Why Your Company Needs an Inclusive Parental Leave Policy (And How to Create One)

Bringing a child into the world is no easy feat. There’s the prep, the recovery, the adjustment to a new way of life—not to mention easing back into the workplace once the time comes. As they say, it takes a village to raise a child. And as an employer, you’re a big part of that village.

In your role of supporting new parents, parental leave is one of the most powerful benefits you can provide. It offers parents the gift of time, which becomes a precious commodity the moment you become responsible for a new little life.

Not only are you an essential part of a new parent’s support system, but you could potentially lose top talent—both current and future—by not building a comprehensive parental leave policy. In a study commissioned by Vodafone, researchers found that one in five employees in the 18-34 age range quit their jobs due to poor parental leave options. In addition, the same study found that 25% of workers would not apply for a job if they thought the employer’s parental leave policy was inadequate.

When it comes to parental leave, many factors are at play. What’s the difference between maternity leave and paternity leave? What’s required by law? What’s the industry standard? As you navigate building, maintaining, or changing parental leave policies, we’re laying out the answers to all your questions.

What Is Parental Leave?

Parental leave is an umbrella term used to describe leave options for mothers, fathers, partners, adoptive parents, or foster parents. It lays out both time and pay options available to new parents as they take time off to care for their new family member.

While maternity leave is the most common type of parental leave, paternity leave and adoption leave options are quickly becoming standard across all industries. Increasingly, employers are crafting parental leave policies around non-traditional families and striving to incorporate more inclusive policies into all their benefits.

Is Parental Leave Required by Law?

Although laws differ globally, in the US, the Family and Medical Leave Act of 1993 (FMLA) requires businesses to offer employees up to 12 weeks of unpaid leave for various health and family reasons, including the birth of a child. However, not every employee is eligible, so it’s important to be aware of the following FMLA requirements:

• Only companies with 50 or more employees must offer FMLA coverage.
• Employees must have worked for the employer for at least 12 months.
• Employees must have worked at least 1,250 hours for the employer before taking leave.

In addition to leave granted by FMLA, many states have laws that go above and beyond the federally mandated 12 weeks of unpaid leave. Washington state recently passed the Paid Family & Medical Leave program (PFML), which grants Washington workers up to 12-18 weeks of paid family or medical leave depending on their circumstances.

Countries across the world are amping up their leave policies as the benefits of parental leave become more well known. Sweden offers a whopping 480 days of leave—to be split between parents—paid at 80% of employees’ regular wages.

Is Parental Leave Paid?

Whether or not parental leave is paid depends on several factors, including:

• If your employer offers paid parental leave
• The country where you’re employed
• The state where you’re employed

If relying purely on FMLA as parental leave, that leave is not paid. Because of this, many people take little to no leave when bringing a child into their home. As of March 2023, only 27% of American workers had access to paid family leave, and for many households, taking time off without pay simply isn’t an option. This is especially true for one-income households.

How Does Paid Parental Leave Benefit Your Business?

You’ve probably heard the cons when it comes to paid parental leave. It costs your business money. Other employees have to stretch to make up for the work being missed. These are all very valid concerns. But we’re going to make the argument that the benefits outweigh the risks—by a longshot.

Here are a few pros to consider when deciding whether to offer (and how much to offer) paid parental leave to your employees:

Paid Parental Leave Is a Recruitment Strategy

More and more job candidates are focusing on benefits as they choose whom they want to work for. In fact, a Forbes Advisor survey found that 40% of employers believe employees quit to attain better benefits. Parental leave is a huge piece of the puzzle when it comes to benefits, and it should be weighed just as heavily as other benefits like medical insurance or 401(k) contributions.

Strong Benefits for Parents Strengthens Your Employer Brand

Your employees—both current and potential—want to know that you care about them as people. Parental leave policies for all types of new parents shows them that you’re keeping their best interest (and their family’s) in mind.

Beyond making parental leave available, creating a culture where employees feel comfortable taking it is key. Many workers—especially men—feel there’s a stigma around taking the total amount of leave available to them. Fostering a culture where employees feel empowered to take that precious time will go a long way toward strengthening your employer brand.

Robust Leave Policies Increase Employee Retention

Employees who feel supported during big life milestones are more likely to stick around. Specifically, women with access to paid leave are more likely to return to the same employer after their leave ends.

