Does your company have a paid parental leave policy or is it considering implementing one? A Pew Research Center survey found that 82% of Americans believe mothers should be entitled to paid maternity leave and 69% believe fathers should have paid paternity leave. Yet there's no federal mandate.
Paid parental leave may sound like a costly proposition for employers, but it can provide value to your company — and may actually save you money in the long run. Let's take a look at the basic principles and benefits.
Practically every one of the nearly 200 countries in the United Nations offers paid parental leave to workers. The U.S. is one of only a handful of countries that doesn't. However, a limited number of states mandate paid family leave and some employers offer it to their employees even when they aren't required to do so by law.
The Family Medical Leave Act (FMLA) provides employees with up to 12 weeks of job-protected family leave on an unpaid basis if certain requirements are met. But FMLA applies only to employers with 50 or more employees. To qualify, employees must have worked for the company for at least one year and logged at least 1,250 hours in the previous year. Employees who work remotely must work at a location within a 75-mile radius of their employer's office. Leaves may be granted to employees to care for a newborn child, an immediate family member or themselves. Thus, the FMLA isn't limited to just parental leaves.
Generally, employers who offer paid parental leave provide one or more of these three types:
Some employees — particularly higher-level workers — expect and even demand paid parental leave benefits. It's easy to understand why. But how do such policies benefit employers? There are several potential payoffs, for example:
Reduced turnover. According to an American University study, close to 30% of women in the workforce leave their jobs within a year of having a child. A paid parental leave policy could encourage them to stay with your company. The March of Dimes Center for Social Science Research has estimated that paid parental leave can reduce turnover by as much as 50% over a five-year period. This may enable you to retain skilled workers and save money on the cost of training replacements.
Recruiting edge. There's fierce competition to hire the "best and brightest" just graduating from college or graduate school. Many applicants in this age group are likely thinking about having children in the next decade. Paid parental leave benefits can give your organization a leg up in recruiting talent.
Higher employee morale. Although morale is difficult to quantify, a paid parental leave policy can affect workers' feelings about their jobs. Parents of newborns who take paid leave may be more enthusiastic about returning to work because they've had time to recover physically and spend time together as a new family. High morale often results in increased productivity.
Also, employees who feel torn between working and staying home to care for young children are likely to be stressed. Whichever option they choose, their mental health may suffer. Paid leave gives them time to make informed decisions about their careers and family lives.
Positive impact on society. Paid leave benefits are particularly advantageous for lower-wage workers who may not be able to afford to take unpaid leave. If they don't take time off to care for new family members, those children may not get as good a start in life. If employees have to leave the workforce, they may require government financial assistance. So paid parental leave generally is beneficial for entire communities.
This is just a broad outline of paid parental leave policies. You can fine-tune a policy that meets your company's needs and complies with your state's laws. Contact us for help designing a plan that's both accommodating and efficient.
Get in touch today and find out how we can help you meet your objectives.
