TOP 5 ISSUES TO CONSIDER WHEN PREPARING A PARENTAL LEAVE POLICY

by Lana L. Rupprecht, Esq. - Director, Product Compliance

& Marti Cardi, Esq. - Vice President, Product Compliance

April 07, 2022

 

Are you thinking about implementing a parental leave policy? Good for you! Well planned parental leave policies are excellent recruiting and retention tools, AND more importantly, offer great benefits for your employees.

Planning ahead is essential—even more so due to multiple state paid family and medical leave laws (click here for our summary) and the changing workforce resulting from the pandemic.

What should you think about when preparing a parental leave policy? Here are our top 5 suggestions:

#1: Consider the Basics

Decide what the policy will provide. This sounds obvious but this is an important first step.

  • Will the time off be paid, unpaid or hybrid? Will any paid time equal 100% of wages or a lower percentage? Must the leave be taken all at once or is intermittent/reduced schedule leave allowed? Subject to federal and state laws discussed in #2 and #3 below, these decisions are largely up to the employer and may depend, for example, on financial resources, company culture, and current policies and benefits already in place.
  • What about PTO or vacation benefits? Do you want employees to exhaust accrued PTO or vacation before any paid parental leave kicks in or treat each benefit separately?
  • Employee eligibility? Should employees qualify for such leave beginning day one of employment or will they be subject to certain eligibility requirements similar, for example, to the federal Family and Medical Leave Act (FMLA) (12 months of service, 1250 hours worked in the past 12 months) or corresponding state laws?
  • Are there benefits to offer other than leave? Consider offering other benefits that support new parents such as a new parent room for expressing breast milk, additional paid time off for caregivers, flexible work arrangements for returning parents, flexible return to work assistance, and if possible, onsite child care (or resources helping find child care which can be a stressful and daunting task).
  • What about the leave approval and return to work process? Make sure you have the resources to properly track and administer the leave.

#2: Do not forget about (or get confused by) the FMLA and state equivalents!

  • Quick Refresher: The FMLA provides eligible employees of covered employers with 12 weeks of job-protected leave for certain reasons identified in the law. The serious health condition of the birth mother and bonding with a new child are relevant to parental leave policies. For bonding leave, time must be taken within the first year of the child’s birth or placement for foster care or adoption and may only be used intermittently with employer approval.
  • Run Concurrently with FMLA: You should decide whether you want the leave to run concurrent with FMLA or whether you want to permit the employee to delay the company-provided parental leave. Remember, you may NOT delay application of the FMLA if the reason for the leave is FMLA-qualifying. For example, employers may not allow an employee to first use benefits under the parental leave policy and then have FMLA kick in. The Department of Labor (DOL) addressed this specific question, here.
  • Sound familiar? We have written about this issue many times. Check out this blog for example:

    DOL to Employers: If it’s FMLA, it’s FMLA. If it’s not, it’s not. | Matrix-Radar
  • State Unpaid Family and Medical Leave Laws: Similarly, you should check state family and medical leave laws, and if permitted (or required) run that leave concurrently with any paid parental leave policy. The DOL identifies resources summarizing state family and medical leave laws, which can be found here—not to be confused with state paid family and medical leave laws discussed next!

#3: Check state paid family and medical leave laws

  • Refresher: If you regularly follow our blog, you already know all about the state paid family and medical leave (PFML) laws, current and upcoming. If not, and you are feeling a rising sense of panic, you can find our map identifying and summarizing these laws here! Also, check out our blog on a related issue, here, discussing the challenges associated with preparing a one-size-fits all PFML policy.
  • Where are your employees? When planning a parental leave policy, check to see if you have any employees working in any of the states subject to PFML laws. Multi-state employers, in particular, should take steps to ensure the laws and requirements in each of those states coincides with the parental leave policy.
  • PFML Requirements and Coordination with Other Laws: Many of these laws have different rules on eligibility, pay (most do not provide 100% salary replacement), duration, etc. and are offset by any state paid benefits the employee receives or eligible to receive. It is essential that you understand these laws and coordinate them with your parental leave policy and other leave laws so they, to the extent possible, run concurrently. Failure to do so may cause an unintended result such as leave stacking of paid parental leave, FMLA leave and then PFML leave!
  • Changing Workforce: Don’t forget remote employees moving between states. This is becoming more and more common due to the pandemic. Given the minimal eligibility requirements for PFML in some states, it is possible for an employee to be subject to PFML in one state but not another or even more confusing, more than one PFML state!

#4: Treating Parents Equally

  • “Moms” versus “Dads”? Who will be benefiting from this policy? Both parents must receive equal time for bonding leave and other benefits surrounding the new child. Similarly, consider removing gender-specific roles and identities in your parental leave policy. For example, instead of using terms such as “mom” and “dad,” use gender neutral terms such as “partner,” “birth parent,” etc.
    • You are likely aware of the highly publicized litigation involving parental leave policies such as the $1.1 million 2018 settlement against Estée Lauder, which we reported here, and the pending parental lawsuit against Jones Day, which can be found here! Keep the lessons learned from these cases in mind!
  • Bonding and New Child Benefits: It is extremely important that you provide new parents equal benefits and time off for bonding leave and other benefits related to the arrival of the new child such as modified work schedules and other flexible return to work benefits.
  • Caregiver Status: Also, do not make any assumptions based upon a parent’s status as a caregiver. See the recent EEOC guidance on this topic which can be found here and here.
  • Pregnancy-Related Medical Conditions: According to EEOC Guidance, a birth parent may receive additional leave relating to a disability or pregnancy-related medical condition. Remember though--this is not the same, as bonding leave!

#5: Review and Revise (or Scrap) Overlapping Policies

  • Review Current Policies: Make sure you carefully review all existing company policies (such as attendance policies, compensation polices, PTO/vacation policies, etc.) and any short-term disability plan to ensure coordination of benefits. You may need to revise or remove these policies once your parental leave policy is effective.

Before finalizing your parental leave policy, you should carefully consider at least these 5 issues and discuss with your employment law counsel, human resources, payroll, and tax advisor.

Matrix Can Help!

Matrix offers integrated FMLA/leave of absence, ADA, and integrated disability management services. For more information about our solutions, please contact your Matrix or Reliance Standard account manager, or reach us at ping@matrixcos.com.