October 01, 2021
Parental leave is a top benefit for employees and a powerful recruitment and retention tool for employers. The following FAQs share the business case for paid parental leave benefits and much-needed information on employer trends and best practices.
Parental Leave FAQs
The case to support parental leave is clear-cut—it pays for itself in employee retention, productivity and health and well-being outcomes.
- Profitability, innovation and morale: Companies that invest in family well-being see 5.5 times more revenue growth, greater innovation, higher talent retention and increased productivity.1
- Reduced turnover: Women with paid parental leave are 40% more likely to return to work than mothers without access to paid leave. Moreover, when given access to 12 weeks of paid leave, they are 69% more likely to return.2
- Employee attraction: Millennials and Gen Z want better, more equitable parental leave policies, available to all genders and family structures.3
- Improved parental mental health: Paid leave, especially when longer than 12 weeks, helps reduce maternal stress and depressive symptoms.4 And the results last—European women who took more than 12 weeks of paid parental leave were 18% less likely to suffer from depression 30 years later.5
- Improved child and infant mortality rates: Across the globe, paid leave is associated with significantly lower newborn, infant and child mortality. In fact, access to 10 full-time weeks of paid maternal leave was associated with a 10% lower newborn and infant mortality rate and a 9% lower mortality rate in children under age 5.6
- Sustained breastfeeding: Paid time away alleviates constraints and disparities that cause early cessation of breastfeeding, allowing exclusive breastfeeding to continue for as long as desired and/or recommended.7
- Higher vaccination rates: Those with paid parental leave are more likely to make sure that their infants and children receive recommended vaccinations and on-time immunizations.8
- Improved child development and mental health: Parental leave results in fewer behavioral problems, improved cognition and better mental health outcomes for children.9
- Improved gender equity: Equitable access to parental leave for both men and women, as well as comparable use, is a lever for gender equity, helping to eliminate the motherhood penalty many women experience in their careers and changing the perception that caregiving is a woman’s responsibility.10
Both short-term disability (STD) and parental leave are popular benefits among large employers. According to the Business Group’s Large Employers’ Leave Strategy and Transformation Survey, 100% of large employers offer STD for birth mothers, with 93% providing it as an employer-paid benefit and 7% offering it as a voluntary benefit for employees. In addition, 88% of large employers offer parental leave for bonding.
The difference between STD for pregnancy/maternity and parental leave for bonding (available to all parents) can be unclear to new parents and new benefits and well-being professionals. Table 1 describes the differences.
- Income-replacement insurance available for certain qualifying medical conditions (including pre-delivery complications or childbirth)
- Used immediately after birth or after a short waiting period
- Requires medical documentation
- Typically provides income replacement assistance up to a certain amount (e.g., 60%)
- Time away for parents to bond with a new child following birth or adoption placement
- Usually used within 1 year of welcoming a new family member/child
- Can be used within a certain timeframe (e.g., 6 or 12 months of birth or adoption)
Where legally applicable, employers can run STD and parental leave benefits concurrently. If an employer takes this approach, a birth parent entitled to 6 weeks of STD and 8 weeks of parental leave would have access to 8 weeks total of paid time away from the workplace. On the other hand, employers may choose to extend the duration of time away for birth parents by applying STD and parental leave benefits consecutively (i.e., one starts after the other). Some employers find that this approach better aligns with their equity, diversity and inclusion philosophy, as it allows birth parents the time they need to physically recover and then offers them the same amount of bonding time as non-birth parents. When developing an approach, employers should remain cognizant of any applicable legal requirements.
While 88% of large employers offer paid parental leave, durations vary based on industry and workforce needs. In the U.S., approximately 36% of large employers offer 12 weeks or more of parental leave, 38% offer 6-11 weeks and 24% offer 5 weeks or less. Durations also vary by industry. For example, Trion’s 2021 Leaves of Absence and Time Away from Work Survey found that the median duration of parental leave was 3 weeks for the health care industry, 4 weeks for manufacturing and 12 weeks for high-tech.
Figure 1 summarizes leave amounts offered by large employers for birth parents, adoptive parents, parents by surrogacy and foster parents.
