Employers are expanding employee leave at a pace that their administrative capacity has not matched. New research from NFP, an Aon company and benefits consultancy based in New York, finds that only 26% of employers say they are very confident in their ability to administer leave accurately and in compliance with applicable law, even as the range of leave programs continues to grow.
The 2027 NFP US Leave Management Report drew on a benchmarking survey of 1,004 US employer respondents conducted in coordination with research firm Empatix. The sample skews toward smaller organizations, with 72% of respondents having fewer than 500 employees, which shapes the picture the data presents. Still, the core finding holds across sizes: the operational burden of managing leave is rising, and confidence in doing it accurately is not keeping up.
Among employers managing leave internally without dedicated software, 46% report spending three to five hours administering each leave request, up from 37% the prior year. Even employers using dedicated leave management software are not fully shielded. The report notes that nearly half of that group still spend three or more hours per request. The time cost alone signals a system under strain, but the compliance exposure is the more significant risk.
Leave administration involves the overlapping demands of the Family and Medical Leave Act (FMLA), state paid family and medical leave (PFML) programs, short-term disability coordination, and an expanding roster of jurisdiction-specific rules. A client whose HR team is managing all of that off the side of a desk, without dedicated systems or outside support, is carrying real legal and financial exposure.
“Leave is not just an administrative obligation,” said Maria Trapenasso, senior vice president and national practice leader for talent solutions at NFP in New York. “It’s a critical part of the employee experience and an important tool for attracting, supporting and retaining key talent.”
The sharpest example of that exposure in the 2027 report is menopause. More than half of employers surveyed, 54%, said they were unaware of emerging state and local menopause accommodation legislation. That is a significant knowledge gap at a moment when the regulatory landscape is actively shifting.
Rhode Island became the first US state to require workplace accommodations for menopause and related conditions in June 2025. Illinois followed with the Menopause Equity and Care Act, signed in 2026. Philadelphia enacted protections in late 2025, and Virginia passed related legislation before the governor vetoed it in May 2026.
More than 60 pieces of menopause-related legislation were introduced across states in 2026 alone, according to Bloomberg Law tracking, spanning accommodation requirements, insurance coverage mandates, and anti-discrimination protections.
The NFP data suggests many employers have not yet absorbed this. The emerging laws do not, for the most part, create new categories of leave. Instead, they require employers to treat menopause-related symptoms as qualifying conditions for existing accommodation and workplace adjustment processes, the same kind of interactive process already required under the Americans with Disabilities Act (ADA). For employers who haven’t recently audited how accommodation requests are handled, the risk is less about a new obligation than about an existing one that now applies more explicitly to a larger group of employees.
Only 7% of employers in the NFP survey currently offer menopause accommodations, though 34% say they are open to doing so within five years. The gap between where employers are now and where the regulatory trend line is heading is the kind of runway that benefits advisors can use productively with clients, well before a complaint or a state audit surfaces the problem.
Not all movement in the leave landscape is regulatory. In bereavement, employer-led expansion is already outpacing compliance pressure. The NFP report found that 35% of employers offering bereavement leave now extend it to cover miscarriage or failed IVF, up from 28% when NFP first measured it in 2023. That movement reflects both changing employee expectations and a broader policy trend.
Bereavement benefits are attracting significant employer attention heading into 2027, with 84% of employers saying they plan to expand bereavement support, according to a 2026 survey by Empathy, a New York-based bereavement platform. The gap between stated intent and actual policy change is where most employer leave programs stall.
The NFP report’s overall picture is one of expansion without infrastructure. More employers are offering more types of leave, to more employees, across more states, while their ability to administer those programs consistently and compliantly is not growing at the same rate. Roughly three in 10 employers outsource leave administration entirely, while 69% manage it internally, often without dedicated resources. Of those who have considered outside support, cost is the primary barrier, cited by 66% of respondents.
Under the FMLA, employers found in violation can face back pay, liquidated damages equal to the back pay amount, attorney’s fees, and civil penalties, meaning a single mishandled leave can cost multiples of the original wages at issue. That exposure grows with each additional state PFML program a client operates under, and advisors who can map a client’s leave stack against their actual compliance posture are offering something meaningfully different from a vendor comparison. A leave audit is a natural starting point.
