Parental leave is a benefit that gives employees time off work surrounding the birth, adoption or foster care of a child.
The United States is the only wealthy country — and one of six countries overall — that doesn’t guarantee paid parental leave for its workers. Federal law does entitle employees to take 12 weeks of unpaid leave, provided they meet the eligibility requirements.
At least 11 U.S. states and the District of Columbia now require companies to provide paid family leave to eligible employees. Public opinion is on the side of wider-reaching reform too: About 82 percent of Americans support paid maternity leave, according to three different studies.
What is parental leave?
Parental leave is a benefit that provides employees time off work surrounding the birth, adoption or foster care of a child.
Parental leave can look vastly different depending on the state you live in and the company you work for. In this article we explain the importance of parental leave, the components of a good parental leave policy and why an investment in paid parental leave can give your company an edge over the competition.
What Is Parental Leave?
Parental leave is an employee benefit that provides employees protected time off work to care for a newborn child, adopted child or foster child. In the United States, the Family and Medical Leave Act (FMLA) allows eligible employees to take up to 12 unpaid workweeks of parental leave in a 12-month period starting on the date of the child’s birth, adoption or foster placement.
While paid parental leave may not be required under federal law, numerous companies offer this benefit; they see it as a way to recruit and retain talent and demonstrate their commitment to their employees’ work-life balance. Paid parental leave has become a popular tech industry perk, but it has been slow to spread to other sectors, as only 27 percent of private sector employees have access to paid parental leave, according to the Bureau of Labor Statistics.
Why Is Parental Leave Important?
Parental leave is beneficial for several reasons. For employees who take parental leave, the time off allows for formative parent-child bonding, which is important for a child’s cognitive, behavioral and social development. It also gives parents the space they need to navigate a big, stressful life event without having to worry about their job back at the office.
“A robust parental leave policy allows employees to put work where it belongs, on the sidelines,” said Kelly Scheib, chief people officer at Crunchbase. “It is crucial for their mental health and physical wellness at a time when both can be at risk.”
Paid maternity leave, in particular, improves health outcomes for mothers and their babies, including decreased infant mortality, less postpartum depression and a lower likelihood of rehospitalization after the pregnancy.
Parental leave plans can also help women on the career front. When California and New Jersey implemented paid family leave programs, researchers found that women were 20 percent less likely to leave the workforce.
How Does Parental Leave Work?
Employees who do not have access to paid parental leave through their companies can take unpaid time off through the Family and Medical Leave Act. The FMLA:
- applies to employees who work for a company with at least 50 employees;
- offers up to 12 weeks of unpaid, job-protected leave within 12 months of the birth, adoption or foster placement of a child
- protects employees from being fired for taking a leave of absence (but not from being eliminated as part of a company layoff).
A growing number of companies choose to provide their employees with paid parental leave. The details of those policies differ from company to company.
If an employee intends to take parental leave, they should notify their manager and HR department as soon as possible, no later than two months from their due date. This will give the employee and manager time to craft a coverage plan to handle the employee’s responsibilities while they are away.
When employees return from parental leave, managers should also help them readjust, or “re-onboard” when they return, said Allison Whalen, co-founder and CEO of Parentaly. Part of that re-onboarding process should include a “listening tour” with coworkers to learn what happened while they were away.
“Almost how companies invest money in new hire onboarding, they should also invest time and money in re-onboarding for folks coming back after they’ve been on an extended leave,“ Whalen said, adding that a strong coverage plan is “arguably the most powerful thing that a company can do to ensure return-to-work success.”
Some companies also provide support before and after the pregnancy by offering fertility resources, subsidized day care, lactation rooms in the office and allowing employees to bring their baby to work.
What’s in a Good Parental Leave Policy?
A good parental leave policy will give both parents plenty of time off, while offering support before and after the leave period.
Adequate Time Off
The big question in any parental leave policy is how much time should be offered.
To help companies get a sense of comparable policies, theSkimm, a women-centered media company, launched its #ShowUsYourLeave database, which has inspired more than 500 companies to share the details of their parental leave policies.
Atlassian, Etsy and Salesforce are toward the top spectrum, allowing 26 weeks for birthing parents. On average, though, tech companies on the coasts tend to provide 14 to 16 weeks of paid parental leave, while companies in the Midwest might offer slightly less, like 12 weeks, Whalen said.
Time for Fathers and Non-Birthing Parents
Companies are starting to realize the importance of paternity leave for fathers and non-birthing partners.
To help distinguish between maternity and paternity leave, many companies divide their parental leave time into two categories: medical leave, which is typically six to eight weeks, and parental bonding time, which usually lasts about eight weeks.
Mothers and birthing parents require both medical and bonding time, giving them 14 to 16 weeks off from work. Fathers or non-birthing parents would only need time for bonding, which is typically around eight weeks.
Some plans may still label these two parent categories as primary and secondary caregivers, but that language is increasingly being phased out in an effort to recognize that both parents are responsible for caring for their child.
“There’s a big push towards [the idea that] everyone is a caregiver,” Whalen said. “It’s not just mothers that are caregivers. We should be giving fathers the time to actually learn how to be a caregiver and have that time.”
Fathers don’t always take the full time allotted to them, though, since they might worry about being judged or falling behind on work, Whalen said. Researchers have found the average paternity leave in the U.S. lasts one week, while countries in the European Union average 6.3 weeks of paid paternity leave.
Split Time
Many employees want the ability to split their parental leave into multiple breaks.
