Let's Talk About Paid Leave Policies

Paid leave policy benefit both employees & employers

September 30, 2021

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As Melinda French Gates recently underscored in Time, the United States is the only industrialized country without a national paid leave policy. In fact, according to the Bureau of Labor Statistics 2020 National Compensation Survey, only 21 percent of U.S. workers have any paid family leave as part of their employment benefits

During the pandemic, the lack of national leave policies has had a significant impact on the workforce. Women, who are more likely to be in caregiving roles, are feeling the impact most acutely. Without access to paid leave, employees are forced to decide between their jobs and their families.

If you are hiring right now, you have a lot to think about when it comes to paid leave. What current paid leave policies do you have in place? How do they impact your culture and employee morale? Nine states have enacted or will be enacting paid family leave laws, but even if you aren’t operating in one of these states, you’ll still want to consider the impact of not offering paid leave. What are your competitors offering? And most importantly, what’s going to resonate with candidates and foster loyalty among current employees?

Below, we’ve outlined key considerations for putting together a paid leave policy.

What is paid family leave?

With paid family leave, employees can take time off to care for loved ones, including spouses, partners, children, and parents. In some states that have implemented paid family leave programs, it is extended to siblings, grandchildren, and grandparents. In contrast, paid medical leave means taking longer periods of time off for self-care to treat one’s own illnesses or medical issues.

Why paid leave programs are important to employees AND employers

Less than a quarter of private-sector workers have access to paid family leave. This number plummets to 8 percent for low-wage workers. However, life happens to everyone, regardless of income, gender, age, or ethnicity. As Melinda French Gates, points out, “At some point in our lives, almost everyone who works will need time away from their job to take care of themselves or someone they love.”

Under the federal Family and Medical Leave Act (FMLA), eligible employers are required to offer unpaid family leave. However, this leaves many employees with several difficult choices. Should they take time off without pay to care for their newborn, or their loved ones? Can they afford to pay for professional caregiving if they don’t take the leave? If they take time off, how will it impact their status at work, and will it mean fewer chances for advancement or raises? Keep in mind, smaller employers are exempt from FMLA, so many people may not even have the option to take time off, paid or unpaid.

Paid leave programs signal to employees that their company values them as people, not just as a means to drive sales and profit. For your company, making paid leave available can lead to increased retention, especially among women and minorities. On a larger scale, equitable paid leave policies (offering paternity as well as maternity leave) keep women in the workforce and actually improve gender equality overall because women alone aren’t relied on to be the sole caregivers. Because employees aren’t forced to decide between earning income and caring for loved ones, paid leave also lessens economic inequalities across the workforce.

TIP: If you’re re-opening your workplace, get our tips for how to do so safetly and successfully.

Although there isn’t currently a national paid leave policy in place, the Biden administration’s American Families Plan has allocated $225 million to provide leave assistance to workers. That may seem like a hefty price tag, but consider that Americans lose an estimated $22.5 billion in total wages each year due to the lack of paid family and medical policies. The administration’s bill has now been rolled into a more general infrastructure plan that has yet to get Congressional approval.

While the U.S. awaits a national paid leave policy, some companies have stepped up on their own in support of employees.

In July, Bumble announced it would be expanding its paid leave policies for caregivers, victims of violent crimes, and for the birth, adoption, or surrogacy of a child, among other new benefits. Netflix made waves in 2015 by announcing a full year of paid parental leave, and others like Microsoft and Deloitte have implemented plans for more generous maternity, paternity, and adoption leaves.

While larger companies are able to afford to pay for family leave, it can often be too costly for small businesses to implement. That means that it’s currently difficult for small businesses to offer attractive benefits in a hyper-competitive job market. A recent survey from the Bipartisan Family Center indicated that more than a third of unemployed adults would return to work sooner if employers offer paid family leave. In most cases, small businesses have the most to gain from a national paid leave program, both financially and in terms of employees returning to work.

Developing & Communicating a Paid Leave Policy

In the meantime, where do you start when creating a paid leave policy? Make sure to review the below, and collaborate with leadership throughout the process to ensure everyone is on the same page.

Understand the laws that impact your organization

SHRM has a simple state-by-state guide for paid leave laws, and you can also reach out to your State Labor Office for up-to-date information on labor laws that apply to your business.

Weight the costs and benefits

Until there is a national paid leave policy (or your business operates in a state that pays for family leave), your business will have to cover the costs of employees’ family or sick leave.

However, it’s important to understand the cost of not implementing a paid leave program. Resumelab.com found that 43% of new hires quit due to expectations not being met, which means time and money lost in recruiting and training. Evidence also supports that having paid family leave increases retention rates and job satisfaction. Review your budget and know what is feasible for your business before putting any policies in place.

Assess your employees’ needs

If you’re a start up or small business, offering a full year of paid parental or sick leave may be out of the realm of possibilities. However, there are other ways you can accommodate team members’ when they do come back to work, such as remote work or a flexible schedule. If possible, speak with team members and candidates you are interested in individually about their preferences.

Remember, it’s important to look at your employees’ needs equally; just because they aren’t parents doesn’t mean they won’t need to take time for themselves or their families in the future. If you begin offering paid leave, make it available to current employees as well as new hires.

Know what your competitors are offering

If you’re in talent acquisition or you’re a hiring manager, you’ll want to know what paid leave benefits your competitors have on the table. Especially now, candidates are doing their research and looking at the full benefits packages they’re offered. Their decision will likely be based on more than just salary; they want to know that “companies will invest in them long-term.” Don’t let your paid leave policies fall behind the curve because it will have an impact on the quality of candidates you recruit.


Again, treating employees and prospective employees as people with unique needs will go a long way in building a paid leave program that works for you and for your team members.

If you’d like to get involved in advocating for a national paid leave policy, check out the resources at PaidLeaveForAll.org and PaidLeave.us.


Check out our other blog posts for more talent acquisition tips and insights into recruiting trends.

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