Businesses Look to Paid Parental Leave Policies to Gain Competitive Advantage

Sarasota, FL (WorkersCompensation.com) – Paid parental leave (PPL) is a benefit that’s increasingly being offered by organizations. Companies seeking top talent are stepping up and offering extremely generous policies. Some tech companies, for example, give employees a year off to bond with a new child. 

Most companies cannot afford to provide such lavish perks. But businesses that develop PPL programs with their unique workforces in mind can gain an edge over their competitors.

“We are in a landscape where our employees really are in the driver’s seat,” said Ellen McCann, SVP Unum Solutions. “Our employees are coming to us looking for robust total reward packages; if we don’t have one, they might go and work for a competitor that has a more robust total rewards package. So we know that PPL is becoming part of a lot of employers’ packages, and that employees are coming to expect PPL. This is really going to be used by us for an attraction and retention tool.”

During a recent webinar produced by the Disability Management Employer Coalition, McCann and a colleague delved into a number of considerations that employers should look at as they design their PPL policies.

PPL Basics

Before defining the specifics of the policy, employers are advised to note a few key points. One, for example, is to ensure the employee has a positive experience.

“We may think [a] policy is great but our employees may not have a good experience taking it,” McCann said. Perhaps, “we didn’t think it through enough, it’s not clear enough, we didn’t anticipate issues that might come up.”

The policy also needs to treat all employees equally. 

“We want to move away from those gender-specific terms, like a ‘maternity leave’ policy or a ‘paternity leave’ policy, for a variety of reasons,” McCann explained. “One [reason] is we want to be inclusive of all our employees. We want to be inclusive of our transgender employees; we want to be inclusive of our nonbinary employees.”

PPL policies should be short, simple and easy to understand. It’s imperative that they focus on their true purpose.

“When we call it a ‘parental leave’ policy we are setting the stage that this policy is intended to provide time for our employees to bond with their children,” McCann said. “There are some traps you can fall into if you forget the purpose of the policy is bonding.”

Considerations

While the policy itself should be short and simple, creating it involves in-depth planning. There are a variety of factors to consider to ensure the policy fits with the specific workforce – and is feasible for the employer.

Eligibility

Who is covered by the policy is among the first issues to address. Whether it is full-timers, part-timers or both depends largely on the demographics of the workforce.

“What does your part time population look like? Do you have a lot? Do you want to give that benefit to them or not?” asked Angela Bennett, AVP of Paid Leave and & ADA Benefit Operations at Unum. “If you have a lot, you may want to include them – or not.”

Organizations with many seasonal workers may want to include part-timers in their PPLs as a means of attracting them year after year. 

If the PPL will not cover part-time workers, it may need to define a cap on hours that would allow eligibility. “A majority of [our clients’ PPLs] cover those working 30 hours or more, which is the ‘full-time’ definition,” Bennett said.  

Next question is the amount of tenure required before the PPL applies. Some organizations allow coverage on day one while others want to reward those who have been with the company for a set amount of time. “If you cover from day one, many [may] work for you but will they stay?” McCann asked. “Or, do you want to recognize service of people who have been with you for a while?”

Another question concerns employees who are fostering a child. Should they be allowed to take PPL? 

“It has gotten a lot of attention in the last couple of years,” Bennett said. “Some employers think bonding is bonding.”

Surrogacy is another area that many employers may consider in the PPLs – not for the surrogate herself, but the parents of a child born of a surrogate. It can be a dicey issue for organizations.

“There are a lot of different types of surrogacy relationships. Both could be the biological parents, or maybe one is, or neither is biological,” McCann said. “If it’s not included in your policy those employees might feel left out. Talk to legal counsel about the pros and cons and how you define it.”

Entitlement

Once implemented, when should the policy kick in? In other words, should it cover employees who’ve had a birth recently, and, if so, how recently?

“You have to draw a line in the sand somewhere,” McCann said. “You will have employees who don’t like it … you are going to have to make a tough decision there.”

The amount of time allowed for the leave should be balanced by how generous the employer wants to be and what the business can handle. The employer also needs to keep in mind other benefits that might be affected and the demographics of their workforces.

“If there is only a limited number of dollars for the total rewards program, do you want to spend it all on PPL?” McCann asked. “It will only benefit a certain percentage [of employees]. You may have older employees with other needs.”

Intermittent leave can be one of the most troublesome issues to consider for PPL. Whether the total time allowed is two weeks, six weeks, 12 weeks or something else, should the employee be required to take it all at once or have the option to take it in increments?

“Intermittent leave can be disruptive to the organization, but think about the employee experience – forcing the employee to take all this time at once and the downstream impact,” McCann said. “If they don’t take it all at once they lose their entitlement. If you have six weeks and it cannot be taken intermittently and they return after three weeks, they’ve lost the rest.”

There is also the impact on the company to consider. Having an employee off for multiple weeks may entail too much time for the work to get done, but not enough time to hire and train a temporary replacement worker.

Additional Considerations

Understanding the workforce and their needs is key to developing a PPL that will help attract and retain the best talent. Some issues that employers may want to also consider include:

1. Concurrency 

Running the leave for PPL and FMLA can be done concurrently, or not. There’s also the question of whether PPL leave should be concurrent with disability leave, in which the mother is given time to physically recover from the birth.

“You really want to work with your counsel on this,” McCann said. “Many employers have one policy. What happens is maybe there is a 12 week policy; the birth mother is disabled by pregnancy for eight weeks, so only given four weeks to bond. The non-birth parent has 12 weeks (to bond).”

2. Job protection. While the FMLA provides job protection, PPLs do not need to. But the speakers say it’s an area in which the employee experience should be considered.

“To say, ‘we will pay you but your job may not be here,’ is not a great experience,” McCann said. “But a smaller employer may not be able to guarantee [the job]. So you have to weight those two things.”

3. Primary vs. secondary parent coverage. Some PPLs differentiate the amount of leave time available for each parent, often with the assumption that the mother should have more time. This can lead to legal problems.

“In most settlements at the EEOC it was how they administered the policy, and they made gender-based assumptions about who would be primary vs. secondary,” McCann said. “In one case, if the father claimed primary status he had to show the birth parent was disabiled or had to go back to work. If the mother wanted to be the primary, she did not have any burden of proof. They were presuming the mother was primary. That was the piece that came under question – making those gender-based assumptions.”

4. Benefits. Many employers extend group health benefits only to employees on PPL, while others continue other benefits or non at all. Again, it depends on the organization.

“Think about the administrative work involved and how generous you want to be,” McCann said. “That’s key.”

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