Dec 13, 2019

Corporate America is pressured to boost paid parental leave

Illustration of a stroller with money inside of it.

Illustration: Aïda Amer/Axios

As legislation moves forward to give 12 weeks of paid parental leave to civilian federal workers, corporate America is feeling pressure to follow suit — or at least offer sweeter policies.

Why it matters: The U.S. is the only industrialized country that doesn't mandate paid leave for new parents. While there are federal rules about unpaid leave, most companies set their own rules, with an eye toward their bottom lines.

Driving the news: After the House approved the bill on Wednesday, the Business Roundtable, a group of CEOs whose companies employ more than 15 million, wrote letters urging Congress and President Trump to make paid family leave — a broader category than parental leave — available to "as many working Americans as possible."

  • Ginni Rometty, the CEO of IBM, signed the letter, saying that "while most Business Roundtable companies provide very generous paid leave, there is a need for economy-wide action."
  • Just 16% of private employees had access to paid family leave in 2018 — which includes maternity and paternity leave — according to the latest data from the Bureau of Labor Statistics. That's up from 10% in 2010.
  • This year, the Business Roundtable said its member companies' sole purpose was no longer profits — and that it would prioritize investing in its employees.

Between the lines: One reason corporations might push for federal legislation — rather than act on their own —"could be that it saves them from having to bear the costs of the policy," Aparna Mathur, director of the AEI-Brookings Project on Paid Family and Medical Leave, tells Axios.

  • "The government programs under consideration in this White House do not raise taxes on businesses, but instead allow employees to pull forward from either the child tax credit that they are eligible for or social security—so there are no additional costs on business."

The big picture: The tight labor market — with the unemployment rate at a 50-year low — puts workers in a bargaining position.

  • Private employers "now have to compete with the [government] and up their own games to attract and retain the best talent," Meredith Bodgas, editor of Working Mother magazine, tells Axios.

Details: The 12-week paid leave provision was tacked on to a larger bill that creates a U.S. Space Force — a Trump priority — as a new military branch.

  • The bill, which is expected to become law, will likely be a game-changer not just in space warfare, but also for the 2.1 million Earthlings who work for the federal government.
  • But: there are more than 150 million people in the U.S. workforce.

Where it stands: Only a handful of companies — primarily corporate giants — offer anything nearly as rich as what the government is poised to pass.

  • According Glassdoor, Microsoft leads the pack among enlightened companies, with "five months paid leave to all new birth mothers, and three months for fathers, adoptive parents, and foster parents."
  • Microsoft also said it will only work with suppliers and vendors that offer employees 12 weeks paid parental leave.

Glassdoor also gave kudos to Netflix ("a full year of paid time off to both mothers and fathers"), Deloitte and KPMG.

  • "It's the larger employers who tend to start offering new benefits in order to attract and retain employees," Mathur says.
  • Small businesses face steeper challenges, she said: "It's a tight labor market for them, but the costs of providing the benefit are much higher."

By the numbers: Only Washington, D.C., and eight states — including California, New Jersey, New York, and Washington — have paid family-leave programs on the books or pending, according to MarketWatch.

  • As Axios' Rashaan Ayesh reports: The U.S. is the only member of the OECD to not offer paid maternity, paternity or parental leave, according to a UNICEF study.
  • Estonia provides the most maternity leave — at 85 weeks — while Japan provides the most paternity leave: 30.4 weeks, UNICEF found.
  • On average, OECD nations provide 53.9 weeks of paid maternity leave and 8.1 weeks for paternity leave.

Don't forget: Often it is unions, not politicians, that make strides in family leave policies. The United Federation of Teachers said last year that "months of intense negotiations with the Department of Education" enabled it to secure 6 weeks of paid leave for its members.

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