With unemployment at its lowest in 50 years, extending paid time off (PTO) for family caregiving is one way that HR professionals are revamping rewards packages outside of wage increases. A new study highlights the advantages of family PTO for employees and employers, and it's a lesson the federal government and cutting-edge companies are taking to heart as they increase family PTO benefits.
Retaining New Mothers
U.S. states that have implemented paid-leave policies found a 20 percent reduction in the number of female employees leaving their jobs in the first year after giving birth—and up to a 50 percent reduction after five years—according to a study for the March of Dimes Center for Social Science Research. The study, conducted by the nonprofit Institute for Women's Policy Research (IWPR), analyzed labor market participation among women in California and New Jersey before and after each state launched a paid family and medical leave system. In addition, the researchers found that:
- Over the long term, family PTO nearly closed the gap in workforce participation between mothers with young children and women without minor children.
- For women without access to family PTO, nearly 30 percent dropped out of the workforce within a year after giving birth and one in five did not return for over a decade.
Many U.S. employees "will face the demands of having a baby, and many have to make serious sacrifices that affect much more than their finances," said Rahul Gupta, chief medical and health officer at the March of Dimes.
Added study co-author Kelly Jones, an assistant economics professor at American University and senior research economist at IWPR, "In most U.S. households, when a child is born, the default is that the mom steps away from the labor force at least temporarily. If she can do that in a way that guarantees her return to that job and provides partial wage replacement, we are much more likely to encourage her attachment to the workforce."
California implemented its Paid Family Leave Program in 2004, while New Jersey's Family Leave Insurance Program took effect in 2009. In addition to those states, family PTO is now mandated for certain employers in Massachusetts, New York, Rhode Island, Washington state and Washington, D.C., with bills pending in other states.
Federal Government Sets an Example
Under the federal Family and Medical Leave Act (FMLA), eligible employees can take up to 12 weeks off work after the birth or adoption of a child, but this time off is often unpaid. As a result, 1 in 4 women go back to work within 10 days of giving birth, said Rob Wilson, president of Employco USA, a national employment solutions firm.
However, legislation enacted in December gives many—although not all—civilian federal government employees access to paid parental leave. The law now grants 12 weeks of paid parental leave to eligible civilian government employees who welcome a new child in their homes through birth, adoption or foster care. Employees must have been at their position for at least one year to receive this benefit.
More than 80 percent of U.S. employees do not have paid parental leave, Wilson said, "so although this new legislation will only impact federal workers, we have to remember that the U.S. government is the country's biggest employer. By making this change, other companies will be inspired to follow suit, and other states may also introduce similar legislation as they see the support and positive impact of paid paternity leave for federal employees."
[SHRM members-only policies: Paid Parental Leave Policy]
Employers Expand Family PTO
A number of U.S. companies recently announced expanded family PTO policies, effective Jan. 1:
Intel is expanding its U.S. paid-leave benefits to lend more support to employees caring for their families and loved ones, the company said. The updated benefits include:
- Expanding paid bonding leave for new parents to 12 weeks from eight weeks, in addition to covering pregnancy leave as short-term disability for birth mothers.
- Letting new parents work a part-time schedule for up to four weeks with full-time pay. Intel also will provide breast milk shipping at no cost.
- Offering eight weeks of PTO to care for a seriously ill family member and two weeks for bereavement leave.
- Offering short-term disability coverage at regular pay for up to 52 weeks.
"When our employees and their families are supported, they perform at their best," said Julie Ann Overcash, Intel vice president of HR and global director of compensation and benefits. "We want our employees to know we are here to support them through all the situations they and their families may encounter."
The distiller of Jim Beam whiskey and other spirits now provides eligible U.S. employees with enhanced paid parental leave and flexible work policies, such as:
- 26 weeks of paid parental leave for primary caregivers following the birth or adoption of a child, up from 12 weeks.
- 4 weeks of paid parental leave for secondary caregivers, which was unchanged.
This policy applies to all permanent, full-time, nonunion employees who have been with the business at least three months.
The company expanded its flexible workplace policies by giving employees the opportunity to work remotely one day each week, with job-sharing opportunities and eligibility to work compressed weeks, such as four 10-hour days.
"We are turbo-charging our global benefit offerings in 2020 to help our people bring their best selves to work and to life outside of work," said Paula Erickson, chief HR officer at Beam Suntory. "We believe that offering additional time when it's needed most, as well as greater flexibility, will lead to even better productivity and performance from our team worldwide."
Insurance and financial services firm Sun Life expanded paid family and medical leave benefits for all full-time and part-time workers in the U.S. The Enhanced Paid Family and Medical Leave program provides up to:
- 8 weeks medical leave for birth mothers to recover from childbirth.
- 16 weeks of fully paid family leave for all parents to bond with a new child, including adopted and foster children. Birth mothers thus receive up to 24 weeks paid time off for medical leave combined with paid family leave.
- 16 weeks of fully paid caregiving leave, which can be taken to care for ill family members or for a family member injured on active duty, to address matters arising from a family member called to military duty, to address issues related to domestic violence or sexual assault, or to become a bone marrow or organ donor. "We provide a broad definition of family—'chosen family'—which allows people to take leave for those close to them who may not be related by blood or marriage," said Devon Portney Fernald, a Sun Life spokesman.
- 26 weeks of paid short-term disability for an employee's own illness or injury, with the first four months at full pay, followed by long-term disability if needed.
Before the change, Sun Life offered eight weeks paid leave to recover from childbirth for birth mothers, two weeks paid leave for nonbirth parents to bond, and unpaid FMLA leave for caregivers of sick family members.
These benefits are available to all employees, whether hourly, part-time or full-time. For fully paid leave, employees must have at least one year with the company. Those with less than one year can take leave at a reduced percentage of coverage.
"Offering generous paid family and medical leave is the right thing to do for our employees and their families, and it allows them to be together in the moments that matter," said Dan Fishbein, president of Sun Life U.S. The program also aligns with the company's goal of an inclusive work culture that retains and recruits top talent from a diverse workforce, Fishbein said.
Related SHRM Articles:
Why Intel Enhanced Paid-Parental and Caregiving Leave, SHRM Online, February 2020
Paid Leave May Be 2020’s Biggest Workplace News, SHRM Online, January 2020
How Much Parental Leave Is Too Much?, SHRM Online, February 2019
To Improve Gender Equality, Help Men Take Parental Leave, SHRM Online, January 2019
[Visit SHRM's resource page on paid time off.]