Why more employers are offering paid parental leave
A Pew Research Center report ranks the United States last out of 38 countries in government-supported time off for new parents. But from Silicon Valley to Wall Street to Main Street, a growing cadre of progressive companies is offering parents of both genders parallel opportunities to take paid breaks when children are born or adopted.
“Offering generous paid parental leave has become table stakes among Silicon Valley companies,” says Rich Fuerstenberg, a Mercer partner. “But you’ll also find similar programs in other industries like professional service, accounting firms, consulting firms and investment banks.”
Studies conducted by the Disability Management Employer Coalition confirm that offering paid parental leave is not just for larger companies.
“We’re seeing smaller companies with around the 1,000 to 2,000 lives in every industry that are implementing this benefit,” says Michelle Jackson, AVP of Workplace Solutions Group at Unum.
According to data from Mercer’s 2015 Absence and Disability Management survey, 24% of participants offer parental/bonding care leave for birth parents — the average duration is eight weeks — after maternity leave related to disability ends and 24% offer parental/bonding care leave for non-birth parents for an average duration of six weeks; adoptive parents take an average leave of eight weeks beginning at the birth or placement of the child.
In many cases, the June 2015 Enforcement Guidance on Pregnancy Discrimination has been the catalyst for the introduction of generous gender-neutral paid parental leave programs. The guidance, issued by the U.S. Equal Employment Opportunity Commission, says “if an employer extends leave to new mothers beyond the period of recuperation from childbirth (e.g. to provide the mothers time to bond with and/or care for the baby), it cannot lawfully fail to provide an equivalent amount of leave to new fathers for the same purpose.”
“This guidance means companies have to really evaluate their existing policies and either modify them or keep the EEOC’s position in mind as they consider implementing parental leave policies for the first time,” Jackson says.
Change.org gains a competitive edge with paid parental leave
Offering parents of both sexes the same access to paid parental leave has been the norm at change.org since February 2015 when the company began offering an internally-administered 18-week paid parental leave to new parents of either sex. The leave can be taken in increments at any time in the first year after the birth or placement of a child.
Change.org is a small technology company with 275 employees in 18 locations around the world, including U.S. offices in San Francisco, Washington, D.C., and New York. Clients use the company platform to create surveys and petitions advancing their vision for social change.
The average employee age is mid-30s and, overall, there are more women than men. Although the business has operated for about a decade, the number of both staff and clients has exploded in the last five years.
“We just didn’t have any parents before then because we were a smaller company,” says Managing Director of Partnerships Matt Slutsky. He continues: “As a certified B corporation, change.org will not be going public and making people a gazillion dollars. So everyone gets five weeks of paid vacation and we decided last year to offer a generous paid parental leave to differentiate ourselves and appeal to more prospective candidates in a competitive technology market.”
Slutsky was the first change.org employee to take a paid parental leave of 15 weeks. Then later in the year, the HR team told him he still had three weeks left that he should use up before the end of the year.
“So I decided to take Fridays off to spend time with my son. It’s a really awesome and progressive policy,” he says.
Since then, both men and women have followed his lead. “There is now a culture of dads pushing other dads to take the leave they are entitled to, which is fundamentally different than in many other companies,” he says.
For Slutsky, the most important family-friendly element of working at change.org is how flexible the organization is about supporting the “new normal” for parents.
“It’s not just a matter of, hey you are back, let’s get to work,” says Slutsky. “The truth is when a parent returns he is fundamentally a new employee and that’s how he needs to be treated.”
EY enhances paid parental leave
EY recently took a good paid maternity/parental leave and improved it. EY’s self-administered U.S. policy offered 12 paid weeks off for new birth mothers and six weeks for dads and adoptive parents, but beginning in July 2016, it expanded the program to 16 weeks of fully-paid parental leave available to all men and women welcoming a child through birth, adoption, surrogacy or legal guardianship.
The decision to enhance the company’s paid parental leave program was research-based. Earlier this year, EY and the Peterson Institute for International Economics released a global survey that exploring gender equity issues within executive-level positions.
