The Workflex in the 21st Century Act: Some of the Details


On January 30, I wrote What is the Workflex in the 21st Century Act? as an introduction to a bill in the House of Representatives that the Society for Human Resources Management  (SHRM) is supporting. I think is certainly worthy of consideration by employers. If you have not read my overview of the bill click on the link above and see what you think. In this post, I am going to fill in some of the detail.

Amendment to ERISA

ERISA, or the Employee Retirement Income Security Act, “…protects the retirement assets of Americans by implementing rules that qualified plans must follow to ensure plan fiduciaries do not misuse plan assets. Under ERISA, plans must provide participants with information about plan features and funding, and furnish information regularly and free of charge.” (According to Investopedia.) It is the law that defines what a plan must do to be “qualified”, which basically says the plan must be for the benefit of the employees. The main purpose of the Workflex Act is to set up a Qualified Flexible Workplace Arrangement (QFWA) plan.

A new employee welfare plan

As a result of the amendment to ERISA, there are a number of requirements of a QFWA. The first of these is that an employer must administer a QFWA in accordance with a written plan, just as a health plan or retirement plan. A plan document must be created and given to employees. This plan document must describe the compensable leave and flexible work arrangements that are available to the employee. The plan must satisfy all applicable employee welfare plan requirements, including the reporting and disclosure, fiduciary responsibility, and enforcement provisions of ERISA. The plan must also specify that the employer’s decision to adopt and maintain a QFWA is totally voluntary, and the requirements of the Act only apply to those employers who have chosen to adopt and maintain a QFWA plan. Thus no employer, large or small is required to have a QFWA.

Compensable leave requirements and Workflex options

The major components of a QFWA involve requirements of a minimum amount of paid leave that each company must provide. A QFWA also has a specific requirement for “Workflex” options. These requirements are dependent on the number of employees each employer has, as well as the length of service of those employees. I will provide the specifics of both of these requirements in following blog posts this week.

Purpose of the Act

Remember, the purpose of the Workflex Act is to provide a way for employers avoid having to comply with a multitude of different jurisdictional requirements for providing paid leave. This act supersedes state and local paid leave laws. Any company that complies with this act does not have to comply with the other laws, making handling paid leave easier and more uniform.

Originally posted on Omega HR Solutions blog.


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