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American Express Pushes Paid Parental Leave to 20 Weeks for Moms and Dads

Ikea US expands paid leave to 16 weeks, as big firms make generous family benefits part of their brand

A young couple kissing their baby

American Express is expanding its paid parental leave policy to 20 weeks for all of its U.S.-based salaried employees—mothers and fathers—beginning Jan. 1, 2017. Ikea US is pushing paid parental leave to 16 weeks for salaried and hourly workers.

In its Dec. 12 announcement, American Express, a global financial services firm, said that its parental leave policy covers employees who become parents by birth, adoption and surrogacy. In addition to the 20 weeks of paid parental leave, birthing mothers will be eligible to receive paid, medically necessary leave related to the birth of their child, generally six to eight additional weeks.

In recent years, a growing number of large U.S. corporations have made generous family benefits part of their employee value proposition, branding themselves as family-friendly workplaces.

"American Express remains deeply committed to our working families and an inclusive culture that supports all of our employees," said Kevin Cox, chief HR officer at the company, in the firm's announcement. "These significant enhancements to our benefits reflect a continued investment in the overall well-being of our employees and their families."

"This policy change supports an overall trend we are seeing with regard to health care and leave benefits, as companies allow more flexibility for family responsibilities," said Trisha Paine, chief marketing officer at ConnectYourCare, a benefits tech firm based in Baltimore. "The United States has historically had one of the most conservative parental leave policies globally. Time with family is precious and short, and it is good to see the trend moving in this direction."

In addition to offering paid parental leave, American Express said that it provides a comprehensive package of family-friendly benefits to help parents manage work and caregiving responsibilities. Some of these benefits include:

  • Back-up care, a program that provides employees with up to 20 days per dependent, per calendar year, of quality in-home or center-based care.

  • Healthy Babies, a program for expectant mothers, providing them with a wide range of health care resources and incentives.

  • Flexible work arrangements, allowing employees to work directly with their leaders to determine the best arrangement for their role.

[SHRM members-only how-to guide: How to Develop and Administer Paid Leave Programs]

A Growing Trend

Also in December, furniture retailer Ikea US announced that beginning Jan. 1 it will provide up to 16 weeks of paid parental leave for employees—including both mothers and fathers, as well as adoptive and foster parents. Unlike American Express and many other companies, Ikea's expanded paid leave is being offered to both salaried and hourly workers.

Ikea's leave benefits are based on employee tenure:

  • Workers who have been with the company for a year can take up to three months of paid leave to be with their family, receiving 100 percent of their base wage for the first six weeks of parental leave and 50 percent for an additional six weeks.

  • Workers with three or more years of tenure can take up to four months of paid leave, receiving full base wages for the first eight weeks and 50 percent for an additional eight weeks. This is in addition to the six to eight weeks of short-term disability available to all workers regardless of tenure.

At Ikea, "we believe time with family and friends is so important for a healthy work/life balance and a happy and productive workforce," said Lars Petersson, Ikea US president, in the firm's announcement. "This benefit, which applies to all parents, will give our co-workers the opportunity to spend more time with their families when welcoming a child."

Ikea recently conducted research into what employees thought were the most important aspects of "the American Dream." Topping the list was work/life balance and moments spent with family and friends, Petersson said.

Also this year:

  • Tech company Etsy made its employees eligible for 26 weeks of fully paid leave when they become a parent through birth or adoption, regardless of their gender. Parents can take their leave over the two years following the birth or adoption of their child but at least eight of those weeks must be taken continuously in the first six months.

    "We want to support and enable parents, regardless of their gender, to play equal roles in building successful companies and nurturing their families," said Juliet Gorman, director of culture and engagement at the firm. 

  • Accounting and professional services firm Ernst & Young (EY) increased paid parental leave to 16 weeks for new mothers and fathers welcoming a child through birth, adoption, surrogacy, foster care or legal guardianship. In addition, the firm announced new benefits that will take effect on Jan. 1, including financial assistance of up to $25,000 per family for adoption, advanced reproductive technology procedures including surrogacy, and medically necessary egg and sperm freezing.

    On average, nearly 1,200 EY employees in the U.S.—half of whom are men—take paid parental leave each year, the firm said.

    "As the definition of 'family' continues to evolve, it was important for EY to take a bold step that supports all our people and their many different pathways to parenthood," said Carolyn Slaski, EY Americas vice chair of talent. "These new benefits will not only continue to attract and retain the best talent, but help us to deliver exceptional client service, while also encouraging our people to live fulfilling lives."

  • At chemical firm BASF, U.S. salaried and hourly management-represented (nonunion) new parents—maternal, paternal and adoptive—will be eligible for eight weeks of paid parental leave. For new mothers, this is in addition to the typical six to eight weeks of paid maternity leave already available.
    BASF also will now pay the first five days of Family and Medical Leave Act (FMLA) leave to allow employees to care for a family member with a serious health condition, and employees will be able to take up to 10 paid days (80 hours) of bereavement leave when they suffer the loss of an immediate family member.

  • Energy firm Exelon announced expanded company leave policies for eligible full-time employees, providing mothers who have given birth with up to 16 weeks of paid leave. New fathers and adoptive parents will receive up to eight weeks of paid leave. Primary caregivers will also be able to take two weeks of paid leave to care for a family member with a critical health condition.

Raising the Bar

How far can the paid parental leave envelope be pushed? Last year, Netflix announced "unlimited maternity and paternity leave." Tawni Cranz, Netflix's chief talent officer, said that "We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances. Parents can return part-time [or] full-time, or return and then go back out as needed. We'll just keep paying them normally, eliminating the headache of switching to state or disability pay."

She added that "each employee gets to figure out what's best for them and their family, and then works with their managers for coverage during their absences," which may suggest that "unlimited" will, in practice, be subject to negotiation.

Competing Value Propositions

"Seeing these generous policies that larger companies have the ability to offer, smaller companies may worry," said Bobbi Kloss, director of HR management services at Benefit Advisors Network (BAN), a consortium of health and welfare benefit brokers across the U.S. "There is room for flexibility in staffing at larger companies, whereas small companies may not have that luxury."

Smaller companies, however, "should remember they are competing on a different level and look at setting policies that work for them; providing not only a conducive work/life balance but a competitive advantage within their market segment," she advised.

According to the Society for Human Resource Management's 2016 Employee Benefits survey:

  • One-quarter of organizations (26 percent) offered paid maternity leave—including coverage by family or parental leave policies, but excluding what is covered by short-term disability or state law—and 21 percent offered paid paternity leave.

  • Fewer organizations offered paid adoption leave (20 percent), paid foster child leave (13 percent) and paid leave for parents using a surrogate (6 percent) as part of any paid leave plan.

In December, international luxury goods group Kering, which owns brands such as Saint Laurent and Gucci, announced a parental policy that will allow employees worldwide a minimum of 14 weeks on full pay for maternity and adoption leave but only five days on full pay for paternity or partner leave. That disparity triggered surprise and some criticism. "Though Kering brands such as Gucci and Bottege Veneta have decided to merge genders on the runway, they haven't made the same leap in leave policies," reported the New York Times.

Related Discussion:

SHRM members, check out the discussion around this article in SHRM Connect: Paid parental leave trend - your thoughts

Related SHRM Online Articles:

Facebook, Coca-Cola, Braun Medical Offer Paid Parental Leave Tips, SHRM Online Benefits, October 2016

How to Weigh the Value of Paid Parental Leave, SHRM Online Benefits, April 2016

Related Resource:

Considerations for Drafting a Parental Leave Policy, Franczek Radelet P.C., December 2016 

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