The Side Effects of the Family and Medical Leave Act

Numerous studies have indicated that most large companies already had family and medical leave acts in place before they were required by law. A survey of 1,000 employers conducted by Lincolnshire, Illinois-based Hewitt Associates, which was released in March 1993, found that as many as 63% of the surveyed companies already had family-leave policies and 56% had medical-leave policies. However, very few had policies that contained all of the same provisions as the federal Family and Medical Leave Act (FMLA). According to Carol Sladek, a work-and-family specialist with Hewitt Associates, most companies had to “make at least some adjustments to their leave programs to comply with the new law.” For example, a majority of companies had to alter their policies to include the provision that requires them to continue payments of medical benefits for employees on leave.

In the time between June 4, when the Department of Labor released the act’s regulations, and the act’s effective date, human resources managers across the nation scrambled to whip their current policies into shape. Compliance wasn’t the only goal of many of the managers, however. Having to look into compliance with the law afforded human resources professionals the opportunity to review their family-friendly policies as a whole. “People aren’t just interested in the regulations,” says Paul Cholak, a consultant for Alexander & Alexander and a board member of the Boston HR group. “They are looking at [the FMLA] in a much broader sense. It’s raising the consciousness of people about work-and-family issues.”

Gerald Uslander, an attorney in the Washington, D.C., office of William M. Mercer, has made the same observations. Many employers, forced to comply with the law, are making it work for them. “Let’s make the employees feel that they’re getting something from us,” says Uslander regarding employers’ attitudes.

In fact, studies have shown that having family and medical leave policies is advantageous for businesses. In its survey of companies that had leave before the enactment of the FMLA, Hewitt found that the majority of companies experienced a boost in morale and goodwill among employees, and decreases in turnover. Approximately 40% of the companies also experienced decreases in recruiting and retraining costs.

Ted Pippin, director of HR for Providence Hospital in Washington, D.C., has seen these benefits firsthand. His company has had family and medical leave policies “on the books” for two years as a result of a Washington, D.C., statute. (Because the hospital is a Catholic institution, however, Pippin says that it has always provided people with needed leave.) “People get time to spend with their families when they are in need,” says Pippin. As a result, Pippin says that the employees see that the company cares for them because it holds their job open and helps them financially by paying for their benefits while they are out. The goodwill created from the gesture has helped the hospital retain good employees.