How To Reduce Absenteeism and Address FMLA Abuse

Over the past several years, the issue of high absenteeism, including Family Medical Leave Act (FMLA) abuse in the United States, has become one of the most talked about challenges facing employers today. High absenteeism is a major concern for labor and human resources executives alike from many diverse employers including those in the manufacturing, distribution, healthcare, hospitality and services industries as well as the public sector.

The main challenge is the fact that high absenteeism is typically associated with excessive unplanned absenteeism such as “casual” absences or intermittent FMLA leaves in the United States. In addition, the direct and indirect costs associated with high absenteeism can be both significant and difficult to quantify. Finally, there is no one silver bullet that an organization can utilize to address this pervasive problem.

High absenteeism can have a significant impact on an organization’s bottom line financial results. Costs are often difficult to quantify and may be attributable to a number of factors including the following;

  • Cost of replacement workers – these costs may include; the direct cost of the absence itself (e.g., Sickness and Accident benefits), overtime costs for co-workers (e.g., shift augmentation costs or call-in pay), cost of full-time (incremental benefit costs) or temporary replacement employees.
  • Impact on quality – in an ideal state, organizations should have a trained operator on the job at all times in order to protect quality. These costs are often very difficult to quantify.
  • Impact on productivity - lost units and/or revenue may be difficult to make up and it may cost more to generate this replacement revenue (i.e., overtime costs). There may be greater challenges for businesses that have fully integrated assembly lines like the automotive manufacturing industry, especially at the start of a shift where essentially every work station needs to be manned in order to produce one single unit.
  • Impact on employee morale - poor quality or lost productivity may affect co-workers financially (e.g., profit sharing bonuses). Co-workers may become tired of “covering” for chronic absenteeism. In addition, chronic abusers may be posting pictures of themselves on social media (e.g., at sporting events), further impacting employee morale, especially if employees do not see management actively trying to address the problem.

While it may not directly assist an organization in reducing absenteeism, it may be helpful to understand why employees are taking time off work. Based upon discussions with colleagues from various industries over the past few years, there are a number of perceived “reasons” for excessive unplanned absenteeism including the following;

  • Excessive scheduled overtime – employees may just want a break or want time to attend a function or required appointment
  • Child care
  • Elder care
  • Employees are working essentially because they need benefits (e.g., healthcare)
  • Employees are living with their parents and have minimal financial commitments

As mentioned earlier, there really is no one single silver bullet to address high absenteeism. However, there are numerous tools and strategies available to design a comprehensive approach to address this highly complex issue. A few ideas are highlighted below.

For starters, organizations should work with their talent acquisition teams in order to attempt to hire employees who will show up to work on a regular basis. For example, this may be accomplished by designing appropriate behavior-based or situational questions in the hiring process that can help tease out desired job candidates.

Secondly, organizations should develop robust attendance policies and ensure that these policies are strictly adhered to and enforced.

Thirdly, in the United States, many employers believe that employees are seeing the Family Medical Leave Act (FMLA) as a low-risk opportunity to secure more time off and in some cases, employees are utilizing FMLA to circumvent the strict attendance policies that employers have put in place. In my opinion, the single most effective deterrent to address potential intermittent FMLA misuse is to ensure that FMLA leaves run concurrent with an employee’s paid time off entitlements. In other words, if an employee utilizes 8 hours of intermittent FMLA leave entitlement, they also utilize 8 hours of their vacation entitlement.

For years, on behalf of employers, the U.S. Chamber of Commerce has been lobbying in an effort to address FMLA abuse. Two of their key areas of focus have been to challenge the definition of a “serious health condition” and to implement some notion of a “minimum spend” on FMLA entitlements as employees today are able to take FMLA in increments as low as six minutes. Perhaps, a “minimum spend” of perhaps 4 hours (or 120 incidents per year in the case of 480 hours of FMLA entitlement) or 8 hours (60 incidents per year) will assist in addressing some of the abuse. Believe it or not, based upon discussions with colleagues from various industries, there are cases out there where employees are late for work well over 120 times per year, claiming FMLA in the process. As you can imagine, this creates a nightmare for employers from a scheduling perspective. In addition, if employees are 20 minutes late for work due to FMLA, then employers may have been required to call in a replacement for them and accordingly, may perhaps be on the hook for 4 hours of call-in pay for that replacement employee. The federal government has effectively capped FMLA entitlements at 480 hours per year based on 2,080 hours available (52 weeks x 40 hours) in a year. Accordingly, FMLA entitlements equate to approximately 23% of hours available (480 / 2080). Using that same logic, there are 260 work days in a year (52 weeks x 5 days per week). By applying the 23% factor to 260 work days, it suggests that there should be a maximum of 60 FMLA incidents allowed per year (so 60 incidents x 8 hour minimum spend = 480 hours). I am not sure what the right answer is here but clearly these short-term intermittent FMLA leaves need to be addressed. The only way that the federal government will listen to the legitimate concerns of employers is if they band together and lobby for change. From what I have heard, employers are supportive of the FMLA legislation for legitimate purposes. However, their legitimate concern is the fact that it is very costly to address potential FMLA abuse from both an administrative perspective (pattern recognition requires a lot of time and effort) and financial perspective (cost of second / third medical opinions and/or private investigators).

Finally, I am convinced that the Pareto Principle also known as the good old “80/20 rule”, applies to high unplanned absenteeism, that is, 20% of employees drive 80% of an organization’s unplanned absenteeism. The trick of course is to identify the 20% and to implement appropriate countermeasures to change behaviors. I have been involved in designing and implementing comprehensive strategies aimed at addressing high absenteeism and FMLA abuse over the years and have witnessed significant improvements.

If you are interested in learning more about how to identify and focus on the 20% noted above and to learn more about developing comprehensive strategies to address high unplanned absenteeism, including potential intermittent FMLA abuse, visit our website at www.hrandlaborguru.com and look at the “Breaking the HR Analytics Paradigm” webinar in the HR Analytics series.