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FMLA cost $21 billion last year

Compliance with the Family and Medical Leave Act (FMLA) cost employers $21 billion last year in terms of lost productivity, continued health benefits, and labor replacement, says a report from the Employment Policy Foundation (EPF).

     EPF estimates that lost productivity due to FMLA leave cost firms $4.8 billion in profit in 2004, equivalent to 0.6% of before-tax profits. Employers also spent $5.9 billion to continue health care benefits for employees taking leave, and $10.3 billion on temporary workers and overtime to cover for absent workers. The telecommunications, manufacturing and transportation industries incurred the highest costs.

     The report also shows that FMLA leaves are becoming more frequent, with 35% of employees who used family and medical leave using it more than once last year compared to 25% four years ago. Overall, 14.5% of employees took FMLA leave in 2004.

     Thirty percent of FMLA absences lasted five days or less and 20% lasted one day or less, says EPF, meaning that intermittent leave is common. The average duration of FMLA leave was 10.1 days.

     For the report EPF surveyed 110 employers with approximately 500,000 total employees. Click here for more information about the EPF report.