The United States of America is the only high-income country that does not have mandatory paid parental leave or any national family caregiving or medical leave policy. With the share of moms working full-time or part-time rising from 51% to 72%, and more than half of two-parent families having two parents with full-time jobs, there have been huge calls country-wide for paid leave policies to be enacted to offer support to employees and their families.
As a result, the demand for these leave policies has gained traction on both the state and national levels as more advocates who believe it’s long overdue continue to give their votes. States like Michigan and Minnesota now provide employees with 15 and 18 weeks of paid family leave, respectively. On a national level, as of 2020, under FEPLA, all eligible government workers get 12 paid weeks of parental leave within the first 12 months of birth or placement.
Difference Between Paid Parental Leave and Family Leave
Paid parental leave provides employed parents with paid time off from work to care for a new child, whether it be through birth, adoption, or foster care. Depending on the case, it could be specifically given to only mothers, fathers, or both.
Meanwhile, paid family leave or medical leave refers to leave of absence available not only to parents with new children but also to those who need to take care of a seriously ill family member. It also includes medical leave for a worker with a serious injury or illness.
Why Is Paid Family Leave Important?
Paid family leave is likened to an insurance program set up for someone who needs to go on leave, usually around a qualifying event, through contributions from both the employer and employee.
This means employers can decide to cover the full salary expenses for parents on leave or offer reduced pay. However, in states like Michigan, small-scale employers (ones with less than 25 employees) are not expected to pay the employer contribution; rather, paid family leave is funded with employee payroll contributions.
Ever since many U.S. states began to implement paid family leave policies, studies have shown how it has benefited families and children, in particular. For instance:
- According to a report from CNN, it has reduced infant mortality by up to 10%.
- Family leave paid during infancy increases the likelihood of breastfeeding and lowers prenatal stress, which is important to infant health.
- It also ensures infants get well-baby care visits and vaccinations.
- There’s also a decreased likelihood of postpartum depression and parenting stress when paid family leave is offered.
How the U.S. Compares to Other Countries
The U.S. is one of six countries in the United Nations, including New Guinea, Suriname, and a few other island nations in the South Pacific, and the only country among 41 nations that make up the Organization for Economic Cooperation and Development (OECD) and the European Union (EU) without a mandatory paid leave for new parents. That means U.S. federal law does not guarantee private employees will get 12 weeks of paid parental leave during a qualifying event. In fact, as of 2022, 75% of US civilian workers do not have access to paid leave.
Despite attempts to enact paid leave policies, the US still lags behind other developed countries. The shortest duration of paid leave among the other 40 OECD countries is two months, as opposed to the US’s 12 weeks for government employees only.
Estonia, for example, provides dedicated workers with more than a year and a half of paid leave after becoming new parents; no other country comes close. A few other countries, notably Bulgaria, Hungary, Japan, Austria, Slovakia, Latvia, Norway, Lithuania, and Slovenia, offer more than a year’s worth of paid leave too.
According to OECD statistics, the majority of mandatory paid leave in 20 of 41 countries like Canada, Israel, Switzerland, and Slovakia is maternity leave—paid leave available to mothers expecting to give birth or adopt a baby soon.
Now consideration has been given to fathers in similar situations, allowing them to receive paid paternity leave in 34 of the 41 countries. Most countries provide two weeks or less to fathers for paid paternity leave. However, there are a few exceptions, especially in countries like Japan, Korea, and Portugal, where expectant fathers get up to 15 weeks of paid leave.
Furthermore, the data reports that almost all 40 developed countries pay new parents at least half of their salary while on leave, with some covering 100% of the new parent’s regular salary.
Economic Benefits of Paid Family Leave
The National Partnership reports that families and children are not the only beneficiaries of paid family leave. If taken seriously, it will improve the bottom line of many organizations and the economy as well. Let’s find out how:
Employee Retention and Satisfaction: Paid family leave is one of the best ways an organization can demonstrate its commitment to the well-being of its employees. When you provide financial support during critical life events, such as the birth or adoption of a child, your employees will feel valued and are more likely to remain loyal to you. Plus, it brings about increased job satisfaction, which, in turn, contributes to higher productivity and a positive work environment.
Reduced Turnover Costs: 71% of employees with access to Paid Family Leave said it allowed them to continue to work. Meanwhile, during the pandemic, 10.6 million workers cited childcare as the reason why they left the workforce, and 11.7 million more cited childcare as the reason why they reduced their hours. Among those without paid family leave benefits, over one-third (34%) said it would have helped them to continue working, and 38% of all unemployed workers believed it would have helped them return to work sooner. Having paid family leave helps reduce unnecessary turnover and saves costs.
Competitive Edge: Given that prospective employees, especially those at the pinnacle of their careers, are looking for companies with benefits like paid leave, and it could be the determining factor as to whether or not that employee could continue to work, having paid leave helps distinguish companies as progressive, employee-centric, and showcases that you care about employees holistically. This gives you an edge in recruiting and bringing in top talent.
Employee Engagement, Particularly Women: Research indicates that paid family leave significantly influences women’s participation in the labor force. States implementing paid leave policies saw a substantial decrease in the rate at which women left their jobs post-birth. In the first year, there was a 20% decrease and a 50% decrease after five years. Paid family leave, over time, almost eliminated the employment participation gap between mothers of young children and women without young children. Additionally, it was found that about 30% of women lacking family-paid time off exited the workforce within a year of childbirth, and 20% did not return for more than ten years.
As more U.S. states embrace the idea of paid leave programs and continue to work out their policies, organizations that want to thrive in the long run should also set up programs with tax cuts to ease the burden on employees who are required to contribute using their wages. Doing this will continue to pay dividends in talent acquisition, retention, engagement, and productivity, allowing your organization to have a competitive edge and invest in your employees for the long term.