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Paid Parental Leave – Gaining Traction?

Paid Parental Leave - Gaining TractionOne important employee benefit that I increasingly hear about, both in Iowa and nationally, relates to paid parental leave.

This topic made headlines this past December when paid leave was included for federal civilian workers in the National Defense Authorization Act for Fiscal Year 2020. This Act provides up to 12 weeks of paid parental leave in connection with the birth, adoption, or foster care placement of a child for employees covered by the Family and Medical Leave Act (FMLA). This new law applies to leave taken in connection with a birth or placement occurring on or after October 1, 2020.

Paid Parental Leave Offered by Private Employers

The United States is the only industrialized country without a nationwide guarantee of paid parental leave. Private employers in the U.S. can voluntarily offer paid leave benefits. One national survey found that 40 percent of employers offered a standalone paid parental leave plan for employees, and of those, 63 percent offered full wages during the entire leave duration.

As of March 2019, the U.S. Bureau of Labor Statistics reported that 18 percent of all workers have access to paid family leave while 35 percent of the highest wage earners have access. Part-time employees are less likely to enjoy this benefit. Additionally, larger organizations with over 500 employees and certain industries are more likely to offer access to paid family leave.

Paid Leave in Iowa?

In Iowa, data about the prevalence of paid parental leave offered by private Iowa employers is seemingly difficult to find. Perhaps it is available, but this information does not appear to be easily accessible. Overall results from our 2019 Iowa Employer Benefits Study© revealed that 73 percent of Iowa employers offered ‘maternity leave’ while 51 percent offered ‘paternity leave.’ However, the survey questions did not specifically relate to whether or not these benefits were ‘paid’ by employers – so clarifying research is needed. (More about this at the end of this blog)

Only a few states mandate paid maternity leave. Iowa is not one of them. For women employees in the state of Iowa, Iowa law (Chapter 216 of the Iowa Code) prohibits employers with four or more employees from denying a woman’s request for up to eight weeks of unpaid leave to address a physical disability due to pregnancy, childbirth or related medical outcomes. There is no requirement that a woman works a previous amount of time or hours prior to unpaid leave. Again, employers can voluntarily pay for this leave.

The Family and Medical Leave Act (FMLA)

The FMLA requires covered employers with at least 50 covered employees (among other criteria) to provide up to 12 work weeks of unpaid leave in a 12-month period for new parents after the birth or adoption of a child. The focus is on job protection, not income replacement. The FMLA is gender neutral, but in order to qualify, the employee must meet certain requirements.

An estimated 60 percent of employees have access to leave under FMLA. Generally, employees who work for employers with under 50 employees or work part-time schedules do not have access to FMLA. But in Iowa, as mentioned earlier, covered employees have unpaid coverage up to eight weeks if employed by employers with four-plus employees.

Proponents of Paid Leave

Proponents of paid leave believe that the new federal employee law should serve as a guide to private employers. However, federal employees do not receive paid leave while caring for a sick family member or recovering from a serious illness. Advocates for paid leave desire a broader approach to include both paid family and medical leave that would cover time off for illness and caregiving.

Proponents argue that paid leave boosts morale and productivity, in addition to labor force attachment to the employer. Mothers who receive maternity leave return to their employers and are more likely to stay. Having a paid parental leave policy can be a powerful tool to attract job seekers, especially when a majority of employers do not currently offer paid leave. Currently, paid family leave on a national basis is gathering interest by both Republicans and Democrats, specifically through the House Ways and Means Committee on Capital Hill. The big stumbling block, however, is how such a program would be financed.

Summary

Because paid parental leave remains a mainstream discussion that employers wish to learn more about, and given the lack of Iowa-specific data on the prevalence of this important benefit, our upcoming 2020 Iowa Employer Benefits Study© will address this topic with Iowa employers. From this, we will learn how popular (or not) this benefit is, and about the many components found within paid leave, such as the number of weeks offered and percentage of pay. Additionally, we also hope to discover why employers may not consider offering paid parental leave in the future.

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