Survey: Employers Dialing Back Parental Leave

Over the course of the COVID-19 pandemic, many organizations bolstered their benefits offerings to help employees navigate a myriad of new challenges in their personal and professional lives. Employers were tasked with quickly adopting policies to protect workers from COVID-19, while also finding new ways to maintain workforce performance and productivity. A few of the most common benefit enhancements included modern mental health support, more flexible working arrangements, and longer paid parental leave.

Though the world of how and where work occurs has experienced a rebirth over the past few years, some companies are shifting priorities and adopting benefit offerings that more closely resemble pre-pandemic policies. This shift coincides with employers increasingly focusing on cost savings in response to the economic downturn.

Paid parental leave has proven to be one of the most popular employee benefits and an effective way to attract and retain talent. However, parental leave is also a benefit offering that expanded during the pandemic is now being dialed back.

Parental Leave Policies Shift Over Time

Parental leave can look vastly different for many working parents, depending on the state in which a worker resides as well as the industry of work. For some, the minimum legal requirement of paid leave can range as widely as six weeks to 12 weeks – and with The Family Medical Leave Act (FMLA), states are allowed to set their own standards that can be more expansive than the federal law.

Several states enacted or expanded their expanded family leave policies because of the challenges brought on by the pandemic, offering more leave time to support the demand of working parents who were juggling the responsibilities of balancing work from home and helping their child school from home. However, as of June 2022, only 11 states—California, Colorado, Connecticut, Delaware, Massachusetts, Maryland, New Jersey, New York, Oregon, Rhode Island, and Washington—and the District of Columbia currently require paid family and medical leave. That means many workers rely on employers to set family leave policies that are more generous than what is legally required.

The latest SHRM Employee Benefits Survey showed the percentage of companies offering paid maternity leave beyond what is required by state law fell from 53 percent in 2020 to 35 percent in 2022 – and paid paternity leave fell from 44 percent to 27 percent. And for those that reside in one of the 39 states that don’t require employers to offer some level of paid leave to parents, this new trend in companies downsizing parental leave policies can have a vastly different outcome for many working parents and create a new need for other areas of support, like childcare support services and flexible working arrangements.

Having access to employer paid leave remains a critical benefit for working parents. In fact, workers continue to rank family care as a priority benefit offering year over year. According to the SHRM study, the importance of parental leave benefits remained virtually unchanged between 2020-2022, with 82 percent of survey respondents ranking parental leave as ‘very’ or ‘extremely important’ to them in their benefit offerings, consistent with the findings from a Mercer study showing that company-sponsored parental leave grew sharply in 2021.

Paid leave for parents has been shown to have many physical, emotional and mental health and well-being benefits. According to APA, paid leave can help parents briefly shift their focus from income to bonding with their new child. When it comes to adapting to the demands of parenting, having the time and flexibility to establish a routine is key.

Key Takeaways

If employers are reducing paid parental leave, they must holistically evaluate the impact that change has on the entire employee base and consider what other areas of support are needed to help parents navigate new stages of life.

Offering enhanced benefits like childcare services or flexible working arrangements to help parents balance work and life responsibilities is key to attracting and retaining working parents. With less parental leave time, parents will need to lean on childcare services as a support system. Connecting new parents with comprehensive childcare services can reduce the stress and financial burden.

In addition, leading companies will find ways to support parents through the entirety of the parenthood—with less parental leave time, employees will need the flexibility to work hours that support them and their child’s health and well-being as they grow.