The study found the countries with the highest percentages of women in leadership, including in the boardroom and at the executive level, offered fathers 11 times more paternity leave days than those countries at the bottom.
Previously, EY's 2015 global generational research also found that 38% of U.S. millennials would move to another country with better paid parental leave benefits and men were more willing than women to change jobs or give up a promotion to better manage work and family.
“Providing our people with equal benefits unmatched in professional services, not only demonstrates our commitment to helping our families succeed, but also empowers all of our parents — men and women — to take advantage of this special bonding time with their child before returning back to work,” says Stephen Howe Jr., EY's U.S. chairman and Americas managing partner.
On average, 1,200 of EY’s 45,000 U.S. employees — split evenly between women and men — took parental leave in the last several years, with new mothers generally taking the full 12 weeks and fathers averaging 2.6 weeks. However, with the same paid leave period available to all employees going forward, the company is actively working to eliminate any stigma associated with dads going on longer leaves.
The new benefits will also offer financial assistance up to $25,000 per family for adoption and advanced reproductive technology procedures, including surrogacy and medically-necessary egg and sperm freezing.
Other parental supports offered by the company include a career and family transition program, a lactation program for nursing moms with free webinars, and a free hospital-grade breast pump and travel kits for mothers who have to travel for work. Other support offerings include back-up care options and an integrated working moms and dads professional network.
Bank of America ups the paid parental leave ante
With 181,000 employees in all 50 states, Puerto Rico and the U.S. Virgin Islands, HR policy changes at Bank of America can potentially impact a lot of lives. The financial institution recently opted to increase paid parental leave available to both birth and adoptive parents to 16 weeks from the 12 weeks that has been offered since 2009.
“We improved our program for two reasons,” says Jim Huffman, the bank's U.S. health and wellness benefits executive. “We got feedback from our employees. It’s also something we believe in as a company — our CEO, our management team and our head of HR.”
In many organizations there is a stigma associated with fathers taking long parental leaves, but Huffman says about 10,000 Bank of America employees annually take parental leave. In recent years, he says, both eligible male and female parents have taken an average 10 to 11 weeks of leave.
“I have team members and peers who have taken advantage of the program,” he says. “They feel very confident that it is not going to have any detrimental impact on their career or opportunities within the company.”
The bank outsources administration of parental leave benefits and a broad range of other leave programs to Aetna.
“Managers and employees have one place where they can go for all leave-related questions,” Huffman says.
Gene Lanzoni, Guardian Life’s assistant vice president of group and worksite marketing, sees outsourcing of FMLA, disability and parental leaves as a growing trend.
“There has been an increase in litigation related to leaves by employees who were denied leave when they believe they were eligible benefits,” he says. “By using a company that has systems, technology and automation so the right decisions can be made in every case, companies can be sure they are in compliance and stay out of court.”
And while the bank’s paid parental leave is top-notch, it is the other family-friendly programs offered that truly make it a leader in this space. For example, the Childcare Plus program grants all eligible parents earning less than $100,000 a $240 per month tax-free childcare subsidy.
An employee and his spouse each have a 25-day allowance for center-based or in-home childcare and 25 days for adult care when their primary caregiver is temporarily unavailable during work hours, such as vacation or sickness. Center-based care is available for children aged six weeks to 12 years. In-home care is available for children and adults of all ages.
Huffman says he gets calls across corporate America since the bank increased its paid parental benefits. He advises companies considering offering or enhancing a benefit to consider their unique culture, the needs of their workforce and their financials before making a decision.
Nevertheless, he says, “I tell everyone who asks that the confidence and the comfort level parents have when they do come back to work is just so strong because they had that time with their child. I think paid parental leave is a really great benefit to invest in.”
Jackson has little doubt that companies like change.com, EY and Bank of America represent the wave of the future.
“I think the U.S. has going to have to face this and make a decision to be family friendly and supportive of parents like the rest of the world has already done,” she says.