Should My Company Offer Parental Leave?

 Parental Leave - Here to stay or just another trendy topic?

If you’ve been in Management or Human Resources more than a few years, you’ve seen a lot of news about hot new perks that employers should be offering, often fueled by big tech companies in Silicon Valley. It’s hard to know what an employer seriously needs to consider, and what a passing fad is. 

WHO’S OFFERING PAID PARENTAL LEAVE?

According to TheStreet.com article, “8 Best Companies for Paid Parental Leave” 3/16/16,"  Netflix now offers paid parental leave for up to one year, beating out Etsy’s 6 month paid parental leave, and Facebook’s 17 week leave.

But it’s not just the tech giants that are offering paid leave.  

Duke University offers 3 consecutive weeks of paid parental leave after birth/adoption. Coca-Cola recently announced that beginning January 2017 it will offer 6 weeks of paid parental leave. And San Francisco passed a law in April 2016, supplementing the California paid leave law, ultimately giving new parents 6 weeks of paid leave at 100% pay.

According to the SHRM 2015 Employee Benefits research results, the percentage of companies offering paid family leave was up to 21%, with paid Parental leave at 17%.  As Dads become more involved in caregiving, and paid leave for men is offered by more companies, the stigma of a man taking parental leave may eventually start to fade. Perhaps society is slowly turning to a new mentality where men are encouraged to take time to bond with baby, rather than stigmatized.

Each state has different guidelines under the Family and Medical Leave Act. Cick here to see Wisconsin's statute.

THINGS TO CONSIDER:

If Paid Parental Leave is gaining ground with employers, even outside the tech industry, what should an employer consider before implementing such a policy?

• The length of the leave
  • The length of time that companies are offering varies from a few weeks to over a year.  Your company, and each department, will have unique needs.  An employer will want to settle on an acceptable timeframe across all departments.  Trying to offer different policies for different departments or classes of employees may cause morale issues at the least, and discrimination accusations at worst. 

• Can your culture support it? 
  • Is the company truly ready to support men taking leave or will there be a stigma preventing them from actually taking the time off?  At Facebook, parental leave is just called the “four month leave” rather than “maternity” or even “parental” leave and taking the full time off is supported from the top down.  Will employees without children resent new parents taking time off?  How will workload be redistributed when an employee is out an extended time?

• The makeup of your workforce 
  • What percent of your workforce is of child bearing age? If it is significant, will paid parental leave be too expensive?  Then again, if you hire and hope to retain a lot of younger workers, should paid parental leave be a significant part of your recruiting/retention strategy?  

• Cost 
  • Consider lost productivity, and wages paid to the employee on leave while the work is being done by someone else. Smaller companies face a heavier burden when an employee is out an extended period, with fewer people to take up the missing employee’s workload.

• Competition for staffing 
  • Will offering parental leave give you the edge in recruiting/retention? Consider other firms in your industry or geographic region. Consider the competition you face in hiring.  In a tough labor market, a program like this could impact where top applicants choose to go, or stay.

• Coordination with Disability benefits 
  • How will paid parental leave work with your current disability plan? If your disability plan pays less than 100%, will your new parental plan top off that benefit to 100%?  If not, is that discriminatory against women, when you give new dads 100% pay? 

• Alternatives 
  • Consider alternatives like allowing new parents more flexible scheduling, reduced work hours, telecommuting, etc. If you decide to not implement a Paid Parental Leave plan, are there other options you can consider to help moms and dads with work/life balance?

Paid Patrental Leave is not widespread among employers yet, but it does appear to be gaining momentum.  It’s a topic worth watching and considering, at least on an annual basis, as part of your benefits and staffing strategies. 

MORE INFORMATION:

If you have any questions about parental leave or how it may affect your business, please contact your

Hausmann-Johnson Insurance partner.