More Employers Offering Paid Parental Leave Benefit

By | June 29, 2018

More than one in three U.S. employers offers paid maternity leave beyond the amount required by law, up from one in six earlier this decade, according to new data from the Society for Human Resource Management.

All 20 of the biggest companies in the U.S. now offer at least some paid maternity leave, with a handful of those employers offering time off for more than just the birth mother. Benefits such as paternity leave and “parental leave,” which includes new adoptive parents and same-sex couples, have also become more common.

So what’s happening? Companies haven’t necessarily discovered a new appreciation for working parents. This new-found generosity is generally self-serving—it’s meant to keep workers happy without raising their wages. More than 700 of the 1,012 organizations surveyed by SHRM said that increased benefit offerings in the last year were meant specifically to retain talent.

“Money is not the way to motivate people,” contends Liz Supinski, director of data science at SHRM. Benefits such as paid parental leave “may be more psychologically appealing” than a raise, she said. Employees concerned about rising health insurance costs, buying a home or managing debt may beg to differ, however.

The Family Medical Leave Act allows new parents who qualify to take up to 12 weeks of unpaid leave to care for a newborn, but there’s no U.S. statute mandating leave time be paid. Several states and cities have passed their own paid leave laws, though. This month, Massachusetts became the sixth state to have a paid family leave law on the books. New parents get up to 12 weeks of paid time off to care for a sick family member or a new baby.

Such laws can motivate companies to adopt the benefit in order to stay competitive, Supinski said, even ones in less employee-friendly states and cities. Plus companies that have offices in multiple states tend to craft their policies to comply with the strictest laws.

Nevertheless, most Americans aren’t getting paid time off to care for newborns. As of 2017, only 15 percent of U.S. workers got any paid family leave, according to the Bureau of Labor Statistics, up from 11 percent in 2012.

Even companies that offer parental leave don’t always offer it to all workers. A survey of 385 employers from World at Work last year found that about 22 percent of companies which offer paid leave only give it to some workers. Typically, part-time workers are excluded.

That’s slowly starting to change. This year Wal-Mart and Starbucks both amended their paid leave policies to include more workers. Starbucks’ policy is now available to most hourly workers.

Still, middle- and upper-income workers are far more likely to have access to paid leave. Only about 6 percent of U.S. low-income workers do, according to Paid Leave for the U.S. Supinski said that’s pretty typical: “Higher compensated workers have access to more classes of benefits.”


Topics USA Commercial Lines Business Insurance

Was this article valuable?

Here are more articles you may enjoy.