Many business owners think they’re doing the right, progressive thing by offering a generous paid maternity leave as part of their benefit package. But there’s a better option for business owners to consider: parental leave.
This is the practice of offering time off after the birth or adoption of a baby for all new parents, regardless of gender.
Increasingly, companies are transitioning to parental leave, as mothers and fathers share parenting duties more equitably. The practice also includes adoptive parents and same sex couples.
As a bonus, offering parental leave helps keep your company out of legal trouble, because maternity leave policies, which give more time off to mothers than fathers, may put your company at risk for a discrimination charge.
That’s why it may be worth adopting parental leave, for the good of your employees and your company as a whole.
What exactly is parental leave?
There’s still some misunderstanding about what parental leave is and how it’s different from maternity leave.
Maternity leave covers time off for mothers to recover from childbirth and bond with their newborns. Many companies offer paid pregnancy-related medical leave for pregnancy and childbirth as part of their short-term disability insurance. Although this favors female employees, it may not be considered discriminatory.
But for the sake of this blog post, we’re talking about parental leave – time off to bond with a newborn or adopted baby. Research shows that parental bonding is critical to the health and well-being of children, and parents as well.
The shift to parental leave
Unlike many other countries, paid leave to take care of a newborn is not guaranteed under the law in the United States. In fact, the U.S. is the only country among 41 nations that are members of the Organization for Economic Cooperation and Development (OECD) and the European Union that does not mandate any paid leave for new parents, according to data compiled by the (OECD).
Some progress has been made over the last few decades. In 1993, the Family and Medical Leave Act was passed, requiring companies with 50 or more employees to give workers 12 weeks of unpaid leave to care for a new baby or a sick family member.
As of 2019, a handful of states mandate paid family leave, and many other states are considering bills that would provide employees with paid parental leave. Also, momentum is building for federal paid leave initiatives.
Company policies evolve
In the absence of mandated paid parental leave, employees cobble together a combination of disability leave and banked PTO. It’s a patchwork solution that often falls short.
Over the years, as more women entered the workforce, companies in competitive industries have started offering more generous maternity packages – anywhere from six weeks up to six months leave – to recruit and retain top talent.
While a great move forward, benefits for fathers lag far behind. Paternity leave programs typically offer far less leave. The average length of maternity leave is 41 days, compared with 22 days of paternity leave, according to a 2016 Society of Human Resources Management study.
To correct this imbalance, many companies moved to a seemingly gender-neutral parental leave policy. Companies offer the bulk of paid time off to a designated primary caretaker and a lesser amount to the secondary or supporting caretaker.
But this practice often results in mothers getting more time off. Often, men can be discouraged from identifying themselves as primary caregivers (either by their employers or because they’ve fallen victim to the pressure of long-entrenched gender norms).
More recently, a rash of big-name companies, including Twitter, Ikea and Chobani, boosted their paid parental leave programs.
Good intentions aren’t enough
But not every company has a parental leave success story to tell.
Consider the cosmetics giant Estee Lauder, which in 2018 settled an Equal Employment Opportunity Commission (EEOC) lawsuit for $1.1 million for providing more benefits to new moms than dads. The company gave new mothers six weeks of paid parental leave for child bonding, in addition to leave for recovery from childbirth and flexible return-to-work benefits. In comparison, new fathers received only two weeks of paid bonding leave.
In making their case against Estee Lauder, the EEOC found that Estee Lauder violated Title VII of the Civil Rights Act of 1964 (Title VII) and the Equal Pay Act of 1963, which prohibit discrimination in pay or benefits based on sex. It was a costly mistake.
The landmark case has become an important lesson for businesses of all sizes crafting their own parental leave policies. Good intentions are great, but double check the details to make sure your plan is fair to everyone.
Tips for creating an inclusive parental leave policy
- Offer the same benefits to both genders. If you want to offer six weeks of paid time off, for example, both mothers and fathers should get it. That’s the simplest, cleanest way to offer a policy and eliminate your risk for a discrimination lawsuit.
- Let your employees designate caregiver status. If you still want to offer a tiered parental leave program, let your employees designate their role and don’t make assumptions. In some cases, the father may be the primary caregiver. Companies get into trouble when they make the designation themselves.
- Call it a parental leave policy. Labels are important here, because “maternity” means mom and “paternity” means dad. Parental leave includes all caregivers, regardless of gender.
- Hire legal counsel to help draft your plan. An employment attorney can help you create a policy in compliance with state and federal laws.
- Clearly communicate your parental policy in writing. Detail the policy in your company handbook. If your parental leave plan falls under the Employment Retirement Income Security Act of 1974 (ERISA), you are also required to give plan participants the most important facts about their benefit plans in writing.
- Create a culture that embraces parental leave. Beware of hidden biases and pressures for fathers to return to work, which can undermine even the most progressive parental leave policy. Encourage and empower all employees to take time to bond with a new child.
Paid parental leave program alternatives
Not all companies can afford the types of generous paid parental leave programs offered by multi-million-dollar corporations.
But you can implement practices that make the transition to parenthood easier for your employees, including working from home, flexible scheduling, additional unpaid time off and job sharing. Just make sure what you offer is consistent for both mothers and fathers.
A win-win for employers and new parents
A well-crafted parental leave policy protects companies from potentially costly discrimination lawsuits, boosts employee engagement and makes it easier to recruit top talent. As more employees seek out family friendly workplaces, expect parental leave to become the norm—not the exception.
For more tips on creating innovative work-life policies, download our magazine: Building a better team: How to attract, retain and hire top talent.