Providing fathers with the opportunity to take an extended period off for the arrival of a child, by birth or adoption, positively affects familial outcomes. The benefits of paternity leave include the promotion of parent-child bonding; improved health and development outcomes for children; and greater gender equity at home and the workplace, according to the Department of Labor’s policy brief on paternity leave.
These social benefits are highly touted, but how does offering paid paternity leave benefit employers? First, let’s discuss what a California business’s obligations are under the California Paid Family Leave program.
The California Paid Family Leave (CFL) program
The California Paid Family Leave program allows employees, both women, and men, to take up to 6 weeks paid leave within a 12-month period to bond with their newborn, adopted, or fostered child or care for an ill family member.
Employers are not responsible for the added expense of PFL benefits as employees contribute to the State Disability Insurance fund, the department that manages PFL, through tax withholdings from their paycheck.
According to the Small Business Majority, a national small business advocacy organization, California’s PFL program applies to all companies, regardless of their size, but isn’t highly restrictive. The PFL program does not:
- Explicitly protect an employee’s job upon their return.
- Require employers to continue health benefits while employees are on leave.
- Require employees to pay workers while on leave.
Despite seemingly lax regulations, gaps in the PFL program are covered by other policies enacted by the federal Family and Medical Leave Act (FMLA), the California Family Rights Act (CFRA), and California’s Pregnancy Disability Leave (PDL) regulations. Combined with these policies, an employer is obligated to:
- Reinstate an employee to their former position, or position with equivalent pay and benefits, upon their return from leave.
- Continue health benefits while employees are on leave.
- Not discriminate against employees who decide to take leave or file a complaint about an employer’s failure to adhere to federal and state leave policies.
Note that companies are still not obligated to pay for an employee’s leave under any of the above policies. Paid leave is completely optional in the US.
Moving beyond obligatory family leave policies: attracting and retaining talent with paid paternity leave
Want to attract and retain talent? Offer paid paternity leave.
Considering about 90 percent of fathers take time off for the birth or adoption of a child, paternity leave appears to be a potential perk for drawing and retaining talent. According to a 2014 study of highly educated professional fathers, 9 out of 10 considered paid paternity leave as an important perk when considering potential jobs, while 6 out of 10 considered it extremely important. Apparently, these numbers are even higher among millennials.
In light of these facts, offering paid paternity leave may improve companies’ employee turnover rates, especially for highly skilled positions, such as executives, engineers, and other white-collar professionals. When an employee quits, companies are hit with the cost of advertising the job opening, interviewing dozens of applicants, and training and onboarding new talent.
Some studies suggest losing a skilled worker can cost a company 6 to 9 months of the employee’s salary, while others indicate costs of as much as two times the salary. For example, according to glassdoor.com, the national average executive salary is over $121,000. That means a company could shell out between $20,000 and $242,000 just to replace them!
A host of big names are already offering generous parental leave benefits for both mothers and fathers, including Facebook, which allows employees to take as much as 4 months off for the birth of a child.
If you need to bring your company policies in compliance with current federal or state regulations regarding paid employee leave, contact RTR Consulting today! We can create or update your human resources strategy at a cost-savings compared to an in-house department. We combine our expertise in complex employment law with your company’s vision to develop a human resources approach that will allow your business to flourish.