According to the federal Family and Medical Leave Act (FMLA), employees at companies with 50 or more employees qualify for unpaid parental leave once they have worked at least 1,250 hours in the year. As of 2021, Rhode Island, California, New Jersey, New York, Washington state and our nation’s capital, Washington, D.C, also mandate paid parental leave. These laws vary by eligibility, duration, income replacement, employee notification, reporting, how they’re funded and other factors. For more details on individual state and local laws, refer to the Business Group’s State and Local Wage Replacement Laws for Parental and Family Leave.
As employers design and expand parental leaves, many have equity and access top of mind. For this reason, 98% of large employers provide parental leave to both birth and adoptive partners, and 62% provide time away for foster parents welcoming a new child. While a past standard was to require a year of employment before becoming eligible for parental leave, more employers today are granting access to parental leave benefits sooner, sometimes at day 1 of employment. Additionally, some employers are extending parental leave to all employees, regardless of their status as a part-time or full-time employee.
Most large employers in the U.S. (87%) do not differentiate parental leave benefits based on an employee’s classification as a primary or a secondary caregiver. While the designation of primary and secondary caregivers is intended to be gender neutral, it often does not align with how many couples choose to parent and can perpetuate parental and gender biases. Equitable time away for bonding for all parents is a key step toward gender equality.
Existing gender roles, norms and expectations can drive gender-based inequities in utilization of parental leave. Employers can encourage men to use parental leave benefits by:
- Ensuring gender neutrality in parental leave benefits offered and how they’re communicated.
- Fostering a supportive culture (e.g., testimonials from senior leaders who’ve taken parental leave).
- Creating opportunities for dads to share experiences and resources through employee resource groups for parents, new parent mentoring/coaching programs and family-friendly events.
- Addressing any negative stigma/cultural nuances that prevent some men in from taking leave (e.g., men perceiving they’re less likely to receive a promotion if they take time away).
- Engaging with leadership to help them best support employees and encourage men to utilize available parental leave benefits (e.g., leadership/manager trainings).
Here are ways to support employees and their teams when taking parental leave:
- Provide employees going on parental leave with company resources, policies, checklists and timelines.
- Communicate parental leave policies clearly and often (e.g., a regular webinar/training for employees and/or managers on leaves).
- Carefully plan how to provide coverage during the leave through stretch assignments, temporary staff, rotation programs and/or redistributing and postponing work. If a colleague is stepping in, consider offering a bonus or temporary promotion.
- Highlight and recognize successful leave coverage stories.
- Collaborate and connect workers with a parent and/or family ERG—or simply point them in the direction of other external community support systems/networks available for parents.
- Consider flexibilities, such as part-time return-to-work (RTW), telework and flexible hours, as well as any needed accommodations.
Listed below are a few recommendations for employers/managers seeking to support employees as they reintegrate into work after taking parental leave.
- Consider flexibilities, such as part-time RTW, telework and flexible hours.
- Provide the employee with any RTW resources, policies or checklists.
- Identify if any reasonable accommodations are needed.
- Ensure reasonable break times and a safe, comfortable space for nursing for birth parents in accordance with company policy and ACA requirements.
- Be flexible when reviewing requests and remember that people’s feelings and circumstances can and do change once a child arrives.
- Don’t assume the employee can “pick up where they left off.”
Most countries, except for the U.S., Papua New Guinea, Suriname, and a few island countries in the Pacific Ocean, have government-sponsored paid parental leave benefits. These benefits differ greatly by duration, income replacement and eligibility. For example, the parental benefit period in Norway lasts 49 weeks (15 weeks reserved for each parent) with 100% wage coverage or 59 weeks (19 weeks reserved for each parent) with 80% wage coverage.12 In Italy, beyond the 5 months of maternity leave at 80% pay and 10 days of paternity leave at 100% pay, parents are also entitled to 6 months of parental leave each (not to exceed 11 months per couple), with 30% of income provided by the government-sponsored parental leave allowance.13
Many multi-national employers offer leave benefits beyond those provided by the government and strive for consistency, while balancing cultural norms, across their workforce. When addressing consistency for leave benefits globally, many employers start with parental leave. Of the 37% of employers with a global leave policy or philosophy, 90% include parental and maternity leave in their global leave policy—while only about half include bereavement and caregiver leave.
According to the Business Group’s 2020 Large Employers’ Leave Strategy and Transformation Survey, 37% of respondents have a global leave policy or philosophy and an additional 19% said they are considering and/or working to implement a global leave policy. Developing the right global leave benefit is a tricky task, as workforce needs vary greatly across different industries, cultures and locations. Leading employers can start by considering the following recommendations to determine a globally consistent strategy for leave benefits:
- Obtain full leadership support to develop and implement a globally consistent parental leave benefit.
