Why Paid Maternity Leave Really Matters
Posted by Kelly Painter
The 2016 summer Olympics have come and gone, and once again, Team USA proved it was #1—at least in terms of sports. But when it comes to paid maternity leave, the United States comes in dead last.
The U.S. is the only developed country in the world that does not have paid maternity leave laws. Yet research overwhelmingly proves that there are myriad personal, societal, and economic benefits associated with this type of paid leave.
U.S Mothers in the Workplace
Mothers-to-be and new mothers in the U.S. face big challenges. According to the U.S. Family and Medical Leave Act (FMLA), companies with more than 50 employees must give workers up to 12 weeks of maternity leave during a 12-month period. However, FMLA mandated maternity leave is unpaid, and for many new families, having a parent take time off without pay is just not an option.
In fact, new parents often incur thousands of dollars in medical costs, and while additional maternity insurance has become easier to get in recent years, not everyone qualifies, and even fewer are fully covered. A 2013 report by Truven Health Analytics estimated maternity costs, including pre-natal and post-natal care, at $30,000 to $50,000, with even insured families paying an average of $2,244 out-of-pocket.
Maternity Leave Around the World
How long is maternity leave, whether fully or partly paid, in other parts of the world? It varies widely, but can be as much as a full year.
In Finland, for example, mothers can spend 17.5 weeks at home with their new child, while receiving more than three-quarters of their total income.
In Canada, the country’s Employment Insurance (EI) program extends maternity or parental benefits to new mothers and new fathers for up to 35 weeks when they meet all the program criteria.
And in the United Kingdom, eligible employees are able to take up to 52 weeks of maternity leave, with 39 of those weeks paid through SMP (Statutory Maternity Pay). Eligible employees receive 90% of their average weekly earnings for the first six weeks, and up to £139.58 ($185) per week for the rest of the paid leave period.
The Business Case for Paid Maternity Leave
While maternity leave laws in the U.S. don’t compel companies to offer paid maternity leave, many companies are choosing to take the initiative. Large American tech companies such as Netflix, YouTube, and Amazon offer some of the most generous private paid maternity leave plans in existence.
It may seem as though companies that pay for maternity leave out of their own pockets will take a financial hit, but the opposite is true. An attractive paid leave policy helps companies enhance their profile and stay globally competitive by building a positive corporate culture, retaining top female talent, reducing costly turnover, and boosting productivity.
In a blog for the Huffington Post, YouTube CEO Susan Wojcicki wrote, “It may sound counterintuitive, but the research—and Google’s own experience—shows a generous paid maternity leave actually increases retention.”
She also shared a remarkable metric that underscored the positive impact paid maternity leave can make in an organization: when Google increased paid maternity leave from 12 to 18 weeks, the rate at which new mothers quit fell by 50%.
And a 2011 study by the Center for Economic Policy and Research found that when employers were required to offer paid leave as part of a California state initiative, more than 90% of them reported either a positive effect or no noticeable effect on profitability, turnover, and morale.
The Hidden Cost of Unpaid Maternity Leave
Paid maternity leave benefits the community as well as the companies that offer it. Women who take paid leave return to work faster, and their children have lower rates of infant mortality, better overall health, higher IQs, and are more likely to go on to higher education.
While paid maternity leave is unlikely to be required by the federal government any time soon, it’s something that every organization should evaluate closely as a means to stay globally competitive and socially responsible. Without significantly increasing costs, maternity leave enables companies to attract top talent, boost key HR performance indicators, and build a reputation as an employer of choice and a positive contributor to the wider community.
Has your organization evaluated closely the advantages of paid maternity leave?
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Kelly Painter, Vice President of Sales, has over 12 years of experience working in talent management.