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The GuidanceResources Company

®

FMLASource®­Case Studies in FMLA Absence and Cost Reduction

According to the Society for Human Resource Management, more than 60 percent of employers believe they've granted Family and Medical Leave Act (FMLA) time off that was unfounded. Employers have good reason to be cautious: according to the Equal Employment Opportunity Commission, employees who successfully sue for wrongful termination based on an FMLA absence receive an average of $87,500 to $450,000 in damages. In addition to legal and administrative issues surrounding FMLA, the Act can be a costly source of absences and business disruption. Using a team of attorneys and FMLA experts, FMLASource® handles the administrative tasks associated with the act, provides guidance on requirements and eligibility, coordinates the FMLA benefit on behalf of the employer and trains and consults with employers on how best to manage FMLA leave. The results, as the following four case studies show, are dramatically reduced absences and cost savings.

Case Study #1

A trucking and manufacturing company with 17,000 employees throughout the U.S. had a 99 percent approval rate for FMLA leave, which was disruptive to scheduling, operations and staffing. After FMLASource was implemented, putting more rigorous controls into place along with legal oversight, more than 30 percent of FMLA leave time was eliminated.

Data and assumptions > No. of employees: 17,000 > Avg. annual program cost: $224,400 > Avg. salary: $40,000 ($19.23 hourly)

Percentage of approved cases > Total hours used > Average hours per employee > Total annual hours saved > Value of hours saved > ROI >

2003

99% 336,123 29.43

2004

79% 320,421 19.44 15,702 $301,949 1.35 : 1

2005

73% 229,446 15.68 106,677 $2,051,399 9.14 : 1

2006

67% 220,164 12.57 115,959 $2,229,892 9.94 : 1

Case Study #2

A 50,000-employee division of a Fortune 100 company was experiencing a significant number of FMLA absences. Questionable leave requests were reduced by refining the language of corporate policy and developing more precise forms and correspondence to be used by employees and their medical providers. FMLASource also analyzed the company's absence data to uncover trends and patterns, a process which identified employees with recurrent absences. By focusing on frequently absent employees, almost 40 percent of FMLA leave time was eliminated.

Data and assumptions > No. of employees: 50,000 > Avg. annual program cost: $660,000 > Avg. salary: $55,000 ($26.44 hourly)

Percentage of approved cases > Total hours used > Average hours per employee > Total annual hours saved > Value of hours saved > ROI >

2001

100% 2,100,000 40.2

2002

83% 1,800,000 36.1 300,000

2003

79% 1,600,000 32.2 500,000

2004

78% 1,270,000 25.4 830,000

2005

62% 1,000,000 20.1 1,100,000

2006

61% 965,000 19.3 1,135,000

$7,932,000 $13,220,000 $21,945,200 $29,084,000 $30,009,400 12.02 : 1 20.03 : 1 33.25 : 1 44.07 : 1 45.47 : 1

The GuidanceResources Company

®

FMLASource®­Case Studies in FMLA Absence and Cost Reduction

Case Study #3

A health care facility with 2,500 employees was experiencing an inordinate amount of intermittent leave, which can be especially disruptive in health care staffing. Total hours of FMLA absences also were a problem, and administration of FMLA had become costly. By tightening FMLA processes and requiring more consistent documentation of leave from employees and medical providers, FMLASource reduced the amount of intermittent leave from 61 percent to 44 percent.

Data and assumptions > No. of employees: 2,500 > Avg. quarterly program cost: $8,250 > Avg. salary: $42,000 ($20.19 hourly)

Percentage of approved cases > Total hours used > Percentage of intermittent leaves > Average hours per employee > Total quarterly hours saved > Value of hours saved > ROI >

4Q05

99% 34,250 61% 13.7

1Q06

82% 31,411 54% 12.56 2,839 $57,319 6.95 : 1

2Q06

73% 25,687 48% 10.3 8,563 $172,887 20.96 : 1

3Q06

72% 21,951 45% 8.7 12,299 $248,317 30.10 : 1

4Q06

71% 20,223 44% 8.1 14,027 $283,205 34.33 : 1

Case Study #4

In addition to the cost of FMLA absences for a large health insurance company, administration and compliance related to the Act was time consuming and expensive. The company's staff was overwhelmed with tracking and paperwork associated with FMLA, and the number of staff making FMLA decisions left the organization vulnerable to inconsistency and litigation. By implementing FMLASource, the staff was able to rely on the program's attorneys, FMLA experts and operations to review and manage leave requests.

Data and assumptions > No. of employees: 16,000 > Avg. quarterly program cost: $52,800 > Avg. salary: $45,000 ($21.63 hourly)

Percentage of approved cases > Total hours used > Average hours per employee > Total annual hours saved > Value of hours saved > ROI >

2Q06

98% 160,464 10.1

3Q06

76% 130,172 8.8 30,292 $655,216 12.41 : 1

4Q06

66% 105,444 6.3 55,020 $1,190,083 22.54 : 1

About FMLASource®

FMLASource®, Inc., is an affiliate of ComPsych® Corporation which offers an alternative to internally administering FMLA that reduces an organization's FMLA costs and liability. A service that reviews, approves, processes and tracks leave requests with the oversight of an expert legal staff, FMLASource helps organizations greatly reduce the amount of absences while protecting against legal action. ComPsych Corporation is the world's largest provider of employee assistance programs and is the leading provider of fully integrated EAP, behavioral health, work-life, wellness, crisis intervention services and outsourced HR solutions. Covering more than 25 million individuals and 7,600 organizations in 92 countries, ComPsych creates "Build-to-Suit" programs which help employers improve productivity.

Copyright © 2007 ComPsych Corporation. All rights reserved.

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