Split time is most commonly offered to fathers and non-birthing partners who want to take off for the first few weeks surrounding their child’s birth but then take additional time off when their wife or birthing partner returns to work. This second leave time allows non-birthing partners to save on childcare costs, enjoy one-on-one bonding time with their child and lighten the load of their birthing partner as they return to work.
While taking multiple leaves does give parents added flexibility, it can be somewhat disruptive to teams that have to adjust staffing and operations around those employees.
Tenure Requirements
Some companies, taking cues from FMLA, require employees to work for the company for a year before they are eligible to receive paid parental leave. However, that trend is starting to fade, Whalen said, as more companies ease eligibility requirements.
The average tenure requirement is about four to six months, according to Parentaly data. Employees who are newer to the company will typically be able to receive a prorated amount based on their tenure.
Phased Return
When an employee returns from parental leave, they may still be exhausted from lack of sleep and disoriented from all the changes that have taken place while they were gone.
To help transition parents back to work, many parents are increasingly offering a “phase back to work” option that allows them to work part-time or flexible hours for the first month. During that time, they will typically receive full-time pay or a percentage of their pay.
“This is the first time, potentially, that they haven’t been with their child 24/7,” Whalen said. “This gets them back in and ramping back up while also not creating a massive overwhelm on the homefront.”
Additional Time Off
Companies should also specify whether they allow employees to supplement their parental leave with additional paid or unpaid time off. If they will allow employees to take additional time, they should specify how much extra time is available.
For example, a small startup that only has the capacity to offer eight weeks of paid parental leave might give employees the option to take additional unpaid time off or apply for short-term disability or FMLA.
Integration With State Requirements
The company should also specify how its paid parental leave program will integrate with the 11 states that offer paid parental leave as a governmental benefit. This benefit is funded by employee-paid payroll taxes, and some states also use a portion of employer-paid payroll taxes.
Companies with paid parental leave programs typically supplement any state funding to bring the employee up to their full salary. If the state benefit expires before the company’s allotted parental leave time has expired, the company will pay the employee’s full salary for the remainder of their time off.
One state, for example, provided roughly $1,000 per week to a Parentaly employee who took parental leave. Because of that funding, Whalen was able to reduce her contribution to that person’s salary and use those funds to hire extra help in the employee’s absence.
“I do think that, on more of a macro level, these states adopting these plans and subsidizing that will allow companies, especially small companies, to offer more generous paid leave,” she said.
Variable Pay
Companies should also specify how the parental leave will impact the employee’s variable pay, like sales commissions and bonuses. Some companies give employees the full bonus, while others do not.
“A lot of companies forget to have a policy, and then they leave it up to the managers to handle, which is really dangerous,” Whalen said.
Why Parental Leave Is Good for Business
Companies that offer paid parental leave demonstrate to employees a willingness to invest in their wellness and support them in their personal life.
HELPS WITH RECRUITING
Paid family leave is a strong recruiting tool. Employees not only research companies’ parental leave plans, they also ask about it in job interviews. One study found 90 percent of working parents would change jobs to receive better family benefits.
“In tech, it’s almost like the price of entry,” said Sandi Leung, senior vice president of employee benefits at Woodruff Sawyer. “You’ve got to be able to check that box because people who are searching for a job search for that benefit specifically.”
IMPROVES EMPLOYEE RETENTION
Companies that offer paid parental leave are less likely to see employees leave. That means less institutional knowledge is lost, and less time and money are spent on hiring, onboarding and training new employees.
Google, which now offers 24 weeks of maternity leave, saw parental leaves retention capabilities firsthand when it increased its paid maternity leave from 12 to 18 weeks in 2007. When it did that, it saw a 50 percent reduction in the rate at which new mothers quit the company.
By contrast, an ungenerous parental leave policy may cause employee resentment. Scheib, the Crunchbase chief people officer, said she almost quit a previous job that required her to return to work seven weeks after the birth of her daughter.
BOOSTS EMPLOYEE ENGAGEMENT
Employees who are supported by their organization during the birth of their child will likely feel relieved and thankful. That, in turn, can make them feel more engaged and motivated to do better work, Whalen said.
For example, Crunchbase offers 14 weeks of paid parental leave, along with remote and asynchronous work arrangements that offer flexibility to all employees, including new parents. Scheib said employees tend to be more engaged and motivated when they know their company has their back.
“The repercussions of not doing right by the employee in this moment is devastating for the company,” Whalen said. “Oftentimes companies look at the dollars and cents of how much that paid time costs, but what they’re forgetting is by making that investment in paid parental leave, you’re actually getting a huge ROI in the ongoing engagement and productivity because you’re you’re supporting this person in arguably one of the most important moments of their life.”
Frequently Asked Questions
How long is parental leave in the U.S.?
The Family and Medical Leave Act allows eligible employees who have worked at least one year for a company with at least 50 employees to receive up to 12 weeks of unpaid leave for the birth, adoption or foster care of a child. Paid parental leave is required by some states and offered through some employers, but such benefits are not required by federal law.
What’s the difference between parental leave and maternity leave?
Parental leave is a term that includes both paternity leave for fathers and maternity leave for mothers. Many policies will offer more leave time for birthing parents than non-birthing parents.
Who is eligible for parental leave in the U.S.?
Birthing and non-birthing parents who have worked at least one year for a company with at least 50 employees can receive up to 12 weeks of unpaid leave under the Family and Medical Leave Act. Some states require paid parental leave, but it is not required by federal law.
