By Marti Cardi, VP-Product Compliance
We’ve all seen the headlines over the past two years: “XYZ Company Adopts Expansive Paid Parental Leave Policy.” News coverage of paid parental leave (PPL) increased tremendously in 2015-2016 over prior years, fueled by the numerous PPL implementations by big-name companies.
Key questions that arise in assessing the increase in company PPL plans include: Why now…finally? What motivates employers to adopt PPL plans? What lessons can employers learn from the trailblazers’ experiences? What’s next for PPL? We’ll do our best to answer these below.
In mid-January the Integrated Benefit Institute (IBI) hosted an event in San Jose to present the findings of its 2016 study of the tech industry’s burgeoning PPL policies. The study, “. . . And Baby Makes Three (Months Off)”, attempts to answer the above questions and more. At the event, representatives from Facebook, Intuit, and Adobe participated in a panel discussion of their companies’ PPL programs and provided their thoughts and experiences on these issues as well. (And many thanks to Facebook and Intuit for sharing their positive experiences with Matrix as their third party administrator!)
The following information is based on IBI’s report (well worth a read in its entirety) and input from the panel and other employers at the conference.
Social and economic factors explain only so much. Yes, tech industry players have been competing fiercely for talent in recent years, but data show that the NASDAQ was booming in 2009, signaling the end of the recession. Along with this came declining unemployment rates overall and specifically in the tech industry. Yet that was not enough to set off a huge jump in PPL as an employee benefit.
Several events from 2009 forward may have created or contributed to the momentum:
- In 2009, the New Jersey paid family leave program took effect. (California’s paid family leave program took effect in 2002.)
- In 2012 Marissa Meyer was hired as Yahoo! CEO – while she was pregnant.
- In 2013 Sheryl Sandberg, Facebook’s COO, published Lean in: Women, Work, and the Will to Lead.
- The White House Summit on Working Families was held in June 2014, which brought together advocates for such issues as paid family leave, paid sick time, flexible scheduling, and equal opportunities in the workplace.
- In July 2014, the EEOC released its Enforcement Guidance on Pregnancy Discrimination and Related Issues, which made clear that parental leave policies that favor one gender over the other violate federal laws that prohibit discrimination on the basis of sex or pregnancy.
Whatever the cause, U.S. employers are embracing paid parental leave – and in some cases paid family leave – in ever greater numbers and with increasingly generous plans.
What Motivates Employers?
With these events as a backdrop, IBI conducted interviews with 15 established tech companies to discover the motivations driving their adoption of paid parental leave. These fell into four broad categories:
- Compete for talent – most companies have no drive to be #1 in PPL offerings, but want to be competitive by offering a reasonable amount of PPL.
- Support existing corporate social values – companies want a policy that comports with other expressed corporate values, such as being “family friendly”.
- Formalize and coordinate myriad and conflicting local, state, federal, and company leave policies.
- De-stigmatize females in workplace – make parental leave equally available to men so women won’t be viewed as taking their jobs less seriously by taking leave.
At the conference, employers also indicated they were motivated by recent legislation requiring paid parental or paid family leave, specifically San Francisco (effective 1/1/17) and New York State (effective 1/1/18).
Key Lessons for Employers
The IBI interviews and the conference participants provided three key lessons for employers considering adopting a paid parental or paid family leave program. Undoubtedly there are many more but here’s a start:
First, design a policy for what YOUR business is trying to accomplish. Don’t feel pressured just to do what everyone else is doing. Carefully analyze your company’s philosophies, strategies, operational needs, and other factors. Then, design a plan that will mesh with and support those factors. This is not a cookie cutter, one-size-fits-all issue.
Second, leverage your company’s FMLA and disability experiences to design and manage a program that will help maintain business performance. You probably already have a lot of experience in similar leave issues – FMLA, state leaves, disability plans, company policies, etc. Use that experience to understand your employees’ leave usage and its impact on business operations.
Finally, focus on improving the employee’s return-to-work experience after an extended leave. A new parent may have difficulty going from parental bonding leave on Sunday to full and productive engagement upon return to work on Monday. Consider easing the employee back to work with a part-time return schedule. Make sure the supervisor doesn’t have an impossible list of tasks waiting for the employee the first day back. On the other hand, ensure that the supervisor and co-workers don’t exclude the returning employee from ongoing projects; rather, design a means to bring the employee up to speed and start contributing.
What’s Next for PPL?
Many questions remain as the United States tries to join the rest of the industrialized world to provide adequate paid parental and family leave. There is no “standard” PPL program at this point. Employer discussions at the IBI event revealed numerous plan variations, including:
- Paid maternity leave for the birth mothers only, funded by disability plans.
- Equal paid parental leave for all parents, with birth mothers also getting the disability/maternity leave.
- Equal total leave for all parents, with the birth mother’s leave being partially funded by a disability plan.
- Paid family leave that includes both bonding leave but also time off to care for other family members.
- Paid parental time off ranging from 6 weeks to 12 months.
- Different amounts of paid leave depending on whether the employee self-identifies as the primary or secondary caregiver.
- Intermittent bonding leave – disallowed completely by some employers, while others allow intermittent leave in as small as one-day increments.
- Pay provided at a percentage of the employee’s compensation or fully paid at 100%.
- Coverage extended to assist with adoption proceedings and/or infertility treatments, or to care for foster children.
Other challenges and questions for the future of PPL in the United States include:
- How can companies keep up with and comply with state and local laws?
- Can paid family leave programs solve the issue of perceived unfairness, such as birth mothers getting more time than other new parents under most plans?
- The IBI study is based on tech industry. What are the implications and likely trends for other industries?
- Will today’s plan designs suit the upcoming parenting years of the Millennials, or will changes be needed?
- Will the Trump presidency have any impact on the future of PPL in the United States? Trump’s campaign platform included a belated and tepid paid leave proposal – up to 6 weeks for the birth mother only, funded and administered by the existing federal unemployment program, and available only if the employer does not provide other maternity leave benefits.
What is YOUR company doing or considering in the world of paid parental and family leave? Please share with us in the comments section below.
My thanks to IBI and its Director of Research and Measurement, Brian Gifford, Ph.D, for hosting the event and sharing such valuable information with the employer community.
MATRIX CAN HELP! We closely track the trends and legislation relating to paid parental and family leave, and will keep you posted on legislative, agency, and court developments through this blog and our monthly On Your Radar update.
Matrix Absence Management provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. At Matrix we monitor the many state and municipal family and sick leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at email@example.com.