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Why It's Time to Start Offering Employees Paid Parental Leave

July 29, 2021

paid parental leave

Think about the major milestones you’ve had in your life.

Maybe it’s receiving the funding you needed to build your company from the ground up, buying your dream home, or making a move to a brand new city.

Whatever the case may be, many life achievements change everything in an instant. Another major turning point in one's life is deciding to have or bring a child into your life/family. Not only is this a big personal decision, but it’s a professional one, too.

In many instances, whether or not an individual decides it’s time to have or adopt a child is dependent on their employer, if paid parental leave is offered, and how much they’re offering. As an employer in the United States, it’s up to you to decide whether or not to include paid parental leave in your compensation and benefits package.  

What is paid parental leave?

Paid parental leave, sometimes referred to as family leave, is an employee benefit available in many states in the U.S. It may include maternity, paternity, and adoption leave to specify when families can take paid time away from work to care for their new child.

In the United States, the 1993 Family and Medical Leave Act (FMLA) is the only federal legislation that guarantees leave to take care of a newborn, a newly-adopted child, or a family member ill with a serious health condition. This legislature allows for 12 weeks of unpaid, job-protected time off for both parents. 

There are some stipulations to the law. It only covers employees who:

  • Work at a company with at least 50 employees
  • Have worked for at least a year at the company, with a minimum of 25 hours per week before leave

Because this mandatory 12-week leave is unpaid, it’s common that new parents cannot afford to take it. Offering paid parental leave is up to the discretion of an employer. This act also includes time to care for a spouse, child, or parent with a serious health condition, sick leave to recover from a health condition preventing them from working or to take military family leave.

66%

of people who have access to FMLA leave don’t take it because they cannot afford to do so.

Source: U.S. Department of Labor

As of October 1, 2020, there’s also the Federal Employee Paid Leave Act (FEPLA) that makes paid parental leave available, but only to specific categories of Federal civilian employees. This includes up to 12 weeks of paid parental leave in connection with the birth or placement (for adoption or foster care) of a child on or after October 1, 2020.

Who is eligible for paid parental leave?

Unfortunately, there is no fast and easy answer for who is eligible to take part in paid parental leave. A lot of it will depend on where you live. In the United States, it depends on the state you live in. If it isn’t mandatorily required by law for an organization to provide its employees, it will also depend on what your company chooses to offer as part of its compensation and benefits program.

Did you know? Only nine states (California, Colorado, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, and Washington) and the District of Columbia offer paid parental leave.

Even though only these nine states and the District of Columbia offer paid parental leave, that could change. If President Joe Biden’s proposed American Families Plan, part of the Build Back Better initiative, passes and is approved by Congress, the $1.8 trillion plan, which is set to roll out over 10 years, includes universal paid family and medical leave. 

The website for the American Families Plan states that it will “Provide comprehensive paid family and medical leave, allowing workers to take the time they need to care for a new child, their own serious illness, or a seriously ill loved one.”

Elements of a paid parental leave policy

When an organization decides to offer its employees paid parental leave, certain regulations or stipulations should be included within the policy. 

The policy will have eligibility details like:

  • If an employee has to work at the organization for a certain amount of time, like 12 months, before being eligible to take part in the policy
  • If the policy is available to both full- and part-time employees 
  • How many weeks of paid parental leave they intend to offer employees 
  • If an employee can be granted more than one stint of paid parental leave over the course of one calendar year.
  • If the employee will be compensated 100% of their weekly pay or a portion of the weekly pay. If a portion is decided upon, how much will be paid out?
  • If the paid parental leave can be taken at one time or broken up during the course of one calendar year or 12-month period
  • How much notice should an eligible employee provide the organization that they’ll need to take part in the paid parental leave policy

Did you know? In 1974, Sweden became the first country to offer fathers the right to paid leave after childbirth and adoption. Fast forward to 2021, and Swedish parents are entitled to 480 days paid parental leave.

Employers who utilize benefits administration software can ensure that their paid parental leave policy is both administered correctly and comply with government regulations. Having these tools makes it possible to manage this policy and the other employee benefits offered through an administrative dashboard. 

