Intro to Parental Leave: What Employers Should Know about FMLA and Leave Policies

Intro to Parental Leave: What Employers Should Know about FMLA and Leave Policies


NARRATOR: Every year, close to 4 million babies are welcomed by families across the US. That’s a lot of diapers. New parenthood can be a wonderful – and often – overwhelming time. It can also be a bit confusing for employers. VICKI SHABO: I’ve looked very carefully at data on paid parental leave for employers. There’s really nothing to fear. These laws work well both for workers and their families as well as for businesses. NARRATOR: By law, employers may be required to offer job-protected time off and other benefits to employees who meet certain criteria under applicable federal, state, and local family medical leave laws or paid family leave laws. We call this Parental Leave. Some of these benefits are paid and some are unpaid. Parental leave generally includes disability leave for birthing parents, as well as baby bonding leave for birthing parents, non-birthing parents, foster parents, and parents by way of adoption. In the US, the legal requirements are governed by a patchwork of federal, state, and local laws. But there are also things you may want to do to help attract and retain a diverse and talented team. Benefits that go above and beyond your company’s legal obligations. Only a handful of states require paid parental leave by law. None of those programs provide employees with 100% salary continuation and eligibility is usually based in part on an employee’s length of tenure. CNN JOURNALIST: A new company expanding parental leave. Adobe… NARRATOR: Many employers both in states with and without paid family leave laws are choosing to continue their employees wages for a defined period. The evidence shows that paid parental leave is good for everyone: children, parents and caregivers as well as their communities. So, there’s no doubt that paid parental leave benefits families. But what about employers? VICKI SHABO: California was the first state in the country to adopt a paid family leave insurance program. Researchers who have evaluated the California plan showed that overwhelmingly, 90 percent or more of companies in the state and especially smaller businesses had no negative impacts on productivity, profitability, morale, those sorts of things. NARRATOR: So, when it comes to creating a parental leave policy, what’s right for you? A good benchmark for growing businesses is the Family and Medical Leave Act. Signed into effect in 1993, after an epic 10-year battle, the FMLA is a federal law that requires unpaid, job-protected leave, with benefits continuation, to eligible employees. Leave under FMLA can be taken for up to 12 weeks for a variety of scenarios, including for bonding leave during the first year following the birth, adoption, or foster placement of a new child. For private employers, FMLA applies to certain employees working at least 1,250 hours over 12 months at a site with 50 or more employees in a 75-mile radius. But even if your company has less than 50 employees, 12 weeks is a great benchmark and starting point for creating a parental leave policy that you and your employees can feel good about. The next part of the equation is often the most challenging: compensation. How much leave is paid? How much is unpaid? And how are payments made? Here are some questions to ask yourself: Is the employee covered by any state mandated programs? Do they qualify for disability? Can I pay them while they are being paid from another source? A good thing to keep in mind is that for any amount of paid parental leave, an employee does not have to be paid their full regular salary. Some companies prefer to pay a percentage of salary, for example 75% of wages, during the paid portion of the leave period. This alleviates some cash flow pressure for you, while still giving your employee support. Once you’ve identified timeframe and compensation rate, get everything written down in a formal policy that employees can easily access. The words you choose matter. Stay away from “maternity” or “paternity” leave, and use “parental leave” instead. Don’t forget to cross your t’s and dot your i’s. make sure you’re in compliance with applicable laws. Have your legal counsel review any policy or practice relating to parental leave for the states and localities in which your employees work. VICKI SHABO: Paid family and medical leave is now squarely on the national agenda in a way that has never been before. When employers are putting these policies in place on their own, they are seeing higher retention rates, higher moral, higher productivity which is great for the workplace and good for the employees and their families as well.

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