Lessons and stories about business operations related to managing, leading, and developing people.

What Nobody Told You About Parental Leave

What Nobody Told You About Parental Leave

I wrote this piece based both on research and personal experience. Regardless of your view on this topic or current parental leave policy, I hope this sparks a conversation about how all employees — parents and non-parents — can help each other succeed in the workplace.

No matter what your policy is, you can easily manage and track employee benefits in Allay. Learn more >

Before my first child was born — in 2013 — I didn’t think much about my employer’s parental leave policy. As it turned out, neither had they, as I was the first person on my team to get pregnant. Three years and three kids later (I’ve since had twins), I still feel that parental leave is one of the most complicated policies both HR departments and employees have to figure out, often with limited resources.

Sadly, parental leave has gotten a lot of attention in the U.S. — and not for great reasons. Our country’s policy is inarguably the worst “one of only three countries to offer no paid maternity leave.” Giving parents paid leave — and more of it — might not seem like your problem, or something that will benefit your company. But there are many, many reasons (both moral and financial) to not only urge your local government to update what President Obama has called “Mad Men”-era policiesbut to also think about how you can better take care of the parents who work for your company. In the long-term, better parental leave is a win-win for you and your employees; just ask companies like Google, Facebook, and Goldman Sachs.

In this post, I’m going to give you an overview of parental leave in the U.S., how we stack up against other countries, and four ways you can prepare your company and implement benefits that take care of your employees.

The embarrassing truth

The data is staggering: the Family Medical Leave Act (FMLA) — which only passed in 1993, mind you — offers “unpaid leave of up to 12 weeks a year to care for yourself, a child or a family member.” Before you get too excited or dismayed, you should know that it’s limited to individuals employed by companies with over 50 employees who work within a 75 mile radius of their job. So someone working for a company with 45 employees, or perhaps remotely, are left behind. FMLA is also, after all, unpaid; so even if an employee does qualify, they’ll have to be in the financial position where they can afford to skip paychecks for 12 weeks.

But there are even more limitations to FMLA. To qualify, an employee must have also worked for a company for a minimum of 12 months, otherwise, they’re simply out of luck. According to the U.S. Department of Labor, just “12 percent of U.S. private sector workers have access to paid family leave through their employer.” And according to the National Center for Health Statistics, 33% of working mothers don’t take any time off at all.

If your company employs less than 50 employees, offering paid leave — and really, any leave at all — to your employees is entirely in your hands.

What does this mean? If your company employs less than 50 employees, offering paid leave — and really, any leave at all — to your employees is entirely in your hands. If you live in California, New Jersey, and Rhode Island, the only three states to offer any amount of mandatory parental leave, you’re required to give employees between 4-6 weeks off when they have a baby either naturally or through adoption, depending on the state. How does this stack up to other countries?

*Source: http://www.oecd.org/els/soc/PF2_1_Parental_leave_systems.pdf

According to the Organisation for Economic Co-operation and Development (OECD), additional benefits and financial support can be provided by local and state governments, as is the case in California. Some countries are progressive enough to consider that new dads not only deserve time off, but greatly benefit their family and their relationships with their children by taking it. But we’re not one of them.

Who’s footing the bill?

Only 16% of companies in the U.S. offer paid maternity leaveand even then, policies vary greatly with many women supplementing leave with unused vacation days and others still, relying on SDI (state disability leave) which includes childbirth and postpartum recovery, as diagnosed by a doctor. SDI policies are also mandated by your insurance provider — in some cases, the premiums are paid by the insurance and in others, the employer.

The three states that offer employees paid leave (California, New Jersey and Rhode Island)  fund these programs by withholding employee wages. “The programs are administered by states’ unemployment insurance agencies in conjunction with temporary disability insurance programs.” Employee contributions to fund these programs have been shown to be minimal. By contrast, Canadian parental leave is mandated by provincial employment insurance plans, offering new mothers between 17 and 52 weeks of leave, with job protection.

According to the New York Times, “opponents of paid leave say it is an economic burden that can be expensive for businesses” but economists have found that this isn’t actually the case. In fact, mothers who take time off are more likely to go back to work, clock in longer hours, and earn more wages over the course of their careers.

Changing demographics and what they mean for your parental leave policy

According to Pew Research Center, “40% of all households with children under the age of 18 include mothers who are either the sole or primary source of income for the family.” And yet with current policies,43% of women who have children don’t return to their jobs for a variety of reasons. Those who choose to reenter the workforce in later years find doing so difficult. The shifting roles of both women and men demand that we implement more supportive and flexible policies to allow parents to take time off.

Thankfully, change is coming, albeit slowly. At the very least, U.S. parental leave policy has been at the forefront of political discussions. If you haven’t been paying attention, democratic presidential candidate Hillary Clinton has proposed a plan that would guarantee mothers and fathers up to 12 weeks of paid family and medical leave, which would include covering at least two-thirds of their wages during this time. Bernie Sanders also supports offering 12 weeks of paid family leave. The only Republican candidate to support paid family leave is Marco Rubio, who dropped out of the race in March. The others don’t support any kind of national policy.

The shifting roles of both women and men demand that we implement more supportive and flexible policies to allow parents to take time off.

But the tides are turning on the state and city level, too. Most recently, San Francisco was the first city in the U.S. to pass legislation approving 6 weeks of fully paid family leave for both mothers and fathers, same-sex couples included.New York State Legislature also finalized a budget deal that mandates paid family leave for up to 12 weeks. What’s so revolutionary about it? It eliminates many of the limitations of FMLA, including the mandate that employees who work for companies with fewer than 50 people are ineligible to participate in benefits. It also covers both full-time and part-time employees. Of course, even these groundbreaking policies are a far cry from what most mothers and some fathers get around the world.

Are these breakthroughs a sign that change is inevitably coming? It’s hard to say, and some argue that a universal overhaul of U.S. parental leave policy is unlikely.

But as decision makers in our companies, we can do a few things to move the needle.

  1. Educate yourself about your state’s policies. Know what benefits you’re legally obligated to provide. You can take a look at a state-by-state breakdown on the NCSL’s website.
  2. Talk to your employees, especially if your company is on the smaller side. Understand what their needs are and how you can reasonably accommodate time off and/or a flexible schedule.
  3. Stay ahead of the game to make sure transitions are smooth if you’re able to give employees time off to bond with their baby. Put a transition plan in place, including coverage for key responsibilities by other employees.
  4. Communicate your policies. As more progressive companies offer employees better benefits, including those that allow them to take time off to take care of their families, codifying and sharing your policies with potential candidates can give you an edge in recruiting. Open and honest communication can also help you retain some of your best employees (yes, many of them are parents!).

Lastly, if you’re thinking, “we’re too small to think about this yet,” remember that it’s never too early to put plans for benefits in place. Your employees will thank you later and likely repay you with loyalty, leadership, and good work.

No matter what your policy is, you can easily manage and track employee benefits in Allay. Learn more >

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