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Parental Leave Re-Shapes the Workplace

Expanding laws and recruitment needs are fueling expansion of these benefits.

If you haven’t realized it yet, laws requiring employers to provide paid parental leave are spreading throughout the country and many employers are choosing to add to their benefits package even when not required to do so. If your business has not yet given serious consideration to parental leave, it’s time to do so.

Although nationwide legislation has stalled in Congress, over the past decade states and cities throughout the United States have begun adopting their own versions of paid parental leave laws. New York, California, Massachusetts, Washington State and Washington, D.C., adopted such laws last year.

During his 2019 State of the Union address, President Trump once again endorsed a national parental leave law that was first advanced during his 2016 presidential campaign, declaring that his next budget proposal will include funds for it. Largely the brainchild of his daughter, Ivanka Trump, the original 2017 proposal would have required states to provide new parents and adopted parents six weeks of paid parental leave as part of unemployment benefits.

Although it initially failed to generate much enthusiasm among Republican lawmakers, since her father’s speech, Ivanka Trump, who serves in the capacity of an official White House advisor, has met with congressional leaders to discuss the issue. In addition, Sen. Kirsten Gillibrand (D-NY) and several House Democrats took the step of reintroducing their FAMILY Act from the last session, which calls for employers to provide up to 12 weeks of paid leave.

In addition, a different piece of legislation that was introduced last year in Congress had been embraced by a handful of legislators on both sides of the aisle, along with employer groups like the Society for Human Resource Management (SHRM).

Called the Workflex in the 21st Century Act, the bill would allow employers to voluntarily offer a plan that provides their employees a federal standard of paid leave and options for flexible work arrangements such as telecommuting or compressed work schedules. Both full-time and part-time employees who opt into this plan would receive guaranteed paid leave that exceeds all state and nearly all local mandates.

Enactment of a national law would relieve multi-state employers of the need to comply with what is now a confusing welter of varying laws that exist in different jurisdictions. This fragmented patchwork of rules creates a compliance obligation that is costly to these businesses that operate across the nation. For example, some employers were forced to implement an entirely new payroll system because of varying accrual and roll-over rules.

Democrats objected to the Workflex bill because it would allow employees to draw a “loan” from their future Social Security benefits to be paid during the leave, and because as currently written it would supersede state and local mandates.

In spite of the failure of federal lawmakers and the President to deliver on family leave so far, private employers have been steadily moving in this direction. The concept is gaining popularity because of a highly competitive job market where benefit packages are viewed as a prime lure for job applicants.

The percentage of employees citing the availability of paid parental leave as important to their retention and job satisfaction increased significantly between 2016 and 2018—from 26% to 35% for every type of parental leave, according to the SHRM annual benefits survey. Also showing increases from 2016 are paid paternity (21% to 29%), adoption (20% to 28%), foster child (13% to 21%) and surrogacy (6% to 12%) leave. This trend toward expansion beyond parental leave to other forms of caregiver leave also has grown in a number of states and cities.

Research also shows that employers are adopting parental leave because it boosts employee organizational commitment and engagement. It also offers opportunities for colleagues covering for the employees who are on leave to learn new skills. In addition, it’s been said to actually lower healthcare costs by reducing incidence of maternal depression and encouraging higher rates of breastfeeding, promoting infant health.

One company that recently jumped on the bandwagon is global supply chain service provider XPO Logistics, which introduced comprehensive pregnancy care accommodation and family leave policies earlier this year. The company has also introduced a plan offering a broad range of free healthcare services to pregnant employees.

If you come to the conclusion that you want to get ahead of federal, state and local lawmakers on this issue, or you simply agree that you should bolster your benefits package to attract and retain the best talent, this is good time to put on your thinking cap and take a hard look at paid parental leave.

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