, 2010, 2011, 2012, 2014, 2015, 2016. 2 LIMRA’s U.S. Group Disability and Life Sales & In-force YE 2015 results.

True Differentiator – Our Ability PhilosophyU.S. PARALYMPICS® AND THE HARTFORD

8

How Did We Get Here?

Paid Leave Defined

▪ Paid Family Care Leave: Paid Leave to care for a family member as defined by policy. This typically refers to immediate family (spouse, domestic partner, child, step relationships, parents) though it may apply to grandparents, grandchildren, or in-laws depending on the policy. Paid Family Leave may also include domestic abuse or stalking response as well as military family leave.

▪ Paid Parental Leave: Paid leave for new moms, dads, adoptive parents, primary, or contingent

▪ Primary Caregiver: Parent, family member, or guardian who has self-identified as the person who takes primary responsibility for a child.

▪ Contingent Caregiver: Parent, family member, or guardian who has self-identified as the person who supports or partners with primary caregiver to care for a child.

USA vs. The Globe

According to the Boston Consulting Group’s 2017 Study on Why Paid Family Leave is Good for Business, the US is one of just 8 countries –and the only member of the Organization for Economic Co-operation and Development –with no national policy mandating paid maternity leave for workers.

The WORLD Policy Analysis Center confirms that the only other countries that do not offer paid maternity leave are Papua New Guinea, Suriname, and 5 Pacific Island nations.

Reference: https://thinkprogress.org/u-s-paid-family-leave-versus-the-rest-of-the-world-in-2-disturbing-charts-365324eeba45

A Brief History of Paid Family Leave

Why has the topic of PFL exploded recently?

▪ Paid Family Leave in Politics

▪ Diverse Workforce With the Need for Flexibility ‒ Dual-Income Households ‒ Sandwich Generation

▪ Among women with children under the age of 18, more than 70% are in the labor force, compared with less than 50% in the mid-1970s.*

▪ Business Focus on Retention Strategies

*Reference: 2017 BCG Study: Why Paid Family Leave is Good for Business

What’s Required: Current Regulatory

Landscape

State Mandated Paid Family Leave

‒ California‒ New York‒ New Jersey ‒ Rhode Island‒ Washington

‒ Washington DC‒ Puerto Rico

State Mandated Paid Family Leave - California

California

Effective • 2004 (expanded 2016, effective 2018)

Eligibility• All Private Sector and some Public Sector employers in CA are covered • Employees paid $300 in wages during the base period are eligible

Covered Reasons• Bonding with a new child (birth, adoption, or foster care)• Care for Ill/Injured Family Member • Employee’s own illness/injury

Covered Family Members

• Child• Parent• Parent-In-Law• Spouse

• Domestic Partner• Grandparent • Grandchild• Sibling

Duration• 6 weeks for Family Care• 52 weeks for Own Disability

Benefit Amount

• 55% of the Worker’s Weekly Wage up to an annually adjusted maximum set by state• Eff 2018 and depending on individual income, workers will receive either

‒ a weekly benefit of $50, or ‒ a weekly benefit of 70% of their weekly wage, or ‒ either 23.3% of the state average weekly wage or 60% of the Worker’s Weekly Wage, whichever is

higher

Funding Method • Through Employee Tax

Job Protected • NoReference: National Partnership for Women and Families 2017 State Paid Family Leave Insurance Laws

State Mandated Paid Family Leave – Washington

Washington

Effective • Enacted 2017, effective January 2019 (premiums) and January 2020 (benefits)

Eligibility• Employee must establish a “qualifying period” (have worked four out of five quarters prior to leave application) • Must have been employed for at least 820 hours in the qualifying period • All employers are covered; Self-employed individuals and independent contractors can opt in

Covered Reasons

• Bonding with new child (birth, adoption, foster) • Care for Ill/Injured Family Member • Employee’s own illness/injury• Qualifying exigency arising out of family member being on active duty

Covered Family Members

• Child• Parent• Spouse• Sibling

• Domestic Partner• Grandparent• Grandchild

Duration • Eight weeks for parental leave, six weeks for family care, two weeks for own serious health condition

