Beyond Maternity Leave: Rethinking Your Paid Leave Policy

We recently told you about what you need to do as soon as one of your employees tells you she is pregnant. Now, we’d like to help you think about what you should consider if you are contemplating offering paid leave benefits.

Recently we have seen a large increase in the number of conversations we are having with our customers about implementing paid maternity leave polices.  Generally speaking, these businesses are calling us for one of two reasons: 

1) An employee just gave them the exciting news that she is pregnant.

2) A highly desirable prospective employee has asked them about their paid leave policy and their response may determine whether or not this candidate joins them or another company with a more competitive offering.

Either way, we see this as great news!  It is wonderful that more and more organizations are considering providing paid maternity leave in order to attract and retain talent.

However, there are important factors you’ll want to consider when creating your paid leave policy that you might not have thought of.

Deciding how much paid leave to give
When drafting your policy, you first want to determine how much leave time is going to be paid. Then, you need to dive deeper.  It is not enough just to have a policy that declares pregnant employees get 10 paid weeks of maternity leave.  For reasons that will be discussed below, you need to establish how much of the paid leave you are offering is for the disability portion of the leave and how much is for the baby bonding portion of the leave.

For example, if you decide to provide 10 paid weeks of maternity leave, perhaps the first six weeks are designated the “pregnancy disability portion” of the leave and the following four weeks are for the “baby bonding portion” of the leave.

Read our previous post on maternity leave for more information on the difference between bonding leave and disability leave.

If you offer short-term disability insurance to your employees, or if your employee works in a state or city that has a disability insurance program or paid parental leave law, you may decide (as a lot of companies do) to supplement what the employee is receiving in short-term disability insurance benefits.  If you decide to do this, be sure to check with your HR team and your disability benefits carrier to find out if doing so would impact the disability benefits the employee receives.

Parental parity
Dads, same sex partners or spouses, and adoptive or foster parents want time off to bond with their new child too!  And these groups have been successful in their assertion that they are being discriminated against when their employers provide paid maternity leave but not paid paternity or parental leave.  Because of this, we encourage you to implement parity standards in your policy.

When you determine how much leave is going to be designated as the “baby bonding portion” of the paid leave for new moms, realize the same amount should be offered to all new parents.  In the example above, if you earmark four weeks for baby bonding, plan on providing that same benefit to all of your employees who become new parents, whether they physically deliver the baby or not. Remember, it’s not just a nice thing to do but could have legal implications if you do not.

Disability parity
No one chooses to suffer from cancer, heart attack, stroke or mental illness.  They also don’t choose to be hit by a bus or severely injured in a car accident.  However, most new parents do decide to get pregnant.  Why then are companies planning for and providing paid leave to employees who experience happy (and planned) events, when they do not also provide paid leave to employees who experience (if you’ll excuse the language) crappy events?  These unfortunate life events can also be life changing and have serious financial impact on employees. By and large, they are not considered by employers in formulating paid leave programs.

We would suggest altering your perspective. 

Once you determine the amount of time designated for the paid disability portion of the leave under your paid maternity leave policy, also consider providing the same amount of paid leave to employees who experience any serious medical condition that requires they take a leave of absence.  In the example above, if you provide six weeks of paid pregnancy disability leave to new mothers, consider providing six weeks of paid disability leave for any employee with a serious medical condition requiring a medical leave of absence. Show all of your employees, regardless of the disability they experience, that they are valued and supported by the organization.

The recommendations above will help ensure that you are not only offering a great benefit to employees but also one that is fair and non-discriminatory!  As an added bonus, a policy like we have described here will prove enormously helpful in the constant battle to recruit and retain top talent.  We call that a win-win!

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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