Employers are increasingly sensitive to the need to create a more inclusive workplace culture. Could paid parental leave programs be one way to help meet that goal?

In her article “Rethinking Paid Parental Leave” in the October issue of Benefits Magazine, author Cheryl Mostrom Cecil, CEBS, SPHR, explains the current environment for paid parental leave in the United States and discusses considerations for employers when looking at program design. Cecil is chief people officer at Fennemore Craig, P.C., a large, multistate law firm based in Phoenix, Arizona.

“Costs aside, the events of 2020—including a global pandemic and widespread social unrest in the U.S.—created profound and immediate changes to how individuals view work. These developments also prompted many employers to reevaluate their obligations to employees and consider ways to make the overall well-being of their workforce a greater priority,” Cecil explains.

Expanding eligibility for paid parental leave to nontraditional family arrangements by including birth and nonbirth parents and same-sex partners, is an option employers may consider to help improve well-being and encourage inclusivity. In addition to promoting inclusivity, a gender-neutral paid parental leave policy can encourage greater use of paternity leave by fathers, who historically have underutilized leave even when offered, Cecil writes.

Employers also may want to focus on program design that prioritizes the needs of low-wage employees, workers of color and other marginalized groups. Many current parental leave programs disproportionately leave out the workers who are least able to finance their own leaves, Cecil notes.

While there are proposals addressing paid parental leave at the federal, state and local government level, employers may choose to take action on their own. Cecil highlights the following components typically found in the “gold standard” of paid parental leave policies and practices.

• Comprehensive workforce coverage (picking up part-time employees who tend to be more diverse and lower paid)

• Flexible eligibility (shortening required employment to receive benefits, more likely covering younger employees and those newer to the workplace)

• Broad reasons for leave (expanding beyond childbirth to include bonding, adoption and possibly foster placement)

• Inclusive definitions of parent and family (offering gender-neutral policy provisions and nontraditional family arrangements)

• Generous income replacement (paying 70% or more of salary decreases the financial burden on the average family, but a higher percentage may be needed for lower income earners)

• Employee discernment in utilization (giving families opportunities to decide the best way to use the leave within the time frame allowed, typically 12 months)

• Strong job and antiretaliation protections (including training managers and supervisors)

• Intentional outreach and informing of all eligible workers (regular communication and education campaigns to increase awareness)

• Simple application and prompt benefit delivery (reducing obstacles to obtaining benefits in order to increase utilization).

“One way to become an employer of choice in the current tight labor market and position for future success is to invest in employees proactively,” Cecil concludes. “This endeavor may very well include paid parental leave.”

Kathy Bergstrom, CEBS
Senior Editor, Publications at the International Foundation of Employee Benefit Plans