Benefit Amount

• Workers paid 50% or less of the statewide average weekly wage (AWW) - weekly benefit rate is 90% of worker’s AWW• Workers paid more than 50% of statewide AWW - weekly benefit rate is 90% of employee’s AWW up to 50% of statewide AWW,

plus 50% of the employee’s AWW that is more than 50% of statewide AWW • The maximum weekly benefit is $1,000 in the program’s first year, and will be adjusted annually to an amount equaling 90

percent of the state AWW

Funding Method

• Employers can deduct from the wages of each employee the full amount of the premium for family leave and 45 percent of the premium for medical leave

• Employers with fewer than 50 employees are not required to pay their portion; if they do pay, they are eligible for state assistance; Employers with 150 or fewer employees are also eligible for state assistance with premiums

Job Protected • Not more than FMLAReference: National Partnership for Women and Families 2017 State Paid Family Leave Insurance Laws

State Mandated Paid Family Leave – New York

New York

Effective • Enacted 2016, effective January 2018

Eligibility

• For family care, employee must be currently and have been employed by a covered for 26 or more consecutive weeks (or 175 days of employment for part-time employees)

• For own disability, employee must have been employed by a covered employer for four or more consecutive weeks (or 25 days of employment for part-time employees)

• Most private sector employers are covered; Self-employed individuals can opt in; Certain public employers (other than state gov) can opt in to family care or own disability; the state government, certain public employers, and public employees represented by an employee organization can only opt in to family care

Covered Reasons

• Bonding with new child (birth, adoption, foster) • Care for Ill/Injured Family Member • Employee’s own illness/injury• Qualifying exigency arising out of spouse, domestic partner, child or parent being on active duty

Covered Family Members

• Child• Parent• Spouse

• Domestic Partner• Grandparent• Grandchild

Duration• For family leave, eight weeks in 2018; increasing to 10 weeks in 2019 and to 12 weeks in 2021 • 26 weeks for own disability

Benefit Amount

• For family care, in 2018, the weekly benefit rate is 50 percent of a worker’s average weekly wage (AWW), not to exceed 50 percent of the state AWW

• For own disability, the weekly benefit rate is 50 percent of the employee’s weekly wage, maximum benefit of $170

FundingMethod

• Own disability is funded jointly by employee and employer payroll contributions• Family care is funded by the employee only

Job Protected • Leave for family care is job-protected, but leave for own disability is no more protected than under FMLA or NY PFMLAReference: National Partnership for Women and Families 2017 State Paid Family Leave Insurance Laws

On the Horizon for State Paid Family Leave

▪ 14 States have Proposed Legislation on Paid Family Leave (OR, MT, NE, OK, TX, MN, MO, IL, GA, VA, MD, VT, CT, NH)

▪ 2 States have Proposed Legislation specific to Paid Maternity/Paternity Leave (SD, AR)

▪ 6 additional States with Unpaid Expanded FMLA (CO, WI, LA, TN, MA, ME)

▪ 2 States have agreed to fund Paid Family Leave Studies (IA, IN)

How Are Companies Responding?

Recent Survey and Study Findings

▪ The Boston Consulting Group (BCG) Study on Why Paid Family Leave is Good for Business

‒ Built on an examination of the family leave policies of more than 250 companies as well as in-depth interviews with 25 HR leaders at large organizations and with representatives of business groups and other stakeholders

▪ DMEC Paid Parental Leave Pulse Survey ‒ 320 total employer respondents including organizations of various

sizes and industries across the US

BCG: Why Paid Family Leave is Good For Business

▪ We have a long way to go…‒ 14% of the US Workforce is covered by an employer-sponsored paid family

leave program ‒ Coverage has increased just 3 percentage points from 11% to 14% since

2010‒ Workers in the highest income quartile are three and a half times more

likely to have access to paid family leave than those in the lowest income quartile

‒ Coverage is 3 times greater among full-time workers than part-time workers

▪ …but we are making progress!‒ Where Paid Family Leave programs originated in industries with high wage-

earners and small candidate pools (such as technology firms, professional services, and financial services), there is a growing trend of PFL programs being introduced in industries with lower average wages (such as manufacturing, food services, and retail)

‒ PFL Policies already in place are being modified in an effort to include more employees

• Covering hourly workers in addition to salaried

• Adding a pay component to a previously unpaid leave

• Providing equal amounts of leave to the primary and the secondary caregiver

Facebook announced recently that it will expand its previous Parental

Leave to include Family Care: receiving up to 20 days of

bereavement leave in the event of a family member’s death, six weeks

of paid leave to care for an ill relative, and 3 days of Paid Family Sick Time to help out with a short-

term illness.