Another factor to consider when weighing the pros and cons of offering paid leave: If you choose not to provide paid leave because of the cost, you may end up losing an employee and having to replace them, which can cost between $7,500 and $28,000 per employee just for the recruiting and hiring process (not to mention the toll that employee churn takes on morale).

Inclusive Parental Leave Policies Bolster Gender Equality in the Workplace

For a variety of reasons, the main one being that many companies don’t have solid paternity leave policies, the majority of new fathers take less than 10 days off after having a baby. This of course has negative effects on men, including less time to bond with their baby and decreased employee engagement, but it also has downstream effects on women in the workplace.

When women are the only ones who take leave, it perpetuates the notion that women should be the primary caregivers in the home. This has a trickle-down effect on the workplace, where women are less likely to receive promotions and still earn only 82% of what men earn. Gender-inclusive parental policies would help level the playing field.

Parental Leave Supports Physical and Mental Employee Health

New parenthood is rife with changes that affect both physical and mental health: changes to sleep patterns, hormone fluctuations, feeding schedules, and predisposition to depression—just to name a few.

Caring about your employees’ physical and mental health isn’t just the right thing to do—it’s also good for business. Mental health is closely linked to productivity, so it stands to reason that supporting employee health will lead to better productivity and engagement.

Which Businesses Offer the Best Paid Parental Leave Policies?

As you build a comprehensive paid parental leave policy, it may help to look to the companies that have set the standard. These companies are known for their company culture, and their support of new parents is a huge reason why.

Amazon

Amazon offers a variety of comprehensive parental leave policies to support parents both before and after the birth:

• Amazon maternity leave includes up to 20 weeks of fully paid leave for the birthing parent, including four weeks before the baby is born.
• Supporting and adoptive parents are granted six weeks of fully paid leave.
• Their Leave Share program allows Amazon employees to give six weeks of paid parental leave to a spouse or partner who doesn’t have access to paid leave through their employer.
• The Ramp Back program helps new parents ease back into the workplace after welcoming their baby.

Google

Google sets the standard when it comes to most benefits, with parental leave being no exception. Not only that, but they consistently move the needle on their own parental benefits.

• Google recently increased its paid leave from 18 weeks to 24 weeks for birthing parents.
• All parents are eligible to receive 18 weeks of paid leave.
• Employees are entitled to three months of remote work after their leave ends to help them adjust as they return to work.

Netflix

As many new parents know, Netflix becomes a good friend during long nights and feeding sessions. So it’s no surprise they’ve created policies that help their employees navigate those long nights, too.

• Netflix offers 52 weeks of paid leave to all salaried employees, including birth and adoptive parents of any gender.
• Employees also have access to support for fertility, surrogacy, and adoption, regardless of marital status, gender, or sexual orientation.

How to Create a Parental Leave Policy

It’s no easy feat to stack up against the Googles and the Amazons of the world. 24 weeks of paid leave might not be feasible for your company, but that doesn’t mean you can’t create a policy to help set your employees up for success in new parenthood and show them that you care. Below, we’re laying out a few tips to consider when creating a paid parental leave policy.

Get Feedback from Your Team

Your team should be the first place you look when creating a parental leave policy. They may have expectations you haven’t considered, and although you might not be able to offer everything they want, their feedback can give you a good baseline to start with.

Do a Competitive Analysis

When it comes to retaining your employees, understanding what your competitors have to offer can go a long way in keeping them under your roof. Dig into parental benefits that your competitors—geographically, in your industry, or in your employee size range—offer to learn what the standards are.

Be Inclusive

As we touched on above, creating inclusive parental leave policies levels the playing field between genders in the workplace. You may not decide to offer the same amount of leave for all parents, but you should consider non-birthing parents in the equation.

Be Aware of Parental Leave Laws

This may be a given, but you’ll need to research the laws in the states and countries where your business operates—plus where you have employees. If you have remote employees, this becomes especially important. Brush up on the laws in each location and ensure you have resources ready in case you hire employees in new areas.

Factor in Short-Term Insurance

If you already offer short-term insurance as part of your benefits, you may be able to factor that into your paid leave policy. Follow up with your insurance broker to see what your options are.