It’s no secret that the United States is the only industrialized country without national paid parental leave. With global influences and D&I strategies, the fact that an increasing number of states, as well as companies, are offering paid parental leave programs to fulfill this gap is not surprising. This trend shows promising progress in this area, however, the absence of standardization also brings about complex scenarios to navigate. Many employers, especially small life science start up employers with a national or global footprint, are asking what the best practices are for paid parental leave.
Leading the charge: Examples of Successful Parental Leave Programs
With companies visibly championing their paid parental leave programs, we know that large organizations, such as Novartis, J&J and Sanofi, are all onboard with global paid parental leave. It is also becoming evident that small to mid-sized life science organizations have started offering similar programs in the United States. It stands to reason that this trend will continue in which paid parental leave will eventually become the norm across US companies.
So, how should your emerging biotech handle this? Do you want to get ahead of the curve and offer this benefit asap? Well, maybe. There are clear benefits, as well as some practical considerations.
The benefits are vast, ranging from the obvious advantages to the team member being afforded financial peace of mind to bond with their baby, to the broad-reaching long-term societal impact for generations to come. From a business perspective, there are reports of paid parental leave correlating with higher attraction and retention among organizations that offer it ~ think Employer Brand of Choice. There are even accounts of top performers choosing companies that have paid parental leave over companies that do not, when multiple offers are in play.
A key piece lies in paid parental leave programs that are gender neutral, and with consideration for non-birthing parents. This accounts for adoption, surrogacy and same-sex parents. In programs where only the ‘birthing’ parent is covered, we may be losing the essential benefit of fostering equity and inclusion, which negates a main positive outcome of such a program. A primary intent is to enable a level playing field that balances career and family for all parents involved. Without this, we would be off-kilter by only allowing the ‘birthparent’ paid baby time, while falling behind on career. Whereas the ‘non-birthing’ parent(s) would be all work and lacking the support to participate in critical bonding time. Most importantly, let’s not lose sight of baby’s experience in this scenario; at the end of the day, it’s best for baby to have a balance of parental figures (thus, tying in part of the long-term benefits to society and future generations).
Going Above and Beyond State Offerings
Beyond this heart of the matter, there are also critical practical implications to consider. This is where it may become more complex, especially in light of various state and local regulations, such as New York, Massachusetts and California, to name a few.
Companies in areas with state programs often ask if they need a paid leave program beyond what the state is offering, or if they should ‘top off’ what the state is offering to keep their employees’ pay whole while on leave. Before answering that, it is important to understand the paid parental leave for that location, as that may bring about unique considerations.
First, supplemental pay parameters may vary. In most locations that have government programs, such as Massachusetts, the employer can offer supplemental pay above what the state program offers (which is only a portion of a week's salary). Keep in mind, this supplemental pay can be in the form of a pre-existing employer paid benefit that is already available. For example, use of vacation (or other PTO) or short-term disability pay may run concurrent with paid leave from the state. However, keep in mind that use of PTO would need to be an employee option in most locations, rather than an employer mandate.
There are also locations that require employers to supplement the state paid family leave wages so that the total equals 100% of the employee’s gross weekly wage. San Francisco would be one such location. If you are doing business in this location than the question about ‘top off’ would already be answered for you.
From a different angle, in New York, a company may request reimbursement from the PFL insurance carrier for providing supplemental paid parental leave. This would be an important detail to consider which may sway your decision from a financial perspective.
Does Your State Offer Paid Parental Leave?
States that currently have Paid Parental Leave Laws/Programs include:
Maryland (to start 10/01/23)
Keeping it Equitable for All Workers
The variations by government mandates in certain locations also bring about the topic of internal equity for your workforce. Would it be fair for your employees in New York to enjoy paid parental leave, while your employees in, let’s say, Ohio do not have any paid parental leave? Or, visa versa, for your Ohio employees to have 100% company paid parental leave, while your New York team has only the percentage of their salary provided by the state? Some things to consider -
Another practical and essential consideration in implementing a paid parental leave program, or complying with a local program, is ensuring a plan for coverage. This is of particular importance for small companies with less resources. You still need to operate your business; obvious. And, hopefully do so without inadvertently putting an undue burden on existing employees by having them do two jobs in order to keep operations running.
Although this may be unpopular to relay, it is important to acknowledge to mitigate this potential issue: There are situations where employees have become resentful due to feeling put upon to cover peers who are seemingly home getting paid to post pics of baby smiles on Facebook all day. What’s more, peers doing double duty aren’t getting paid double to do it.
Fortunately, this can be alleviated (minus the seldom unfortunate naysayer). With some thoughtful workforce planning, this can be well received and perceived as a benefit to the whole team that promotes equity, inclusion and overall humanity. Some things to consider -
Spread out among existing staff?
Is training needed to cover?
Might the parent want to do a little bit of work from home while on leave?
How Should We Structure OUR Paid Leave Program?
Clearly, there are a number of factors in determining how to handle paid parental leave for your business. The benefits of equity and inclusion, as well as, attraction and retention are being revealed by large organizations offering these programs. Implementing a company paid parental leave can also standardize for internal equity. However, there are financial considerations, coverage resources and local compliance variations to practically consider and properly plan for.
Much like many other policies and practices in your business, offering paid parental leave is not a one size fits all, or at least not in the US where there is no national program. Let’s see this as another opportunity to carve out what works best for your company. A good starting point is to determine what cultural footprint/foundation are you looking to build out as your people foundation, and what’s ideal for your organization. Then, work from there to see how you may be able to apply that ‘ideal state’ throughout your workforce, as opposed to trying to fit your business into every other variable.
Or, you may determine that now is not the right time for your company to implement a paid parental leave program. Take a measured and intentional approach that works for your organization long-term.
-Natalie Lentz, SPHR
Strategic HR Advisor
Chameleon Strategies, LLC
Looking for a Strategic Thought Partner to discuss your People Strategy needs? Contact us today! We have a proven track record of partnering with start up life science companies to build the think bridge between science strategy and people strategy.
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