It’s hard to believe, but it was just four years ago that Google was making headlines for becoming one of the first tech companies to implement a parental leave policy that entitled new mothers to full pay during their time out of the office. The new policy also extended to include all parents, domestic partners, surrogate parents and fathers, offering them four months of paid leave – for the first time.

In 2007, according to the Internet Archive’s Wayback Machine, mothers were compensated at just 75 percent of their normal salary for any time out of the office before or after giving birth, while spouses or domestic partners received only two weeks of paid leave.

Times They Are A-Changin’

While its new policy may have once made Google an outlier, things are beginning to change. Today, more and more companies are taking a broader and more inclusive approach to employee benefits – particularly parental leave.

With my first child arriving any day now, not surprisingly, this issue is close to my heart.

There’s probably no better or more timely example than Amazon. Over the years, the retail giant has increasingly faced criticism from employees for having a less-than-accommodating company culture. And not surprisingly, when a company gets a reputation as a “bruising” place to work, it makes the sales pitch to prospective employees a little problematic. So, to quell concerns over its high attrition rates and growing backlash from employees, Amazon announced last year that it would be extending its maternity leave to 20 weeks and implementing six weeks of paid leave to fathers.

Even tech giants like Amazon, it seems, are being forced to acknowledge the importance of fostering an employee-friendly company culture. And the fastest way to do that? Revise those out-of-date parental leave policies.

The Upsides

Google and Amazon are hardly alone. Across the board, tech companies are scrambling to keep pace, with Etsy just the latest in a growing list.

But why? Is it simply a matter of better competing in the war for talent? It turns out that it’s more complicated than that.

Google previously paid new mothers only 75% of their salary while on leave and their partners only received two weeks of paid leave.

Consider the example of Optimizely: Last year, before implementing its own four-month paid parental leave, the company open-sourced the value proposition and financial model its executive team was using in an attempt to validate its proposed new policy. By doing so, the company wanted to make sure that the policy was not only better for employees, but made sense from a business perspective as well.

The experiment led Optimizely to conclude that creating a more broadly inclusive parental leave policy had a significant impact on how employees felt about the company workplace. More inclusive benefits equated not only to a more inviting atmosphere, and happier employees, but to a boost for the company’s bottom line. After all, happy employees are more productive employees – and far more likely to stick around.

Current Policies Leave Much to be Desired

While many companies are beginning to adopt more forward-thinking parental leave policies, and it may seem like the upsides are many, the fact of the matter is that, as a country, we still have a lot of work to do if we’re going to level the gender playing field and make parental leave policies more inclusive – for all employees.

Federal law only protects the jobs of employees on leave for three months.

In comparison with many other countries which require companies to offer paid parental leave (like Sweden, for example, which has required paid parental leave since before World War II), the U.S. lags behind. In fact, the U.S is one of only three countries in the world that doesn’t mandate paid maternity leave.

The other two countries are Papua New Guinea and Suriname, and like these nations, the U.S. places no paid parental leave requirements on American companies. Not only that, but through The Family and Medical Leave Act, the U.S only protects the jobs of employees on leave for up to three months.

This leaves us in a situation where, in the private sector in the U.S., only 12 percent of women receive paid maternity leave, and 25 percent go back to work after just 10 days. A 2015 study by the Society for Human Resource Management found that 21 percent of surveyed employers in the U.S. offered paid maternity leave and 17 percent provided paid paternity leave.

But There’s Hope…

Employee benefits, and leave policies in particular, are still a work in progress, yes, but there are a few things companies can do to address these discrepancies.

Only 21% of employers in the U.S. offer paid maternity leave. 

One way to facilitate equal opportunities for women who take maternity leaves is the involvement of senior leadership in supporting women at the company. Salesforce CEO Marc Benioff launched Women’s Surge, an internal program designed to help women succeed by, for example, requiring one third of participants in meetings be women. And this year, Benioff audited the salaries of Salesforce employees and put up $3 million of his own money in an effort to attain pay equality.

Another solution is for companies to encourage men to take parental leave by providing them with equally generous paternity leaves and a “use it or lose it” policy wherein they can’t transfer leaves to their partners. Facebook CEO Mark Zuckerberg made headlines earlier this year when he announced that he would take two months of paternity leave after the birth of his daughter.

It just so happens that my wife and I are expecting our first child any day now, and once she’s born, I plan to follow Zuckerberg’s example and take advantage of UpCounsel’s own leave policy. Not surprisingly, this issue is close to my heart, and it’s a benefit (or a right) that we extend to all of our employees and encourage them to utilize.

The Road Ahead

Today, only four states (California, New Jersey, Massachusetts and Rhode Island) have improved upon federal laws by implementing paid maternity leave legislation. Mothers in California must receive up to six weeks of leave at 55 percent of their salary, and Rhode Island requires paid leave for four weeks at 60 percent of an employee’s annual salary.

Other states are considering updating their requirements, but, ultimately, the choice to create policies designed to facilitate women’s ability to take paid leave to take care of a new child and create an even playing field for both women and men, rests in the hands of American companies.

Will your company be the next to get on board?

About the author

Matt Faustman

Matt Faustman

Matt is the co-founder and CEO at UpCounsel. Matt believes in the power of online platforms to change antiquated ways of life and founded UpCounsel to make legal services efficiently accessible. He is responsible for our overall vision and growth of the UpCounsel platform. Before founding UpCounsel, Matt practiced as a startup and business attorney.

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