Remedies for Sick Leave Abuse

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1 Remedies for Sick Leave Abuse Sick leave is a necessary benefit for all your employees. If you didn't offer sick leave, you'd accelerate health problems and the spread of illness, thereby lowering productivity and morale. Despite the pressure for perfect attendance to improve customer service and efficiency, employees need equitable sick leave programs for security and overall high performance. Yet some organizations suffer from sick leave abuse. There are some employees who will call their supervisors on Mondays and Fridays, needing yet another sick day. This packet offers some suggestions to help curb sick leave abuse and general tips on creating sick leave policies. Sick leave abuse translates into lost dollars for organizations. Annual sick leave costs range from $200 to almost $650 per employee, depending on the agency, benefits packet, etc. The Bureau of Labor Statistics estimates that 4 million full-time American workers fail to report to work each week. When staff misses work, the employer must cover supervisory costs to reassign work, continuing benefits for absent employees and sick leave management expenses. In addition, morale, productivity and customer service suffer under the strains of low attendance. While you should treat employees like adults and offer reasonable leave policies to help them, you must hold staff and supervisors accountable for their actions. Your first step should be to determine if abuse exists by tracking and evaluating absences. Direct supervisors to submit data on late arrivals, sick leave abuse and early leave times. Then HR should compare and assess the trends. Is absenteeism higher in one department or under one supervisor? As you collect data, you may examine your policies and practices (or potential policies and practices) and see if they affect any sick leave abuse. Could scheduling problems or workplace practices be contributing to misuse of leave policies? Results from a study on sick leave conducted at the West Virginia Department of Education found job autonomy is a very important variable; the higher the autonomy, the less sick leave used. In addition, as the number of bosses an employee has increases, the use of sick leave rises. The study also reported: Women use more sick leave than men. Pregnancy, child care and the concentration of women in lower paying jobs may have affected these numbers; Salary is a major variable in sick leave use. Higher salaried, exempt employees are less likely to abuse sick leave; Employee stress is not predictive of sick leave use. To determine overall concerns and trends which may affect leave usage, you can also conduct an employee attitude survey. You could find, for instance, workers with limited child care options may take extra sick leave. Based on these results, you could directly address the problem by implementing a child care program. Or a safety program may assist employees in preventing injuries and maintaining their health. If you pursue new programs, carefully track how they affect your "bottom line". For example, do the

2 numbers show employees who use wellness programs also exhaust less sick leave? If you're not meeting the desired goals of your program and you can't legitimately justify its benefits, you may re-evaluate the program's existence. Your analysis may find only certain employees are abusing your system. If one employee is causing problems, make sure the supervisor is providing the appropriate guidance, warnings and disciplinary action. Management should meet with staff to discuss sick leave problems, explaining why attendance is important and consequences for abusing the policies. The supervisor should also try to learn the root of the absenteeism problems and as appropriate, report information to HR. Remember to treat your employees like adults and, hopefully, they will respond with responsible actions - in this case by not taking unnecessary leave. HR professionals can be a key consultant to line management when absenteeism runs rampant. Although the approach in Louisiana does not focus on sick leave per se, some of its lessons may be adaptable to sick leave policies: "Our leave accrual rates are high, with no caps on accrual amounts. This particular agency is a high productivity' oriented agency and absenteeism has been a big problem for us. Although we have no authority to change leave accrual rates, July 1, 1996, we implemented an agency-wide policy that effectively limits leave usage overall," reports Belynda L. Gauthier, Human Resource Director, Louisiana State Employees' Group Benefits Program. "In preparing the policy we found one of our biggest problems was that managers and supervisors have a hard time saying no to an employee's request for leave. For those with below acceptable attendance averages, the new policy takes the authority to approve leave out of the hands of the managers." Basically, the state's premise is that an average attendance below 90% (or 36 hours) of the available work time is unacceptable. Using payroll data, the agency generates bi-weekly attendance average reports on every employee and distributes these to their managers; HR and payroll also receive a complete set. Both long-term (12 month) and short-term (6 month) averages are calculated. In addition, for each of these periods of time an average is calculated to include both overtime worked and compensatory leave taken, and a second average that uses neither of these factors. "The bottom line is that each employee has four chances to hit that magic 36 hour attendance average. If he/she has a 36 hour average on even one of these figures, his/her manager or supervisor may approve the use of annual or compensatory leave. If the employee's averages are below 36 and he/she wants to use leave, the request must go before a rotating committee of his/her peers. This is not as complicated as it appears, at least it isn't now that we've worked with it for nearly one year. We have about 358 regular employees covered by this policy. In the first 6 months the policy was in place, 7353 hours less leave was used. This was great progress for us," notes Gauthier. To prevent further sick leave abuse, some organizations require medical verification of illness. Agencies often require a doctor's note anywhere from two to five days after an illness and other jurisdictions let supervisors or department heads use their discretion to request doctor's certification. Still other agencies may question employees who use sick leave when their balance is zero or immediately prior/after a vacation or weekend. Policies with waiting periods mean sick leave could be unpaid leave unless a doctor's

