⚡ Get All Content for 20% Off ⚡

Prepare for Family Leave Laws and Avoid Litigation Later Laws mandating extended paid leaves are increasingly common and already prompting a surge in employee lawsuits.

By Leo Corcoran

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurs have a lot to think about, from funding to adequate office space. When it comes to employees, the main focus is on finding the right people for the right positions, those with the skills and attitude to fuel innovation and growth.

But the legal environment is rapidly changing, with more labor-related rules and regulatory requirements. This is especially the case in the area of employee leave. The federal Family and Medical Leave Act (FMLA) and state and even local laws have made leave the most pressing, complex —and possibly litigious—arena of employee relations.

In September, California Governor Jerry Brown signed a law that gives part-time and temporary workers up to three paid sick days a year. California is the second state to offer paid sick leave for part-time and temporary workers, after Connecticut passed a similar bill in 2011. The New Jersey Assembly will consider a paid sick leave bill this fall.

Related: First Family

On top of these state laws are city laws.

In 2006, San Francisco became the first city in the country to require employers to give their employees time off. In subsequent years, the District of Columbia, Seattle, Portland, Ore., New York City and Jersey City, N.J., among others, passed their own laws.

The cost of complying with just the FMLA is already significant. According to the Employment Policy Foundation, compliance with FMLA costs employers more than $21 billion in lost productivity, continued health benefits and labor replacement. But the real FMLA-related risk is that of litigation.

Lawsuits filed under the statute jumped from 291 in 2012 to 877 in 2013, according to the Administrative Office of the U.S. Courts. The FMLA was the only employment law to generate a sharp increase in claims in that period. The statute requires a lower threshold of proof than most other employment laws. In a bias case, a worker typically has to show that his employer intended to discriminate. But in an FMLA case, he has to show only that the employer somehow deterred or interrupted a leave authorized under the act.

Related: The Ins and Outs of Creating a Parental Leave Policy

HR.com reports the average verdict for FMLA cases related to wrongful termination is nearly $335,000, a devastating amount for a small business, especially a newer enterprise investing for growth rather than immediate profitability. Almost as damaging as the direct costs of litigation are the indirect costs—diverted management time, recruitment impacts and reputational risk.

So what should employers do to deal with these laws, reduce leave absence costs and mitigate litigation risk?

First, employers should invest the time to learn the basics of leave laws and regulations. There are numerous associations that understand the reality of running a business and assist employers to tailor their leave-related programs. The Society for Human Resource Management, the Disability Management Employer Coalition and others provide low or even no cost overviews of FMLA, the Americans with Disabilities Act, and related laws. Opportunities range from online PowerPoints to local seminars designed for, and often presented by, professional leave and disability experts.

At the very least, such introductory training can outline the most important actions to avoid, and point companies to additional resources.

Second, employers should regularly communicate to employees the importance of FMLA and ADA, and owners and managers should embrace the laws' goals and the need to comply with them. Communicating and documenting proper intent helps ensure compliance and has the added benefit of reducing fraudulent leave requests.

Finally, companies -- especially those with locations in multiple jurisdictions -- should consider automating their entire absence management process. There are numerous reasonably-priced solutions that enable managers to track and manage absence in compliance with FMLA, ADA and other state and local laws and regulations. Industry groups like Spring Consulting estimate that comprehensive absence management solutions can reduce direct, indirect and return-to-work costs by 11 percent. Perhaps most important, today's absence management solutions nearly eliminate litigation risk.

Start-up owners have a lot to worry about. Lawsuits over leave need not be one of them. Easy and relatively low-costs steps can take the risk off the table.

Related: In the Latest Move to Revamp Yahoo's Culture, Marissa Mayer Expands Parental Leave

Leo Corcoran is the CEO of ClaimVantage. Corcoran founded ClaimVantage in 2006 after helping build other start-ups through his sales and marketing expertise. ClaimVantage is based in Portland, Maine, with an office in Dublin.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Remote Side Hustle a 43-Year-Old Musician Works on for 1 Hour a Day Earns Nearly $3,000 a Month: 'All From the Comfort of Home'

Sam Ziegler wanted to supplement his income as a professional drummer — then his tech skills and desire to help people came together.

Business News

Costco CFO Reveals Uncertain Fate of $1.50 Hot Dog and Soda Combo

CFO Richard Galanti reveals that the price will stay the same — but only "for a while."

Business News

The Most Unexpectedly Popular Side Hustle of the Decade Has Low Startup Costs and High Markups

A new report shows that vending machines are a popular investment — and the industry is set to grow up to $3 billion by 2031.

Marketing

Ever Wonder Why Certain Websites Rank Higher Than Yours? This SEO Expert Reveals The Secret to Dominating Search Results

It's often the smart use of SEO, now supercharged with AI, particularly in keyword optimization.

Business News

AI Is Impacting Jobs. Here Are the Gigs Affected the Most, According to an Analysis of 5 Million Upwork Postings

The researcher said in the report that freelance jobs were analyzed first because that market will likely see AI's immediate impact.

Leadership

Former Interrogator Shares 5 Behaviors Liars Exhibit and How to Handle Them

Five deceptive behaviors to look for and how to respond to those behaviors when you encounter them.