Developing a Parental Leave Policy When You're a Small Business

Tips for developing a parental leave policy that works for your employees and your business.
Colleen Egan, Writer

*Nothing in this article constitutes legal advice. Please consult an attorney if you have questions about parental leave policies and legislation. *

Gone are the days when there was no such thing as parental leave — just maternity leave, which was offered solely to women who had just given birth and only allowed about six weeks off. Today, parental leave has become a broader benefit, encompassing not just mothers but also fathers, same-sex partners, other caregivers, and parents who have recently adopted or even started fostering children.

The topic of parental leave is also increasingly in the headlines as employees, companies, and politicians redefine the concept of a satisfactory, meaningful family leave. Of course, it’s one thing for a major corporation to make sweeping changes to its parental leave policy, and it’s quite another for a small business, which, no matter how much it values a growing family’s bonding time, struggles to keep up when its team is short staffed.

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Here are some tips for developing a policy that works for your employees and your business.

Comply with federal and state regulations.

A parental leave policy doesn’t just consist of what you’d like to offer your staff — you also need to adhere to laws. For example, if your business has 50 or more employees, you need to comply with the federal Family and Medical Leave Act (FMLA), which requires that you provide up to 12 weeks of unpaid maternity leave. There are no federal requirements for paid parental leave. If you employ fewer than 50 people, this law doesn’t apply to you, but if you have 15 or more employees, you must comply with the Pregnancy Discrimination Act, which prohibits employers from treating their workers differently if they’re pregnant. In addition to these federal regulations, check your state’s laws regarding parental leave, as some, like California and New York, offer publicly funded leave, which businesses contribute to via payroll taxes.

Consider the competition.

When creating a parental leave policy, check out what similar businesses of comparable size are doing, because that’s who you’re competing with when it comes to attracting and retaining top talent. For example, do others offer full or partial pay during leave? Are secondary caregivers offered the same amount of leave as primary caregivers? Do they offer support to parents who are transitioning back into a full-time schedule? By surveying the competition, not only can you get ideas for matching their offerings but also exceeding them and developing industry-leading programs that set you apart in the eyes of employees and job candidates.

Run the numbers.

What will your parental leave policy really cost you? If you want to offer paid leave, consider the salary and benefits that you will be paying for while your employees are out, plus the cost of temporary workers — if needed — to cover for them while they’re out. But you should also consider the value of your employees. How much time, effort, and money would it take to hire and train someone new to do their job? Would you be forsaking years of meaningful contributions from certain employees because you didn’t want to cover a few months of parental leave?

Set yourself apart.

As noted above, surveying the competitive landscape is important for both meeting and surpassing similar companies. Instead of thinking about parental leave as a set of weeks or months when an employee is out of the office, think about it holistically. For example, consider developing a program to help them transition out of their duties before their children arrive, and then reenter the workplace once their leave is over. Your employees’ lives are only going to grow more complicated once they welcome children into their family, so consider options like working from home, flexible hours or new schedules, and other ways to support them. Talk to your staff members, especially those who have children, about meaningful ways that you could update your policy to help them be better parents and, in turn, more engaged employees.

Colleen writes for Square, where she covers everything from how aspiring entrepreneurs can turn their passion into a career to the best marketing strategies for small businesses who are ready to take their enterprise to the next level.