Employee Absences Drive up Costs

Posted on December 29, 2008 by admin

In a recent survey, “The Total Financial Impact of Employee Absences”, conducted by Mercer and Kronos employee absences made up a total of 36% of payroll expenses. This includes both planned and unplanned absences and vacations.

“The Mercer survey, conducted among 455 organizations, found that direct costs (such as pay provided to an employee for time not worked) and indirect costs (such as replacement labor expenses and lost productivity) of employee absence average 35.8 percent of base payroll. Most of these costs (26.6 percent) are attributed to “planned” absences, such as vacations which have likely been approved in advance.

However, “unplanned incidental” absences—such as casual sick days—account for 6 percent of payroll. These type of absences result in the highest net loss of productivity per day “i.e., work that is missed or postponed by not being covered by others” according to the survey. While the direct costs of incidental employee absences are just 2 percent of payroll, the total costs (including the indirect costs of replacement labor) were three times as high at 6 percent, according to Mercer. About one third of respondents use paid time off (PTO) banks that combine vacation and incidental sick days to help manage incidental unplanned absences. “

Read more about the survey at HR.BLR.com.

To help manage and reduce these costly absences it is important to put proper procedures in place. Make sure you have policies in place to explain what constitutes an acceptable absence, the steps that need to be taken to inform superiors, and consequences for abuse of the policy. Even if all of this is in place, it must be enforced consistently in order for it to be effective. The last step of this process is to communicate the policy to employees. They must know what you expect from them and what they can expect from you. A good way to do this is by having an employee handbook with all these policies customized to your organizations needs. Find out more with the HRSentry Handbook Kit.

New Hire Kit Now Available

Posted on December 15, 2008 by admin

Learn how to make hiring easier this year with HRSentry’s New Hire Kit. As of this week, HRSentry users will have access to a set of new hire resources located within the “Getting Started Kit” to help with one of the trickier aspects of employee relations compliance. These resources include orientation checklist, state specific requirements, I-9 form as well as all other tax related forms. Learn more about the specific resources available in the “New Hire Kit” here.

In addition to the new hire resources, we also have two other modules available for purchase. The sample employee handbook and the “termination kit”, which are both available through the “Getting Started Kit”.

New FMLA Changes

Posted on December 4, 2008 by admin

Final Rules Announced on Family Medical Leave Act – Effective January 16, 2009

The U.S. Department of Labor has announced the Final Regulations on updates to the Family Medical Leave Act (FMLA). The main purpose of the regulations is to clarify rules for workers and employers. Here is a summary of some of the changes.

Employee Notice:
Under the final rule, employees must follow the employer’s normal and customary call-in procedures for FMLA notification, unless there are unusual circumstances. The final rules modify the previous provision that had been interpreted to allow some emlpoyees to notify their employers of their need for FMLA leave up to two full business days after an absence, even if they could provide notice sooner.

Employer Notice Obligations:
When an employee requests FMLA leave, or the employer acquires knowledge that an employee’s leave may be for a FMLA qualified leave reason, the employer must notify the employee of their eligibility to take FMLA leave within 5 business days (previously 2 business day), absent extreme circumstances.

Medical Certification Process:
The new rule recognizes the applicability of HIPAA’s medical privacy rule to communications between employers and employees health care providers. The rule adds a requirement that limits who may contact the health care provider and bans an employee’s direct supervisor from making the contact.

Serious Health Conditions:
The rule clarifies that if an employee is taking leave involving more than three consecutive calendar days of incapacity plus two visits to a health care provider, the two visits must occur with 30 days of the period of incapacity. It also defines periodic visits to a health care provider for chronic serious health conditions as at least two visits to a health care provider a year.

Military Caregiver Leave
Implements the requirement to expand FMLA protections for family members caring for a covered service member with a serious injury or illness incurred in the line of duty on active duty. These family members are able to take up to 26 work weeks of leave in a 12-month period.

Leaves for Qualifying Exigencies for Families of National Guard and Reserves:
The new ruling allows families of National Guard and Reserve personnel on active duty to take FMLA-job-protected leave to manage their affairs for qualifying exigencies. Qualifying Exigencies are defined as:

Short-notice deployment
Military events and related activities
Childcare and school activities
Financial and legal arrangements
Counseling
Rest and recuperation
Post-deployment activities
Additional activities where the employer and employee agree to the leave.

As always, HRSentry recommends that you consult with an attorney should your organization have concerns or questions related to these new rules.

To learn more about these and other ongoing HR issues, log into your HRSentry account today.