BCG: Why Paid Family Leave is Good For Business – Benefits to Employers

▪ PFL policies can boost employee retention, reducing turnover costs and helping to diversify company leadership teams

▪ PFL can improve a company’s ability to attract talented employees

▪ In industries where PFL is uncommon, it can serve as a differentiator for attracting talent

▪ New and Enhanced PFL programs attract positive attention from the media

▪ PFL helps to reinforce a company’s stated commitment to its employees and their families, which can lead to improved employee morale, engagement, and productivity

▪ Companies included in this study who have implemented PFL programs report no negative affect to the organization’s bottom line and have realized a positive return on their investment

BCG: Why Paid Family Leave is Good For Business – 5 Program Imperatives

1. The policy should reflect the company’s values – consider ways in which you can make your policies more inclusive

2. In addition to the amount of leave you make available, consider creative program provisions that provide a value-add such as flexible options for utilization of time off

3. Show the commitment of your company leadership ensuring they are encouraging employees to utilize your PFL program and ensure they are utilizing the benefits too

4. Ensure that proper support is in place for those on leave, those covering for their colleagues on leave, and for managers

5. Track closely information that will help you measure the success of your PFL program

‒ Utilization data

‒ Employee Replacement Costs

‒ Retention Rates among employees who have taken leave

‒ Employee Perceptions of the program

Questions to Consider When Designing a Paid Family Leave Program

▪ Are benefits required to run concurrently with FMLA or other job-protected leaves?

▪ Is this benefit for continuous leave only, or intermittent also?

▪ What are our minimum time increments in hours, days or weeks?

▪ Do we require an elimination waiting period before the benefit starts?

▪ What job categories are eligible for benefits?

▪ Should full benefit parity for both genders be provided across all leave purposes?

▪ Should variable length of leave caps be provided based on the leave purpose?

▪ Should variable length of leave caps be provided based on length of service?

▪ Is there coordination with other benefits to reduce cost, fill gaps, or provide superior benefits?

▪ How will the benefit be administered: internal, co-sourced, or outsourced?

Reference: 7/10/17 DMEC @Work Article: Popular Complex New Benefit: Paid Family Leave Makes Work Flexible

BCG: Why Paid Family Leave is Good For Business

THERE IS NO CONSENSUS ON THE APPROPRIATE AMOUNT OF PARENTAL LEAVE

BIRTH MOTHER LEAVESECONDARY-

CAREGIVER/PATERNITY LEAVEADOPTION LEAVE

INTERNATIONAL LABOR ORGANIZATION 14-18 weeksRecommended, but number of

weeks not specifiedNot specified

AMERICAN ACADEMY OF PEDIATRICS ~6 to 9 months

BCG DATABASE OF “RECENT MOVERS” ~15 weeks ~8 weeks ~11 weeks

BCG DATABASE OF COMPANIES ~11 weeks ~5 weeks ~7 weeks

SOCIETY FOR HUMAN RESOURCE

MANAGEMENT~8 weeks ~4 weeks ~6 weeks

WHAT EXPERTS

SAY

WHAT THE

MARKET SAYS

Reference: International Labor Organization; NPR, “A Pediatrician’s View of Paid Parental Leave,” October 10, 2016; Society for Human Resource Management; BCG analysis.

DMEC Paid Parental Leave (PL) Pulse Survey ResultsOFFERED PAID LEAVE

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

No Yes -Biological

Yes -Adoptive

Yes - Foster Other (pleasespecify)

DO YOU OFFER PAID PARENTAL LEAVE FOR BOTH PARENTS?

13.8%

1.4% Yes

Mother Only

9.7%Father Only

Primary Care GiverOnly

Other (please specify)

75.2%

51.3%

42.9% 40.3%

26.6%

11.8%

DO YOU CURRENTLY PROVIDE PAID PARENTAL LEAVE BENEFITS?

64.5%70.0%54.6%

33.3%

14.9%10.6%

0.0%

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

No FMLA STD ADA Optional -specify vendor

ADDITIONAL SURVEY RESULTS:

• 80% of the remaining respondents indicate no intention ofproviding PL

• 81% indicate they are not “required to provide paid parentalleave”

• Almost 90% of companies offering PL include coverage forsame sex couples

DO YOU OUTSOURCE OTHER BENEFITS?