3 note is submitted. Generally, employees will not take a day or two of sick leave under false pretense if that leave is unpaid. One company, the Garden Valley Telephone Company, reduced the amount of basic sick leave time from 12 days to 5 days each year. In exchange, the company implemented provisions for paying extended sick leave (when certified by a physician) and bereavement leave for funerals of close family members (HR Magazine, March 1995). This policy protects employees during unforeseen absences, while limiting the employer's overall costs for time-off benefits. Some attendance-incentive programs offer awards - including cash, flex-time, bonus personal days, extra vacation days or certificates - to employees with perfect attendance or low absenteeism. Forty-four percent (44%) of the 427 IPMA agency member respondents to the 1996 Personnel Program Inventory (PPI) give cash/pay for unused sick leave. These programs are meant to re-enforce what the organization values: good attendance and productivity. A no-fault absentee program looks only at the number of sick days taken and if they reach a certain level, the employee receives a series of disciplinary action. This means employees with legitimate reasons for missing work frequently may be punished more severely than they should be. Under the Family and Medical Leave Act (FMLA), "bonuses for perfect attendance and safety do not require performance by the employee, but rather contemplate the absence of occurrences. To the extent an employee who takes FMLA leave had met all the requirements for either or both of these bonuses before FMLA leave began, the employee is entitled t continue this entitlement upon return from FMLA leave, that is, the employee may not be disqualified for the bonus(es) for the taking for FMLA leave." It is a violation of the law and regulations to discriminate against employees who have used FMLA leave. Again, addressing the subject of attendance programs, the regulation makes clear that "FMLA leave cannot be counted under no fault' attendance policies." Beyond paying for unused sick leave at given intervals, several agencies (58% according to the 1997 PPI) cash-out sick leave at retirement. Review state law when you consider paying for unused sick leave pay. Does your state define sick leave as a benefit or as wages earned? Consult legal counsel and/or your state's Department of Labor prior to making a final decision. Some states define how benefits are accrued and how wages or earnings are defined. Many states give employers the option of establishing policies and procedures for how benefits are offered. Other states have established state law precedents dealing with the payout of sick leave upon termination. In addition, some states require employers to pay accrued leave to all terminated employees. Often, employers pay accrued leave only if workers provide adequate notice or resignation; leave is rarely paid when an employer fires an employee. Accrued time often becomes an unfunded liability for the agency. One city manager, for instance, retired after twenty years of service and received $20,000 in sick-leave benefits. After reviewing state and federal law, write your agency's policy and communicate it effectively to your employees so everyone is aware of the proper procedures. Dover, NH introduced a disability program approximately four years ago to offset a change in sick leave accrual. Prior to instituting the disability program, employees

4 accrued sick leave on a monthly basis with a cap of 180 days. Employees were paid for sick leave upon termination using a percentage scale up to a maximum of 50% which was based upon the type of termination (retirement, layoff, resignation, death, etc). The city booked sick leave accruals as a liability and their auditors noted the continuing growth of this liability from year to year. To resolve this concern, Dover switched four years ago to granting 10 days per year for sick leave, "use or lose." Past accruals and the buy-out provisions were grand-fathered. The grand-fathered accrued sick leave is still available for an employee to use if needed, but they do not accrue any additional time. Employees are awarded a personal day in June and December if they do not use sick leave. Personal days do not accrue and are not allowed to be carried over from year to year. Dover's disability program was promoted through negotiations with the city's bargaining units. The disability program is short-term in that it is for up to one year and is intended to extend an employees sick leave days for legitimate long-term (beyond five days) illness/disability. The program is self-funded through existing salary line items (an employee still draws wages from their budgeted line item). "This does cause difficulty for us in finding funds for replacement workers," says J. Michael Joyal, Jr., Assistant City Manager. "We are considering setting up a separate fund to address this cost issue." "Rewards" other than pay for unused sick leave are not very common. Some agencies, for instance, convert sick leave to insurance at retirement; thirty-seven PPI survey participants (8.7%) offer this benefit. A few more agencies - 11% or 48 respondents - convert sick leave to vacation time, according to the PPI. One city changes sick leave time to cover wellness expenses and nearly 3% (or 12 jurisdictions) convert sick leave to long-term disability insurance. Be careful, however, if you bestow awards for sick leave use. Cash incentives can be expensive and some studies reveal that workers who abuse their leave privileges tend to value time away from work more than a little extra money. Offer incentives that employees find meaningful and will lead to changed behavior. Consider offering a mix of rewards to teams, departments or individuals so you can maintain some interest in the program. If you hold a lottery where employers select, at random, a "winner" of some special recognition, the other employees with low absence rates may feel left out; so you can avoid programs that are not fair or equitable. In addition, some experts, including Alfie Kohn, author of the book, Punished by Rewards, eschew reward programs and believe you should not reinforce behavior with these types of gifts because the benefit is very short-term. Even if extra incentives encourage employees to come to work, it won't necessarily change their behavior once they arrive. Always look for underlying reasons for sick leave abuse. An employee assistance program, supervisory training, better work conditions, education, etc. may positively affect this person's attendance.

5 Paid leave banks are another option to curb sick leave abuse. With these "unileave" banks, employees can take time-off for vacation, personal time or sick leave. These programs give employees more control and responsibility to plan leave use. If you follow the guidelines above and adapt your policy and programs to fit your workplace, you can reduce irresponsible sick leave use and offer fair choices to your employees.

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