- Establish an internal team or partner with a consultant to identify and regularly monitor legal requirements as well as to market benchmarks and local company benefits/policies where the current (and future) workforce is located.
- Get the right people involved, including HR, legal, finance and IT.
- Adapt to cultural norms and practices; start by learning from local HR teams, managers and employees through surveys, focus groups and one-on-one communication.
- Assess the cost implications associated with a globally consistent leave benefit.
- Determine global strategy design principles, such as a benefit minimum and ceiling.
- Ensure proper alignment with IT systems (e.g., payroll, HRIT, attendance).
- 1 | Maven and Great Place to Work. Parents at the best workplaces. 2020. https://info.mavenclinic.com/pdf/parents-at-the-best-workplaces?submissionGuid=e7b4f083-f318-4804-8404-d92da93c01c4. Accessed August 31, 2021.
- 2 | Gault B, Hartmann H, Hegewisch A, Milli J, Reichlin, L. Paid parental leave in the United States: What the data tells us about access, usage and economic and health benefits. Institute for Women’s Policy Research. March 2014. https://iwpr.org/wp-content/uploads/2020/09/B334-Paid-Parental-Leave-in-the-United-States.pdf. Accessed September 22, 2021.
- 3 | Lesonsky, R. Paid parental leave is vital to your employees – and it should be for you. Bank of America Corporation. Published February 4, 2020. https://www.bankofamerica.com/smallbusiness/resources/post/paid-parental-leave-is-vital-to-your-employees-and-it-should-be-for-you/. Accessed September 23, 2021.
- 4 | Chatterji P, Markowitz S, Brooks-Gunn J. Early maternal employment and family wellbeing. National Bureau of Economic Research. https://www.nber.org/system/files/working_papers/w17212/w17212.pdf. Published July 14, 2011. Accessed September 23, 2021.
- 5 | Avendano, M, Berkman L, Brugiavini A and Giacomo P. The long-run effect of maternity leave benefits on mental health: Evidence from European countries. Social Science & Medicine. May 2015; 132:45-53.
- 6 | Heymann J, Raub A, Earle A. Creating and using new data sources to analyze the relationship between social policy and global health: The case of maternal leave. Public Health Rep. 2011;126 Suppl 3(Suppl 3):127-134. doi:10.1177/00333549111260S317. Accessed September 22, 2021.
- 7 | Sriraman NK, Kellams A. Breastfeeding: What are the barriers? Why women struggle to achieve their goals. Journal of Women's Health. 2016;25(7):714-722. doi:10.1089/jwh.2014.5059. Accessed September 22, 2021.
- 8 | Choudhury AR, Polachek SW. The impact of paid family leave on the timing of Infant vaccinations. Institute of Labor Economics. https://www.iza.org/publications/dp/12483/the-impact-of-paid-family-leave-on-the-timing-of-infant-vaccinations. Published July 2019. Accessed September 23, 2021.
- 9 | Sarkadi A, Kristiansson R, Oberklaid F, Bremberg S. Fathers' involvement and children's developmental outcomes: A systematic review of longitudinal studies. Acta Paediatr. 2008;97(2):153-158. doi:10.1111/j.1651-2227.2007.00572.x
- 10 | Zalis S. Men should take parental leave—here’s why. Forbes. May 3, 2018. https://www.forbes.com/sites/shelleyzalis/2018/05/03/why-mandatory-parental-leave-is-good-for-business/?sh=ca380179dedb. Accessed September 2, 2021.
- 11 | Ma M. Family time: A state-by-state guide to parental leave. Policygenius. https://www.policygenius.com/blog/parental-leave-by-state/. Published July 29, 2019. Accessed September 23, 2021.
- 12 | The GPS Team. 4 countries with the best parental leave laws. Global People Strategist. https://www.globalpeoplestrategist.com/4-countries-with-the-best-parental-leave-laws/. Published March 23, 2021. Accessed September 23, 2021.
- 13 | Italy - Employment, Social Affairs & Inclusion- European Commission. https://ec.europa.eu/social/main.jsp?catId=1116&langId=en&intPageId=4618. Published 2021. Accessed September 23, 2021.