- States with paid maternity leave policies have had a 20% reduction in female employees leaving their jobs after the birth of a child.
- Some states require paid maternity leave, while federal law requires 12 weeks of unpaid leave for employers with 50 or more employees.
- When creating your maternity leave policy, be specific on who is eligible, determine if you will offer paid leave, and ensure you are compliant with state and federal laws.
- This article is for small business owners who want to learn what maternity leave is and how to create a maternity leave policy.
If you don’t offer your employees some form of maternity leave, it could cost you in the long run. While many businesses may consider maternity leave to be an added expense, research from the Institute for Women’s Policy Research shows that states with paid maternity leave policies saw a 20% reduction in the number of female employees leaving their jobs within a year of giving birth. In the end, the added expense of paid maternity leave can benefit your company by boosting retention, productivity and company loyalty.
To avoid losing quality employees, you need to have a clear understanding of what maternity leave is, what your responsibilities as an employer are, and how you can develop a maternity leave policy.
What is maternity leave?
Maternity leave is the period of time during which a new mother leaves her job following the birth of a child. Maternity leave may also begin before the child is born upon the mother’s request.
Maternity leave can also be referred to as “parental leave,” as parents of all genders may require time off to care for a newborn or recently adopted child. Depending on state laws and your business’s own policy, maternity leave can be paid or unpaid. [Read related article: The Right Way to Hire and Work With Family]
Key takeaway: Maternity or parental leave is the period of time during which a new parent leaves their job following the birth or adoption of a child.
Is it mandatory to provide maternity leave?
Whether it is mandatory to offer parental leave to your employees depends on the size of your company and the state you operate in. Under the Family and Medical Leave Act (FMLA), all employees of companies with at least 50 employees are eligible for 12 weeks of unpaid leave each year for things like serious illness, the birth of a child, or caring for a family member.
State policies differ on eligibility, length of leave, and whether the leave is paid or unpaid. Many states allow pregnancy and childbirth as qualifiers for short-term disability benefits. This chart from Paycor breaks down maternity leave laws by state.
“Providing maternity leave increases employee morale, productivity and employee retention,” said Elissa Jessup, HR knowledge advisor at the Society for Human Resource Management. “Reducing the high cost of turnover and the associated training costs for new hires are another benefit of an employer providing maternity leave. It can also be used as a recruitment tool to attract and retain quality employees, which can differentiate an employer apart from other competitors who do not provide maternity leave.”
Key takeaway: Maternity leave laws vary by state, but the federal FMLA laws require companies with more than 50 employees to provide 12 weeks of unpaid leave.
What laws apply to maternity leave?
Both federal and state laws apply to maternity leave. Here are three laws that you need to know about.
Pregnancy Discrimination Act of 1978
The Pregnancy Discrimination Act of 1978 is a federal law that protects pregnant employees from discrimination based on pregnancy, childbirth or related medical conditions. Under this act:
- Employers cannot refuse to hire a candidate based on pregnancy or pregnancy-related conditions.
- Employers cannot require pregnant employees to undergo procedures to determine their ability to perform certain job duties, unless the same procedures apply to all employees.
- If a pregnant employee does have trouble performing their job duties, the employer must offer reasonable accommodations, as they would for any other temporarily disabled employee.
- Employers may not prohibit pregnant employees from working or prevent them from returning to work after giving birth.
- Employee health insurance plans must treat pregnancy-related conditions the same as other conditions.
- Employers cannot require pregnant employees to pay higher insurance deductibles than non-pregnant employees.
Family and Medical Leave Act
The FMLA provides all new parents – including fathers and adoptive parents – with 12 weeks of unpaid leave. FMLA is different from a business’s maternity leave policy, which is typically six to eight weeks and can be paid or unpaid. However, the six to eight weeks of maternity leave is part of the 12 weeks from the FMLA – in other words, an employee cannot take six weeks of maternity leave and then start their 12 weeks of FMLA.
