The U.S. still lags far behind other developed countries in allowing paid leave to new parents, but companies that have invested in more generous policies say the return is worth it.
The United States differs starkly from other developed countries in its lack of paid leave for parents. As the Financial Times recently reported, the average length of paid leave available to mothers in OECD countries has risen from 17 weeks in 1970 to a bit over a year today. Canadians can take up to a year off with their income partly replaced through employment insurance. New parents in Sweden can take 480 days at 80 percent of their usual pay.
In the U.S., the average paid leave was zero in 1970—and remains zero.
There is still no federally mandated paid leave in the U.S. Parents are guaranteed up to 12 weeks off, unpaid, through the Family and Medical Leave Act, but only if they work for a company with 50 or more people. That means a large percentage of workers aren’t eligible. Among those who are, mothers (but not fathers) can claim short-term disability to make up for part of their lost income, usually for six or eight weeks. The average maternity leave lasts 10 weeks, although 29 percent of employed mothers don’t take any leave at all.
Only three states currently provide paid family leave (for those recovering from their own illness or caring for sick relatives as well as caring for new babies): California, New Jersey, and Rhode Island. New York will join them, starting in 2018, and the District of Columbia just passed a paid leave law.
By and large, employers haven’t rushed in to fill the gap. As of June 2015, only 12 percent of private-sector employees had paid family leave through their company, according to the U.S. Department of Labor. It’s no surprise that when major corporations roll out generous family leave policies, they make headlines—like when Netflix announced that employees could take unlimited paid leave during a child’s first year.
In November 2015, the software giant Adobe extended its family leave from 16 weeks off for a primary caregiver to 26 weeks, with full pay. Donna Morris, an executive vice president, wrote of the decision: “Our employees are our intellectual property and our future. The investment is unquestionably worth it.”
Amanda Sanchez works in Adobe’s Lehi, Utah, office as a content strategist. She recently came back from a six-month leave after having a baby in March 2016. “A few months into my pregnancy, Adobe announced 26 weeks of fully paid leave. It was incredible,” she says. “I could take that much time off of work and not worry about how we were going to make ends meet.”
Apart from the financial relief, there were other benefits. “I was able to get breastfeeding to work successfully. I did sleep training, so I was getting a full night’s sleep before I started working again. When I talked to my friends who didn’t have the time off I did, they told me about the heartache they felt having a newborn so young and having to go back to work. I felt spoiled.”
Online retailer Etsy used to allow 12 weeks of paid leave for a primary caregiver and five weeks for a secondary caregiver. Last April, the company extended that to 26 weeks for all new parents, to be scheduled over the two years following a birth or adoption (eight of the weeks must be taken continuously within the first six months). Juliet Gorman, the director of culture and engagement at Etsy, says staff were overjoyed. “The response from employees was: ‘This is the best policy ever. I’m never leaving.’”
Patagonia, the outdoor gear and clothing company, provides paid leave and has offered on-site childcare at its headquarters in Ventura, California, for 33 years. Dean Carter, the vice president of human resources, says it’s part of the company culture that moms and dads see their kids during the work day.
“I’ve been in board meetings where there’s a nursing baby in the meeting. In the morning here, when you go to the cafe, you see moms and dads with kids on their laps eating breakfast and talking,” Carter says. “It’s not unusual to see a new mom with a baby strapped to her chest while typing and doing their work right at their desk.” For moms who travel for work, Patagonia pays for a caregiver to come along as support.
Providing these benefits is costly, although tax credits mitigate some of the expense of running a childcare center for Patagonia. But Carter says employee satisfaction translates to low turnover (less than half the industry average, he says), which in turn cuts costs stemming from recruitment and training. “It is proven that increased engagement leads to higher levels of service and performance, which also shows up in our continued double-digit sales growth, year on year.”
Despite these kind of initiatives, paid leave in the U.S. hasn’t budged much in 20-odd years. While a few workers enjoy generous family leave benefits, most cobble together vacation and sick time (if they have it) to use when a child is born.
In a survey conducted for DOL in 2012, two-thirds of those who took leave under FMLA said it was somewhat or very difficult to make ends meet. Research has shown that paid leave increases the likelihood of doctor visits and vaccinations for babies, extends the duration of breastfeeding, and has mental health benefits for mothers. With the move to extend paid leave to 26 weeks, parents are able to return to work when their babies have started solid foods, are possibly sleeping through the night, and are more used to routines.
Across the U.S. economy, more companies are adopting and expanding paid family leave, says Jeffrey Hayes of the Institute for Women’s Policy Research. But these programs mostly come from large corporations with huge HR departments. “Many smaller businesses would like to provide their employees with paid leave by participating in a cross-employer pool, such as offered in California, New Jersey, Rhode Island, and soon, New York,” he says.
Hayes believes the U.S. will have a national policy at some point, but that we’re “probably a decade away in terms of distributing benefits.” In the meantime, he expects a few more states to adopt mandates; that could lead businesses with offices in multiple states to lobby for a uniform national policy.
Companies that have already committed to paid leave say they’re seeing big returns. Patagonia reports that 100 percent of its moms have returned from maternity leave over the past five years. Adobe, tracking 200 U.S. employees who have taken advantage of enhanced leave, says 98 percent have returned to work, compared to 75 percent previously. Employee satisfaction has shot up, says Adobe’s Morris, even among workers who haven’t directly benefitted.
“Some of the compliments we’ve gotten have been from employees who are finished having children, or aren’t even planning families,” she says. “They were super-supportive that this is how we invest in our people.”