Reference: January 2017 DMEC Pulse Survey on Paid Leave. Published in DMEC’s @Work Magazine, March 2017.

How many weeks of paid parentalleave do you provide?

Do you have established time frames for the use of paid parental leave benefits?

40.0%34.6%

35.0%5.2% Immediately following

birth / placement 30.0%34.3%

25.0%Within the first 90 days

20.0%

15.0%Within the first 180 days

10.0%46.3%

5.0%Within the first year

0.0%6.7%

1 - 2 weeks 3 - 4 weeks 5 - 6 weeks 7 - 8 weeks 9 - 12weeks

Unlimited7.5%

37.0%

22.0%

15.0%

10.2%

1.6%

63% of companies provide the same PLbenefit to both parents

37% of companies provide more to the mother

43% require all leave to be used in one block of time

46% allow intermittent or flexible scheduling

DMEC Paid Parental Leave (PL) Pulse Survey ResultsBENEFIT STRUCTURE

Reference: January 2017 DMEC Pulse Survey on Paid Leave. Published in DMEC’s @Work Magazine, March 2017.

DMEC Paid Parental Leave (PL) Pulse Survey ResultsTIMELINE

Reference: January 2017 DMEC Pulse Survey on Paid Leave. Published in DMEC’s @Work Magazine, March 2017.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

This Year

Next Year

3-5 Year Strategy

Other (please specify)

What is your timeline for offering a Paid Leave program?

What Are Other Companies Doing?

Hot Off the Press – Starbucks

▪ 7,000+ U.S. stores operated by 180,000 U.S. employees (partners)

▪ Corporate commitment to make benefits available and affordable for all eligible partners

▪ Continually evolving comprehensive benefit package based on partner feedback and commitment to innovate and lead across their industry

Hot Off the Press – Starbucks

▪ Paid Parental Leave policy for all eligible U.S. partners effective 10/1/17

▪ Eligibility: All benefits eligible partners working at least 20 hours per week

▪ Benefit‒ Birth Moms

• Eligible for 6-8 weeks of paid leave at 100% for medical recovery (current plan provided 66%).

• May begin unpaid Maternity leave 2 weeks prior to the due date without medical necessity; use of Sick or Vacation pay during this time is allowed

‒ New Parents, including Spouse and Domestic Partner

• 12 weeks of leave for bonding with new child (birth, adoption, and foster care)

• Paid for non-store partners

• Unpaid for store partners

Hot Off the Press – Starbucks

▪ Careful Considerations ‒ Focus on what is best for partners ‒ How to coordinate a consistent message

between leave and benefits team ‒ Looping in Key Stakeholders ‒ How much advance notice to provide‒ Impacts to partners who are on leave, were

recently on leave, or who are about to go on leave

Hot Off the Press – Microsoft

▪ 121,000 employees worldwide

▪ Corporate culture focused on careers that involve Investing and Harvesting

▪ Offering paid parental leave since 2015 – 12 weeks of paid leave for new moms and dads

Hot Off the Press – Microsoft

▪ Paid Family Caregiver Leave policy being implemented globally and offered to US employees effective 6/27/17

▪ Allows up to 4 weeks of fully paid leave and up to 8 weeks of unpaid leave to care for an immediate family member with a serious health condition as defined under the FMLA

▪ 22 countries onboarded and now available in the US (effective 06/2017); remaining countries will be onboarded within the next 6 months

Hot Off the Press – Nordstrom

▪ Major retailor with 72,500 employees working in 354 Stores in 40 US States and Canada

▪ Changes to existing Parental Leave policy were driven based on feedback from employees

Hot Off the Press – Nordstrom

▪ Expanded Parental Leave effective 05/01/2017

▪ Eligibility: Employees must have worked at Nordstrom for at least 180 days prior to the date of birth or placement of a new child

▪ Birth Mothers

‒ 12 weeks of fully paid leave – 6 weeks of enhanced maternity pay (coordinated with STD) and 6 weeks paid bonding leave

▪ Other new parents

‒ 6 weeks of fully paid bonding leave for birth, adoption, or foster care

Thank you for joining us today!

Questions?

Please email us at [email protected]