The FMLA applies to employees of any a company that has 50 or more employees who have been employed there for at least a year. Under the FMLA, businesses are required to:
- Provide 12 weeks of unpaid leave to care for a newborn or adopted child.
- Continue the employee’s health insurance coverage.
- Allow the employee to return to their same job, or a job with equivalent salary and benefits.
Four states currently offer paid family and medical leave: New York, New Jersey, Rhode Island and California. These states offer about 60% coverage of an employee’s salary during their time off.
Currently, six states as well as Washington, D.C., have Paid Family and Medical Leave (PFML) programs:
- New Jersey
- New York
- Rhode Island
Much like the FMLA, these states require employers to give employees time off for parental and medical leave, but unlike the FMLA, they require this leave to be paid time off. PFML programs have eligibility requirements, like working a certain number of hours, and each state has its own contribution rates and distribution amounts. Employers in states with PFML programs must contribute or withhold money from their employees’ wages to allow for paid maternity leave. [Make sure you are up to date on all of the sick leave laws your business should know.]
Key takeaway: Two main federal laws apply to maternity leave – the Pregnancy Discrimination Act of 1978 and the FMLA. There are also various state laws.
How to develop a maternity leave policy
Besides helping your company avoid discrimination lawsuits, a good maternity leave policy is key for attracting and retaining strong talent. Here are six things to do when creating your maternity or parental leave policy.
1. Follow state and federal laws.
When you construct your policy, the most important thing is to ensure you are complying with both state and federal laws. Federally, the most important laws to consider are the Pregnancy Discrimination Act and the FMLA. State laws depend on where your business is located, but if you operate in one of the states that have PFML programs, you are required to provide paid parental leave.
2. Make your policy applicable to all parents.
It is no longer just mothers who might require leave to care for a child; fathers, adoptive parents and other caregivers also benefit from leave policies.
“Employers should have a policy not just for moms, but for all new parents, including dads, non-birth moms, and parents through adoption and foster care,” said Missy Narula, founder of Exhale Parent.
By making your policy inclusive, you help all of your employees who might have a child come into their lives feel supported and protected.
3. Invite feedback from multiple sources.
When you’re creating your policy, it’s a good idea to gather input and feedback from a variety of sources, including your HR team, legal representatives, and employees who are expecting or have children. Ask your staff what aspects of a parental leave policy would benefit and help them most, what areas they need support in, and what you can do to make the policy the best it can be.
4. Determine who is eligible.
Your policy must be clear and specific on who is eligible for parental leave. You can use the FMLA as a guide – under the FMLA, employees must have worked for their organization for at least 12 months or 1,250 hours to qualify for 12 weeks of leave. You can adjust the eligibility requirements as you see fit, and you can also incorporate state guidelines.
5. Clarify the different types of leave you offer.
There are three forms of parental leave you can offer:
- Intermittent. This covers one-time things like doctor appointments and small emergencies.
- Reduced schedule. You can reduce an employee’s schedule or workload if their normal workload becomes too much.
- Block of time. This is an extended period of time off that is typically granted after the employee has given birth, or if there are health complications preceding the birth that require the employee to take time off.
6. Determine if you will offer paid leave.
The FMLA does not require employers to offer paid leave, but doing so can help you retain valuable employees. Paid leave is a major benefit that many job seekers value highly. There are a few ways you can offer paid leave:
- Employer-paid leave. This option, where you pay the employee’s entire salary while they’re out on leave, is costly, but it’s very valuable to the employee. To save money, you could consider offering a portion of the employee’s pay while they are away from work.
- Disability leave. You can include disability leave as part of your insurance plan, so their paid leave doesn’t come directly out of your pocket.
- Vacation/sick leave. Some employers allow employees to use their PTO for parental leave, though this can also be a costly option for you.
Key takeaway: When creating a maternity policy, talk to multiple sources, be clear on who is eligible, and make your policy inclusive of all parents.