From increasing pressure on employers to provide holistic benefits, to a greater adoption of statutory parental and family leave programs, the tides are turning in absence management. It is critical for employers and workers alike to play close attention to current trends, the implementation of landmark federal and state laws, as well as recent litigation highlights to understand the changing landscape’s wide-ranging implications. Are you prepared for what’s coming next?

Company paid parental and family leave

There is currently no federal law regarding paid family and medical leave, which refers to the policies that enable workers to receive compensation when they take extended time off work for qualifying reasons (such as bonding with a new child, recovering from one’s own serious illness or caring for a seriously ill loved one).

This is despite a notable generational push by millennials — the most prominent generation in the workforce, ages 27 through 42 — for extended measures of support. Many millennials not only have growing families, but also aging parents to take care of, and believe that employers have a responsibility in enabling their workers to do so sufficiently while keeping their jobs.

According to a 2022 Disability Management Employer Coalition (DMEC) report that used survey data collected from 1,101 U.S. employers, although 70% of all employees are eligible for paid parental leave (PPL) and 74% are eligible for paid family care leave (PFL), only 29% of participating companies sponsor PPL offerings and 4% provide PFL. Nearly half of companies do not offer any paid parental or family care leave. Additionally, 60% of companies that do provide leave have durations less than eight weeks — a trend likely to shift in coming years.

There is also a push for employers to provide holistic benefits — ones that are family-friendly and support all stages of life — including support for family needs, in addition to mental, physical and social health. To maintain a competitive edge in this tight labor market, employers will need to truly understand how their employees feel in all aspects, and whether employers’ perception of well-being aligns with their employees’ expectations and needs. This means carefully examining their answers to questions like: How is team morale? How feasible and balanced are employee workloads? Do employees feel comfortable enough to ask for time off?

Key statutory updates

This year, in 2023, two states — Oregon and Colorado — rolled out new PFL programs simultaneously. In 2026, four more states (MN, MD, ME, DE) will follow in their footsteps, putting the total U.S. state count with PFL program offerings at 16, a 167% increase from a decade earlier. This shift mirrors workers’ growing expectations and pressure. After all, the U.S. is one of only seven developed nations to not have a uniform paid family medical leave law. State governments are picking up the slack to provide their residents with paid leave, often drawing inspiration from other states’ new programs.

Oregon’s paid leave program allows for 12 weeks off to care for one’s own serious health condition, addressing the immediate safety and impact of domestic violence and/or sexual assault, bonding with a new family member, or caring for a family member’s serious health condition (including a spouse, child, sibling, grandparent and grandchild, as well as “[a]ny individual related by blood or affinity”). Those who need a longer duration of leave due to pregnancy or childbirth may receive an additional two weeks.

Colorado’s program, which launched this year, is similar. Like Oregon, it allows for 12 weeks of leave for bonding with a new family member or caring for a family member’s serious health condition (also using the extended definition of “family member”), and addressing domestic violence/sexual assault. It also covers arranging for a family member’s military deployment. Those who experience complications from pregnancy or childbirth may receive an additional four weeks, but unlike OR, it can only be resulting from a “complication,” not routine natal care.

Of the states rolling out programs in 2026, Delaware is notable as it includes an option for employers to request to opt out of the state’s program (and “grandfather” in their existing program) if there is already an existing paid time off (PTO) plan in place that’s richer and more beneficial to employees.

The Pregnant Workers Fairness Act

The Pregnant Workers Fairness Act (PWFA), a new landmark law that went into effect in June 2023, is changing the landscape of accommodations by giving pregnant workers more rights. Specifically, it requires covered public and private sector employers with more than 15 employees to provide reasonable accommodations to a worker’s known limitations related to pregnancy, childbirth, or related medical conditions, unless the accommodation will cause the employer an “undue hardship,” meaning a significant difficulty or expense for the employer.

Reasonable accommodations under this law are similar to those provided under the Americans with Disabilities Act(ADA), but broader. Examples of possible reasonable accommodations, among others, include the ability to sit or drink water, receive closer parking, have flexible hours, and take time off to recover from childbirth. However, within the PWFA, pregnancy is not classified as a disability, whereas under ADA some pregnancy-related conditions may still classify as a disability. It is critical employers review both the ADA as well as PWFA from a limitations perspective for pregnant workers.

At the end of 2023, the U.S. Equal Employment Opportunity Commission (EEOC) will release finalized draft regulations containing a range of notable provisions. Of those likely to be adopted, employers can be deemed in violation of the law if there are any unnecessary delays to the accommodation process, and an employee cannot be required/held responsible for starting the PWFA review process. It is triggered immediately by any conversation with an employee that mentions their pregnancy-related condition. Front-line managers will need to be trained and educated accordingly.

Takeaways and predictions for 2024

Holistic health (including mental health) benefits, that provide support at all life stages, are becoming less of a shiny bonus, and more of an employee expectation. Employers will need to dig deep to ensure alignment between their workplace policies/benefits programs and their employees’ well-being.

Individual states are continuing to develop paid family leave plans with varying designs, and we believe that will continue going forward. As more states normalize PFL offerings it will further pressure other states to adopt their own. Meanwhile, the stalemate for a nationwide disability program on a federal level will likely persist.

Finally, we anticipate that litigation by pregnant workers will slowly spike as employers grapple with complying with PWFA and related state accommodation laws.

Learn more > Explore our absence management solutions, catch up on the DMEC webinar and bookmark Sedgwick connection for the latest insights from industry leaders around the world.