What US employers can learn from other countries’ parental leave policies

Baby nursery maternity

Paid parental leave has gained popularity as an employee benefit over the last few years as employers including Amazon, Bank of America and Google update their offerings. But despite moves by a number of employers, the U.S. is still the only industrialized country in the world that doesn’t offer federal paid leave for either parent. As someone who’s not American, that was surprising to me when I first began covering the industry as a reporter for Employee Benefit News.

If employers want to create family-friendly policies that increase retention, productivity and employee morale, they may want to pay attention to what Nordic countries are doing. Let’s take a look at my home country Sweden as an example.

Sweden’s social welfare system encourages fathers to take parental leave — something made possible partly by gender equality policies including a paid paternity leave law. In Sweden, each parent has the right to 480 days of paid parental leave, out of which 90 days are reserved exclusively for fathers.

David Sohr, a Swedish motion graphics designer and father of two, was on paternity leave for five months after his first daughter was born in 2016 from his employer, Swedish cinema operator SF Bio. The leave was paid at 80% of his salary, which allowed him to take time off from work without putting a strain on the family’s finances, he says.

“It's very important that the leave is paid, especially for those who aren't rich, which [is the case for] most of us,” he says. Sohr says his employer encouraged his decision to take paternity leave.

“I only [got] positive vibes from my employer,” he says. “It was actually kind of ironic because my boss had just gotten back from her maternity leave when I left for mine. So she was very supportive and wished me the best of luck, and that I would enjoy the time with my daughter.”

Nordic countries are often praised for their progressive social policies and lawmaking. Their social welfare nets with universal healthcare, tax-subsidized daycare and tuition-free universities are often discussed across the globe.

In Sweden, men participate more in childcare, are healthier and live longer — partly as a result of its paid parental leave policy, says Linda Haas, professor emerita of sociology and adjunct professor of women's studies at Indiana University Purdue University Indianapolis, who has researched gender and work in Sweden for more than 40 years. Swedish research suggests paternity leave could be associated with developing lifestyles more similar to the traditional female role that tends to promote decreased alcohol consumption, better food habits and increased risk-aversion, which would affect mortality positively.

Swedish fathers have job security when home, and managers report that they are better workers when they return, as they can manage better, handle stress better, juggle multiple tasks, and communicate better, she says. Paternity leave is not only beneficial to men.

“For women, they have higher lifetime income, especially when partners take leave, and retain a strong attachment to the labor force,” Haas says.

While some U.S. lawmakers support a mandated paid parental leave policy like in Sweden, developing a federal paid leave law that fits all is no easy feat.

“The U.S. system is a patchwork, and it’s more inconsistent than in many other countries,” says Chris Clarke, junior economist at the social policy division at the Organization for Economic Co-operation and Development, referring to the mix of employee provided leave, state level paid family leave, and the Family and Medical Leave Act’s unpaid family leave.

When addressing the issue of paid parental leave in the U.S., there are several aspects for lawmakers and employers to consider. How much time off work is ideal? Is mandated leave too much of a financial burden for companies? And — usually the most important question — how to pay for it.

Other concerns are how to get fathers to take more time off, and if leave policies should be decided on state level, or by federal law. At the moment, there is no public consensus in the U.S. on these issues.

Keeping employees in the workforce is a key point to a successful parental leave policy, and studies have shown that very long leaves can increase the risk of the employee leaving the workforce altogether.

“Some European countries are providing extremely long leaves, sometimes up to the child's third birthday, but are often paid at moderate rates,” Clarke says. “While the Nordic countries offer slightly shorter leaves that are often better paid.”

From a gender equality perspective, the Nordic countries are leading the way, he adds, as women do not experience missed career progression or earnings penalties that very long leaves can cause.

“They offer decent length leaves, but not too long, so we don't get the negative employment effects of very long leaves. Many studies from different OECD countries have found that when these mothers return to work, they are able catch up and make up for the time they have been away,” Clarke says.

Research shows that longer periods of parental leave, at least a couple of months up to a year, make employees more engaged and productive, and suggest that families with fathers utilizing paternity leave are likely to be more equal in terms of household work. Access to low-cost, tax-subsidised childcare in Nordic countries also enables parents to go back to work after their leave, while their children are still at a very young age.

“The combination is magical,” Haas says. “It's having paid leave for both mothers and fathers, as well as high-quality, highly subsidized, publicly available childcare that people trust and want to use.”

The evidence is clear — paid parental leave is good for employees. While I know a year is a long time, giving employees time off to bond with their newborn is something I think employers should value. Employees are a company’s most valuable asset, so it’s important to make sure they are happy and fulfilled — in and out of the workplace.

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