The Bill & Melinda Gates Foundation made headlines earlier this year for making a drastic change to its paid family leave policy. In 2016, the nonprofit was lauded for bucking the trend and offering 52 weeks of paid family leave to new parents. But it turns out, that was too much.
“We received feedback and saw in practice that a year away was more disruptive than we anticipated,” explains Steven Rice, chief human resources officer for the foundation, in this LinkedIn post. “(Managers) noted the difficulty of identifying and onboarding backfill talent, facilitating a sufficient transfer of knowledge, and re-onboarding returning employees, especially if teams, business goals, or individual roles changed during a year away.”
The Gates Foundation now offers 26 weeks of paid family leave, which is still above and beyond what the majority of U.S employers offer. The Family and Medical Leave Act (FMLA) requires businesses with more than 50 employees to offer 12 weeks of leave to their employees, but it doesn’t have to be paid. For businesses that are smaller than that, there are no rules to follow. Family leave (and whether to pay for it or not) is a decision left up to the employer. So, how much leave is right for your workforce?
The Current Parental Leave Landscape
To start, let’s examine the current landscape. The median length of leave for a mother after the birth of a child is 11 weeks, according to a 2017 Pew Research Center survey. That includes both paid and unpaid leave, but most likely it’s the latter. Paid leave is not federally mandated, and only 17 percent of American workers have access to paid family leave from their employers, according to the Bureau of Labor Statistics.
But that’s changing, says Michelle Thompson, director of human resources for XMI. “Employers are increasingly offering these benefits because today’s workers, many of them millennials who are starting families, see it as a priority. Companies are realizing that paid parental leave has to be part of the benefits package.”
The 2018 Employee Benefits Survey from the Society of Human Resources Management found that the number of companies offering paid maternity leave jumped from 26 percent in 2016 to 35 percent last year. Paid paternity leave and adoption leave also made significant gains over the same time period, with nearly 30% of employers now offering these paid benefits.
Efforts in Washington are also underway to allow new parents access to paid leave. The Family and Medical Insurance Leave (FAMILY) Act would provide new parents, sick people and those with sick family members up to 12 weeks of paid time off. The insurance program would be paid for through payroll deductions, in the same way Social Security or Medicare work now. Another bill, the Economic Security for New Parents Act, would offer new parents the option of using Social Security benefits, which normally would not be available until retirement, to fund their parental leave.
Determining the Right Leave Policy for Your Company
In the meantime, companies should balance the desire to offer paid leave with an ability to do so. “Most companies can’t realistically offer a ton of paid leave without taking a hit to the bottom line,” Thompson says. “But that doesn’t mean they should ignore the demands of workers, who are now looking to employers for at least some paid leave.”
Thompson adds that the typical company she works with offers between two and six weeks of paid leave.
In some cases, employers will also allow the new parent to work part-time for a period of time or have the option to work from home. “This can be a win-win,” she says. “The company gets the benefit of a productive employee and the employee can continue earning wages.”
Thompson also recommends looking into short-term disability insurance. While not equal to family leave, it can offer paid benefits, usually about 60-70 percent of an employee’s wages, to an employee who just gave birth. The employee’s doctor determines the length of leave.
Thompson notes that this is also a more equitable approach, because the short-term disability insurance would apply to all employees, not just to those who give birth. “When you offer paid leave to new parents but not to someone who had surgery, for example, it can feel like you’re picking and choosing which employees you care most about.”
That’s also the reason Thompson prefers the family leave, as opposed to maternity. “Female or male, birth or adoption, any employee who now has a child in their home should benefit,” she says.
Need help developing your family leave policy? As part of our human resources outsourcing or PEO services, XMI can help you develop a policy that reflect the needs of your workforce. Email us at firstname.lastname@example.org or call 615-248-9255.