Accounting for absenteeism: optimizing leave programs with a focus on care and engagement

March 15, 2023

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If 2022 was the year of returning to work, 2023 is about keeping workers engaged.

The global shift to remote work triggered by the COVID-19 pandemic may have shown us that employees can be productive without setting foot in an office, but both remote and hybrid models have given rise to new workplace trends like “quiet quitting” and increased absenteeism. In January 2022, approximately 4.2 million of the country’s 129.7 million employees worked part-time because of illnesses, injuries or medical problems—the second highest percentage since 1976, when data was first collected.

According to the Centers for Disease Control and Prevention, productivity losses related to health problems cost U.S. employers $225.8 billion annually, or about $1,685 per employee. The CDC also notes that the indirect costs of absenteeism or reduced work output due to poor health may be several times higher than the medical costs associated with treatment or prevention.

At the same time, labor shortages and talent migration trends have increased employees expectations regarding the benefits they receive. For example, many are taking advantage of options like paid leave to preserve their health or the health of loved ones. Understanding the trends of your workforce and identifying barriers to employee well-being is critical for managing costs and promoting engagement and productivity.

Viewing employee benefits as employer obligation

It’s become more clear which positions require an in-office presence versus those that can be conducted remotely, but workers are still juggling a number of unprecedented factors that may affect performance or lead to absenteeism. This includes the effects of long COVID and a rise in anxiety- and stress-related disorders. With mental health front and center, now more than ever it’s important to ensure your leave and accommodation programs are designed to meet employee needs.

Mental health has become a leading driver of absenteeism. How employers choose to approach their support for employees’ mental health is a current key focus area in both talent recruitment and engagement. The Disability Management Employer Coalition (DMEC) reports that 66% of workers believe their employer has an obligation to help with their mental health needs, while 41% of employees feel their workplace offers no programs for mental health support. Fortunately, we have an idea where employers should begin: The American Psychological Association (APA) says that 41% of workers want flexible work hours, followed by 34% who say they want a workplace culture that respects time off.

In designing an effective benefits and leave program, employers must be mindful of worker expectations for mental and physical health support while adhering to increasing protections from states. By 2026, 15 states will add protections requiring paid family or medical leave, up from six in 2016.

A successful leave program means setting people up for success by encouraging staying at work or alleviating the stress of taking leave if it’s necessary. Oftentimes, employees will heal more quickly if they are working part-time compared to sitting at home. This will pay dividends to the employee and the employer.

Bridging the gap: solving for accommodation and flexibility

As we move from pandemic to endemic, many employers are bringing people back to the office. However, employers don’t have the level of discretion that they did pre-pandemic when it comes to employees’ accommodation requests to work from home.

Specifically, until the pandemic, courts allowed companies to call the shots when it came to the importance of onsite presence. A 2016 6th Circuit case (EEOC v. Ford Motor Company) did a good job of typifying this. In this case, the court said that “regular, in-person attendance is an essential function—and a prerequisite to essential functions—of most jobs.”

However, the first post-pandemic EEOC remote work case serves as a harbinger of things to come; it’s now harder for companies to require employees to come into the office without individually assessing an employee’s accommodation request. In EEOC v. ISS, Civil Action No. 1:21-CV-3708-SCJ-RDCEEOC, the employer shut down onsite operations four days per week in March of 2020 and brought employees back to the office a few months later. As employees were told to come back onsite, one employee, with a documented disability, requested to continue working from home two days per week. The company denied her request, and subsequently fired her. Rather than fight this decision in court, ISS settled the case for $47,500.

In that case (and with all accommodation requests) the employer should interactively dialogue with an employee and explore accommodations, including remote options. The reason for this is simple: at the onset of the pandemic, employees were forced to work from home – resulting in a “trial basis” for remote work. And, many companies experienced either the same, or increased, productivity.

Now, in the “after times,” if an employer wants to refuse a work-from-home accommodation request, they should be able to answer some questions: Why is in-person work necessary? What hardships would be created by a specific employee working from home? To substantiate the refusal to work from home, an employer should be prepared to explain that although remote work was required during the shutdown, it was not effective (e.g., problems with technology, decreased productivity, lost sales, etc.)

Flowing from this remote-work new world order: an increased employee expectation that they should be able to work how they want, when they want — and employers must be prepared. Many have responded by making hybrid work the norm – employees coming in a couple days a week, while working the balance of the week at home. This model, most likely, isn’t going away any time soon.

Another consideration: Long COVID. Millions will develop disabling long COVID, creating market conditions that are expected to have significant impact not just on the healthcare system, but employers and workforce absence vendors and insurers. With diagnosis of long COVID remaining inconsistent, and symptoms presenting differently for each individual, advisory bodies like the Disability Management Employer Coalition (DMEC) are developing a set of best practices and resources for employers to use as they manage long COVID cases and return employees to the workplace. This includes developing a consistent definition and timeline of long COVID for use in workplace accommodation and return to work discussions.

In addition, the DMEC has categorized long COVID into four phases and issued considerations for employers experiencing a high volume of cases or facing barriers to employee disclosure of symptoms. Their message to employers is simple: To avoid defaulting to leave as the employee’s only option, assess the situation using traditional stay-at-work absence management strategies while focusing on the individual’s functional and cognitive abilities.

By working together, employers and employees can identify solutions and support options that allow all to continue moving forward toward their shared mission.