By Rachel Byers, PhD, CPA
Published July 2016
Over the past 2 years there has been a wave of change sweeping the U.S. workforce that relates to maternity leave benefits. Not only has there been an increase in discussions on the issue, but companies and state and local governments are leading the charge by expanding their parental leave policies. Doing so has had the effect of highlighting the fact the U.S. is the only country with an advanced economy that does not have a national requirement entitling mothers to paid maternity leave (OECD, 2016). With the momentum as of late, it will not come as a surprise if the U.S. sees a change at the federal level over time.
According to the Organization for Economic Cooperation and Development’s (OECD) (2016) investigation of parental leave systems across OECD and European Union countries, “on average…mothers are entitled to just less than 18 weeks of paid maternity leave around childbirth” (p. 2). With no policy at all mandating paid leave, the U.S. clearly falls short of our global counterparts. A factsheet released by the Department of Labor (DOL) in 2015 notes that only 12% of the U.S. private sector workforce has access to paid leave through their employer. Currently, the Family and Medical Leave Act of 1993 (FMLA) is the reigning federal law on the topic. It requires that employers hold jobs for covered employees, but not pay them, for up to 12 weeks should the employee need to tend to a qualified family or medical issue (including pregnancy).
Recently, several companies, states, and municipalities have taken it upon themselves to change their parental leave policies. Some companies have updated their policies to include or increase the time period for which their employees receive paid maternity leave. The State of New York and the city of San Francisco recently passed parental leave laws with never before seen time limits (Milstein, 2016). Chris Lu, the Deputy Secretary of Labor, noted that in March of 2016, Vermont became the fifth state to pass paid sick leave legislation, joining Connecticut, California, Massachusetts, Oregon, and 24 local jurisdictions enjoying the benefits of paid sick leave policies (Lu, 2016).
It is important to note that paid leave can be beneficial to the providing entity. The DOL factsheet notes, “Paid maternity leave can increase female labor force participation…, which contributes to economic growth” (DOL, 2015, p.2). Further, companies with expanded maternity leave have indicated that offering paid leave has led to a decrease in onboarding costs due to higher employee retention. “And according to Liz Schwab, a Google public affairs manager, when the company increased paid maternity leave from 12 to 18 weeks in 2008, the retention rate for new mothers increased by 50 percent” (Lu, 2016, p. 2).
As noted above, with the increased momentum driving the push for more equitable benefits for expecting mothers, it may not come as a surprise if the U.S. sees a change at the federal level in the future.
Department of Labor (DOL). (2015). DOL
Lu, C. (2016). #LeadonLeave: A Victory for Vermont Workers.
Organization for Economic Cooperation and Development (OECD). (2016). Parental Leave Systems. Retrieved from www.oecd.org/els/soc/PF2_1_Parental_leave_systems.pdf