Paid parental leave policy example

If your company is interested in creating a paid parental leave policy, it may be helpful for your human resources department to work off an example that specifies the amount of leave available, as well as qualifying and eligibility requirements.

Full-time members who have been employed by X company for twelve (12) consecutive months can take up to ninety (90) business days of fully paid time off. This leave is available for a 12-month period following the birth of a child, the date of an adopted child, or the date of a foster care placement and must be taken in no less than 2-week increments.

The purpose of our paid parental leave is for new parents to have the time to care and bond with a newborn, newly adopted child, or a newly placed child. This plan will run concurrently with the Family and Medical Leave Act (FMLA), if applicable. 

If a team member chooses to take 90 consecutive business days of leave are also eligible for an eight-week gradual return-to-work schedule at the end of the leave. This includes:

  • Weeks 1-4: working 16-hour workweeks, remotely
  • Weeks 5-8: working 32-hour workweeks, remotely

Any time away from work after the 90 business days will be considered unpaid leave. Team members partaking in the paid parental leave policy must provide at least 30 days’ notice to their manager when they plan to begin and end their parental leave.

If you have any questions regarding the eligibility requirements, please see your manager.”

Note: This example is if a company is within a state where no mandatory rules or regulations surround paid parental leave and they’re offering their own unique policy to their employees. 

Benefits of offering paid parental leave

There’s no denying that offering new parents paid time off to care for newborn or recently adopted children contributes to healthy development, improves maternal health, and enhances families’ economic security. In addition, there are many benefits to an employer once a paid parental leave policy is offered to its employees.

Productivity boost

Being a parent is a tough job – and employers should recognize that. From late nights to unexpected doctor visits, it’s likely that new parents will be mentally and physically exhausted.

A paid parental leave policy created with employees in mind can ensure they come back feeling as well-rested as possible. This allows team members to start each workday feeling as refreshed as possible, with a low-stress level, giving them the energy they need to be productive in their role.

Increased employee retention

Another parental leave benefit to consider is that it could increase employee retention. A recent study based on 440,000 working parents by Great Place to Work shows that employees who work for companies that offer generous paid parental leave and other parental benefits report higher retention and engagement rates.

30%

of working women left their jobs after giving birth.

Source: Washington Center for Equitable Growth

When their employer gives an employee the support they need to care for a newborn or an adopted child, they can return to work after spending multiple weeks bonding with the new member of the family. 

Better work-life balance

Employees partaking in paid parental leave don’t have to choose between caring for a newborn or after the placement of a child and keeping their jobs. They’re able to take the extended leave they need, with pay, without feeling stressed about money or overworked at their job. Instead of feeling rushed to return to the workforce, both parents have peace of mind knowing their career is waiting once the leave period is over. 

Having this policy not only promotes a healthy work-life balance but providing this flexibility in the workplace can also improve employee mental health, making them better parents in the long run.

Improved employee morale

When a company offers paid parental leave, it shows that they value their employees, appreciate all of their hard work, and realize how important it is to have a family. When employees feel this appreciation, the organization then sees improved morale from their team.

“Companies that offer paid parental leave show they value employees and their families. This program provides health benefits for the mother while giving parents time to bond with their new child.” 

Alyssa Kowalczyk
Human Resource Generalist of Control Solutions, LLC

Reduced turnover

Organizations offering paid parental leave reap the benefit of retaining workers who have the knowledge and skill set specific to a particular role within their company. Instead of having an employee decide to leave the organization after giving birth or adopting a baby, they return once their leave has ended, meaning the company doesn’t have to bear the financial burden of finding and training a new employee.

A new bundle of joy!

Paid parental leave gives new parents the chance to develop new skills, like changing a diaper and mastering feeding. While these skills may not be the most applicable to their career, they’re just as important. As an employer, providing your team the chance to take advantage of paid parental leave can genuinely make a world of difference to not only them but to their new family member, too.

Need one more reason to offer paid parental leave? It helps your organization build a strong company culture in a modern workplace. Now is the time to discover how.

benefits administration software
Happy parents. Productive employees.

Utilize benefits administration software to create a comprehensive paid parental leave policy for your employees.

benefits administration software
Happy parents. Productive employees.

Utilize benefits administration software to create a comprehensive paid parental leave policy for your employees.

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