Paid parental leave options: Understanding your rights
Balancing demanding work obligations and a growing family can be a big challenge for employees, especially when they have just welcomed a new child. Parents need time off to care for and bond with their latest addition. However, limited parental leave options in the United States often hinder them.
Currently, only 27% of American workers employed in the private sector have access to paid family leave. Offering paid parental leave is an often overlooked employee benefit that can help improve employee satisfaction and retention among parents within the company.
Explore the different types of paid parental leave benefits and why you may want to add this benefit to your company’s leave offerings.
Paid Parental Leave is what?
Paid parental leave (PPL) is a form of paid time off given to employees who have recently become parents. PPL is an employee benefit companies offer to help employees care for and bond with their newborn or recently placed children. It most often applies to both mothers and fathers who have welcomed a new child through birth, adoption, or fostering.
Do Businesses Have to Offer Paid Parental Leave?
Most businesses in the United States are not required to offer paid parental leave to employees. Instead, employees often have to take unpaid leave to care for their new child. However, some states have different laws or programs offering eligible employees paid leave. In addition, many civilian federal employees are eligible for paid federal leave under the Federal Employee Paid Leave Act.
However, many businesses choose to offer paid parental leave as part of their employee benefits offerings, even though it is not required for most private employers. Employers can do this through a leave program they run or by adding short-term disability insurance to their health insurance and benefits package.
Forms of Parental Leave in the United States
There are several types of parental leave programs, some of which employers must offer and others that can be provided as a supplemental benefit.
FMLA Leave
The FMLA provides eligible employees with job-protected unpaid leave. This leave can be used for qualifying family events or serious health conditions. Family bonding leave after the birth or placement of a child is a qualifying event. Employees can take up to twelve weeks of leave under the FMLA.
A portion of the leave balance may also be used for pregnancy-related health complications or medical appointments, as pregnancy is considered a qualifying serious medical condition under the FMLA. New parents have a full year to utilize their family bonding leave. This allows for flexibility in taking the leave later, rather than right after the birth or placement.
To be eligible for FMLA leave, an employee must work for a covered employer. This applies to the following employers:
- Private-sector employers with 50 or more employees within a 75-mile radius.
- Public agencies, including local, state, or federal government agencies.
- All public or private schools, regardless of the number of employees they employ within a geographic area.
In addition to working for a covered employer, employees must meet the following eligibility requirements:
- Having worked for the covered employer for at least 12 months.
- Having worked at least 1,250 hours with the employer over the previous 12-month period (which means that some part-time employees may qualify).
- Working at a location where the employer has at least 50 employees within 75 miles. Note that this refers to the worksite from which they receive directions and oversight, so employees who work from home can still be eligible if they receive assignments from a central office with at least 50 employees reporting to it either in person or remotely.
Federal Employee Paid Leave Act
The Federal Employee Paid Leave Act (FEPLA) is a law that applies only to eligible federal employees. It allows for up to twelve weeks of paid parental leave in connection with the birth, adoption, or placement of a child. FEPLA offers up to 12 weeks of paid parental leave. This leave can be taken anytime within 12 months of the child’s birth or placement date.
To receive paid family leave under FEPLA, the employee must meet the FMLA eligibility requirements, including the required length of service. The Department of Labor advises that employees must also agree in writing to subsequently work for the applicable employing agency for at least twelve weeks after using their FEPLA leave.
Short-term Disability
Employees can often use short-term disability insurance for pregnancy and childbirth. Employee benefits typically include these insurance plans. Additionally, certain states offer their own short-term disability or pregnancy disability programs. In most cases, employees receive a percentage of their salary while on short-term disability rather than their full salary.
The exact leave entitlement will vary based on the disability insurance plan and whether or not the employee had any medical complications during the birth. Employers often tailor short-term disability plans towards pregnant or postpartum employees. This can result in varying eligibility requirements that are more restrictive compared to other types of leave. Coverage for adoption, foster placement, or paternity leave under short-term disability can vary. You should consult your specific plan provider for details on these situations.
State Paid Parental Leave Programs
Currently, eleven states and the District of Columbia have state-level requirements or leave programs for new parents. Many programs offer full or partial payment. However, requirements and leave lengths vary greatly. Consult your state and local laws to determine if your business must provide paid parental leave for a child’s birth, adoption, or foster placement. Some states also have parental leave requirements for parents who must take time off for their children’s school activities.
Employer Paid Parental Leave Policies
Of course, employers are also free to create their own paid parental leave policies for their internal human resources department to administer. Employer-run paid parental leave policies typically offer a distinct amount of PTO. This time off is separate from sick leave or vacation and is specifically for welcoming a new child.
Employers have flexibility in determining the duration of paid parental leave. However, these programs must adhere to both FMLA regulations and any applicable state-level requirements. Small businesses with limited budgets often provide a few weeks of paid parental leave. New parents typically use unpaid FMLA leave to extend their time off.
Why Offering Paid Parental Leave is a Good Idea For Employers
Paid parental leave lessens the financial strain on new parents. It also provides crucial bonding time and allows parents to recuperate.However, offering paid parental leave also has some benefits for employers themselves.
Appealing to Top Talent
If you need help attracting and recruiting top talent, enhancing your employee benefits offerings is a great way to make your company more appealing and competitive within the recruiting market. Offering paid parental leave can be a significant selling point for potential employees and make your company stand out from competitors. Only about 27% of American companies are offering this benefit, so it’s an excellent way to differentiate your company and its perks from others.
Supporting Good Employee Performance and Engagement Long-term
Short-term productivity may decrease due to employee leave. However, this is usually balanced by long-term improvements in performance and productivity. Realistically, sleep-deprived employees who were up all night with a newborn baby aren’t going to do their best work.
Time off and reduced schedules help new parents transition back to work smoothly. This focus and productivity ensure a smooth transition back to full-time work. Without adequate time for bonding and recovery, employees risk burnout and disengagement. Prioritizing parental leave fosters long-term employee well-being and performance.
Improving Retention
Generous parental leave policies can also increase employee retention. Parental leave helps new parents maintain their careers. It also fosters loyalty and increases employee retention. Google famously reported a 50% increase in retention among new mothers after increasing its paid parental leave benefits.
Paid parental leave and flexible work options help employees balance work and family. Valuing employees through these benefits boosts morale and job satisfaction. Work-life balance and benefits influence employee retention in today’s competitive market. Investing in paid parental leave is a smart move to keep talented employees.
