How to Navigate State Leave Laws
It's important to know that leave rules are changing, and states could pass legislation to implement or amend them that may differ from any federal leave requirements. Businesses should be mindful of the various laws in place, as they will need to comply with the most stringent law applicable in any jurisdiction and will have to decide whether they can or should implement those same policies across the organization.
Many states have their own medical, pregnancy, military and other types of leave laws that may differ from federal employment laws, and state leave laws can also vary from jurisdiction to jurisdiction. For example, some states, such as California, New Jersey and Rhode Island have their own family leave requirements, according to the National Federation of Independent Business (NFIB). In 2018, New York will join the list. Several states require paid sick leave, according to the National Conference of State Legislatures (NCSL), including:
- California
- Connecticut
- Massachusetts
- Oregon
- Vermont
More State Leave Rules Expected
According to Forbes, as many as 20 more states could be considering passing paid family leave laws soon. Local jurisdictions have also implemented their own legal requirements. For example, cities like San Francisco and Jersey City, NJ have paid sick leave requirements.
It's important to know these rules are changing, and states could pass legislation to implement or amend leave rules that may differ from any federal leave requirements. Businesses should be mindful of the various laws in place, as they will need to comply with the most stringent law applicable in any jurisdiction and will need to decide whether they can or should implement those same policies across the organization.
Work With HR to Determine the Best Route
Finance leaders should try to understand the subtle nuances between the varied laws in order to properly budget for the cost of leave and the long-term status of any workers brought in to fill gaps. That means working with HR to determine if existing workers can pick up any of the slack or if new workers will be needed.
But there are a number questions that should be answered before a policy is determined. Will overtime costs be more cost-effective than bringing on new employees at lower wages? Will these new workers be brought in as temporary , part-time or full-time employees?
Figuring out the answers to these questions and forging a cogent policy for your entire organization will require a strong HR and finance partnership. While finance leaders know an organization's budgetary requirements, HR can provide finance leaders with a clear picture of how staffing changes will influence affected departments and provide additional context to determine the exact type of employees needed to fill in the productivity gaps.
Integrated Software Minimizes Cross-State Discrepancies
Once the strategy is determined and agreed on, you should look at your payroll software and time and labor management (TLM) systems to determine whether they are capable of coming together to automate the process, even when you have employees in multiple states with multiple leave laws. An up-to-date payroll application can help you stay current with evolving state, federal and local leave laws and further help you stay compliant. If you organization is still relying on siloed systems, it is worth investigating whether an HR software upgrade is an investment that could help save your employees time and your organization money in the long run.
By partnering with HR, finance leaders can prepare for absences and ensure that all federal, local and state leave laws are met. Additionally, while working together to develop the best leave strategy for the business, you should assess your systems to ensure they are capable of handling different rules across states and cities. Adopting an integrated payroll and TLM system can make the lives of your HR managers much easier, allowing them to take care of any payroll needs and properly account for leave benefits earned, leave benefits used and any withholding tax changes or staffing changes that arise from workers taking leaves.