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Why Paid Maternity Leave Really Matters

Posted by Kelly Painter

paid maternity leave

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.

When it comes to paid leave, only a fraction of U.S. workers in the private sector are covered through their employer—as little at 12%, according to the U.S. Department of Labor.

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?

Why Empowering Your Employees Equals Better Business

People want to work in a place where their voice is heard. They want meaningful, rewarding, and enjoyable work. Are you providing such a workplace for your employees? Empowering your workforce can help increase productivity, reduce costs, improve communication, and so much more. Plus, empowered employees are more loyal to the company and engaged in their work.

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About Kelly Painter

Author

Kelly Painter, Vice President of Sales, has over 12 years of experience working in talent management.

3 COMMENTS Join the discussion
  • Paige Kat September, 19, 2016

    At the company where I work, most women who give birth quit their job. They put family above career and understand the importance of taking care of their newborn. Most of the time, they re-enter the workforce weeks or years later in different companies or domains.

  • Avery S. September, 20, 2016

    Women tend to return to work too soon, which eliminates the possibility of bonding with their child and causes health issues for both of them. Other women quit their job in order to take care of their family. When choosing to return to work, they can experience low productivity or job dissatisfaction.

  • Talan Harvester September, 20, 2016

    Unpaid maternity leave has a big impact on many levels. If a woman returns to work, she feels guilty, can suffer from depression, and often finds it difficult to adapt to the new lifestyle. If a woman chooses to be a stay-at-home mom, her family can be financially vulnerable, and her retirement fund will stop growing. From a company’s point of view, today’s workforce is composed of almost 50% women, so not having a law that protects the formation of a family can have long-term disadvantages. On the other hand, paid leave is expensive, and not all companies can support it. 

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Guest September, 20, 2016