How (some) US companies are competing for talent with paid family leave



Kejal Macdonald, the vice president of marketing at THINX, a startup that makes period-proof underwear, was nervous about telling her higher-ups that she was expecting a baby.

“It can be scary to even tell your workplace that you’re pregnant,” says Macdonald, even at a company that’s built its brand on feminist messaging.

After she shared the news, Macdonald was given access to three months of paid leave, a company benefit that is offered to all new parents at THINX, whether they’re the birth parent or not.

Macdonald’s experience at THINX is the exception.

Only 14% of private sector employees in the US have access to paid family leave through their employer. For low-wage employees, that rate plummets to 6%.

However, startups like THINX and an increasing number of larger corporations facing a tight labor market in which employees have more choice about where to work, are interested in retaining top talent and building a family-friendly work culture. To do so, they’ve adopted paid family leave practices for their employees.

“There is a level of humanity in our company that is really refreshing,” says Macdonald.

Kejal Macdonald of Thinx. Photo: Kejal Macdonald

The lack of paid maternity leave in the United States has been controversial for decades. The US is the only developed country without guaranteed access to some form of paid maternal leave. Despite incontrovertible evidence that paid maternity leave makes children healthier, parents more productive and companies more successful, there is little sign Congress, the White House or many state legislative bodies are taking steps to correct the problem.

Instead, it remains up to companies to decide whether to grant parental leave and if they do, how much and to which employees. As employees become harder to find and retain, companies including IBM, McDonald’s, AT&T and Starbucks, among others, have recently improved their parental leave policies, according to The New York Times.

The World Policy Center provides a global perspective on maternal leave. See the dynamic map.

“Employers who are doing pretty good on paid family and medical leave,” she explains, “are often encouraged to provide it to workers they want to recruit and workers they feel they need to retain because of their level of skill, because they want to compete against other similar companies for those workers.”

But what they fail to see, she argues, is that these policies really need to be extended to everyone to boost company morale as whole.

Amazon, for example, makes their policy available to full-time hourly and salaried employees, but not to part-time hourly employees. At Walmart, hourly retail employees have to work full-time to qualify for any paid family leave.

Such gaps in paid family leave policies are rampant. This year, Starbucks and Yum! Brands unveiled revamped paid family leave policies that were lauded for their generosity. Lost in the applause is that the best of these benefits only apply to those who meet restricted criteria.

By leaving low-wage and part-time workers out of their policies, companies have turned access to paid family leave into a “mark of privilege in the United States,” Fink says.

WILL PUBLIC POLICY EVER CHANGE

While the corporate sector marches on with new approaches, the ultimate solution to the paid leave problem is federal policy, says Annie Sartor, Program Director at PL+US.

The Family Leave Insurance Act of 2011, which would mandate paid leave programs, was introduced but not enacted. The Family And Medical Insurance Leave (FAMILY) Act, sponsored by Rep. Rosa DeLauro (Connecticut) and Sen. Kirsten Gillibrand (New York), would provide workers with up to 60 work days of partially paid leave for dealing with a personal health condition, caring for a family member, or welcoming a new child, but passage isn’t imminent.

So, for now, task of providing paid leave rests with a private sector that isn’t meeting the challenge.

Macdonald says companies should start by creating a family-friendly atmosphere in the workplace and then back it up with policies.

“In the scheme of things, especially if you’re an employer committed to retaining talent,” she says, “giving someone three months off is a drop in the bucket not only in their loyalty back to the company but also in retainment over time.”

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