The United States is woefully behind when it comes to parental leave. Currently we are one of the only countries that does not mandate paid leave of any kind. What’s more is that right now only 12 percent of private sector workers have access to paid family leave benefits through their employer. This leaves thousands of new parents with the challenge of caring for a burgeoning family while trying to earn an income.
While we still have a long way to go, the United States is making progress. Three states — California, New Jersey and Rhode Island — currently offer paid leave programs funded through employee-paid payroll taxes. New legislation requiring paid leave has been rolling out across the country, with New York City and San Francisco recently enacting paid leave policies. Additionally, more and more heavy-hitting companies like EY, Coca-Cola, Netflix and Facebook are also getting on board, including parental leave policies for both parents.
Though adoption of paid leave policies is a clear benefit to employees, it begs the question: what is the real impact of parental leave on businesses?
Parental leave can be a boon to your business.
For small to medium-sized businesses, the impact of adopting a paid family leave policy can be significant. Budgets are already tight in a competitive market and staying compliant with state and federal medical and unpaid leave regulations can be incredibly complicated. However, incorporating paid family leave may also benefit your business.
For one, the flexibility parental leave affords can lead to increased productivity when exhausted new parents have some time off to rest and organize family responsibilities. Paid leave benefits can also help employers garner employee loyalty and recruit top candidates in the global market. In fact, according to the White House’s Summit on Working Families, nearly half of parents have chosen to pass on a job that would conflict with family obligations.
So how can you successfully develop a paid family leave policy? Here are three ways to make the transition to providing paid parental leave more successful:
1. Know the laws.
First, know the laws and regulations for the states and cities where you conduct business so that you can develop your program in compliance with those laws.
For most businesses with 50 or more employees, you are required to comply with numerous federal regulations, one of which is the Family and Medical Leave Act. This act requires that employers provide 12 weeks of unpaid, job-protected leave per year for eligible employees. While you aren’t required to offer paid leave, you are required to give employees 12 weeks off for parental leave.
To make sure you’re compliant, it may be worth the expense to hire an HR consultant or legal counsel who can help you sort through the nitty gritty of the regulations that pertain to your company, especially if you operate in multiple states or cities.
2. Know your budget and business goals.
Additionally, it is critical to know exactly what kind of policy you can afford to adopt. Having the best leave policies in the world aren’t going to do your workforce any favors if your company folds. Before you implement your paid leave plan, talk to a financial advisor so you can plan out your business strategy and know all of the variables involved, such as how many weeks and what percentage of pay you can actually provide.
Ideally, every business leader should consider parental leave, along with other paid time off programs, in the earliest stages of the business. You may not be able to afford to have a fully paid leave in the beginning stages, but with time you can scale your leave policy as your business grows.
In our experience working in small businesses, providing paid parental leave was not an option. We were candid and asked employees to suggest options that might work for him or her. We got creative and found workable solutions, such as allowing new parents the option to temporarily work part-time or telecommute and providing longer lunch breaks so parents could see their children during the day. Giving employees the opportunity to suggest flexible solutions to juggle their work and personal lives paid off in our business.
3. Know how to divide up the workload.
Lastly, it is crucial you work with employees going on leave to ensure their work responsibilities that need to be covered are temporarily divided among other team members, or clearly articulated to a temporary employee. If you don’t have defined job descriptions, ask employees requesting leave to write out each of their responsibilities, who will be covering for them and any necessary information others will need to know. For those who are covering these tasks, make sure you express your appreciation while also helping them balance their workloads.
Plan ahead by starting the conversation with an expectant parent as soon as possible after the employee announces the news. This will allow you to develop a workable plan for managing your business operations while meeting the employee’s time-off needs.
Ready or not, parental leave is on the way.
Parental leave is coming our way and businesses need to be ready for it. These changes in policy are critical to promoting the personal well-being and success of the millions of working parents in our country. By supporting your working parents with compliant and flexible leave programs when they need it the most, you create a more productive and engaged workforce, enhancing your employment brand and corporate reputation. Everyone wins.
Writer: Laura Kereke and Christina McShane