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How Paid Parental Leave Can Improve Retention

How Paid Parental Leave Can Improve Retention

Paid parental leave is an increasingly popular benefit that many employees depend on. As a parent, a newborn can be an overwhelming challenge from the start. Employees work more efficiently after having taken PTO, so it stands to reason that offering paid leave for new parents or parents of sick children would improve company culture, employee satisfaction, and productivity. Read on to find out why paid parental leave is so beneficial, and how you can implement it into your benefits strategy. 


What is Paid Parental Leave?

Paid parental leave, otherwise known as paid family leave, refers to an extended amount of time off whereby an employee is paid fully or partially. This type of leave is typically granted due to the birth of a child or, at times, health concerns. 

These benefits are merely one way in which an organization can showcase its commitment to its employees. Maintaining a strong company culture is a crucial aspect of any organization.


Are Employers Required to Offer Paid Parental Leave?

The United States remains behind other countries in regards to their paid parental leave policies. There is currently no federal legislation requiring paid family leave of any kind, whether fully or partially paid. 

However, there are several states that have enacted legislation regarding paid parental leave. A recent SHRM study found that more states required parental leave payment in 2020 as opposed to the prior year. Most companies have expressed interest in increasing these benefit offerings over the next several years, meaning that the numbers for 2021 and 2022 could be even higher. 

The Family and Medical Leave Act (FMLA) does require up to 12 weeks of unpaid, job-protected leave for certain employees. This legislation is very helpful in that it provides job protection for those employees who need to take the time off to care for their newborn children. That said, many parents will return to work prior to the 12-week mark simply because they can't afford to go such a long time without pay. 


Who Qualifies for Parental Leave?

Because the US government has no federal legislation requiring paid parental leave, the qualifications will depend on your employer’s policy. In some cases, there may be state legislation that establishes qualifications. 

One example of state-mandated parental leave is California. In California, if you wish to qualify for the Paid Family Leave Benefits, you must be unable to complete your regular or customary work requirements, and have lost wages due to providing care for a sick family member or bonding with a newborn child. A qualifying event may also be a family member’s military deployment overseas. You must also be employed or actively seeking employment at the time the paid leave begins. 

In order to qualify for the federal Family and Medical Leave Act, you must work for a covered employer, work 1250 hours during the 12 months prior to the beginning of your leave, have worked for an employer of 50 or more employees,  work within 75 miles of the employer’s location, and have worked for the employer for 12 months or more. 


What Are the Benefits of Paid Parental Leave?

With more employers offering new and improved benefits packages, it is no surprise that prospective employees are seeking out which organizations offer them the most comprehensive packages before accepting job offers. Organizations are navigating this challenge with benefits packages that check all the boxes. 

According to a 2020 SHRM Employee Benchmark Survey, 78% of employers claimed to have expanded their benefits packages. This demonstrates the commitment organizations have to offering strong benefits plans. They are committed because these benefits are good for employees and their overall company satisfaction. Offering paid parental leave is a large part of this effort. By expanding these benefits, you are offering an incentive for employees to seek employment through your organization. 

If benefits packages are a significant factor when looking to attract top talent, then it should be an ever-evolving process. It's a way for your organization to stand apart by showing prospective employees that you value their wellbeing. A great way to do this is to incorporate a comprehensive parental leave plan that offers employees the chance to take time off without having to worry about the pay. 


Should Your Organization Offer Paid Parental Leave?

As we know with PTO, time away from the office can boost productivity. By taking a break from the office, employees temporarily separate from workplace pressures and decrease stress levels. This "stress detox" benefits the physical and mental well being of employees. According to an article published by Psychology Today, "Brain imaging studies show that doing nothing, being idle, daydreaming, and relaxing create alpha waves in the brain that are key to creative insights and innovative breakthroughs." This finding counters the common misconception that working longer accomplishes more. 

We can then take this same concept and understand the value in paid time off for parental leave. The stress of a newborn child can be daunting at first glance. Offering employees the time and space needed to work through this new challenge without concern for losing pay will not only benefit the mental wellbeing of the employee, but also boost your organization's overall retention efforts and, in turn, productivity. 


How Can You Create a Successful Paid Family Leave Policy? 

If you plan to build out a paid family leave policy, then it is crucial you keep these points in mind as you move forward. While there is not much data on the appropriate length of time needed for parental leave, it is a good idea to start with 3 months. This will allow plenty of time for employees to tend to the newborn or sick child without worries or concerns over lack of pay. The guarantees of a job once the leave is complete will help keep employees motivated as they return to work. 

It is also important to remain impartial to gender. Allowing both parents the opportunity to build a connection with their children by spending time with them as they are born, is essential for the development of the parental bond with the child. Any parental leave bias toward a single parent can be detrimental to a home life and cause undesired stress and frustration amongst employees. 

It is important to build a culture within the workplace that acknowledges paid time off for parental leave, regardless of orientation, gender, or age. Consider adopting an incentive program that encourages parents to take leave upon the birth or adoption of a child. 

BernieU Course: Paid Time Off Tutorial: How to Build and Audit a Great PTO Policy

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