Paid Parental Leave: What Leave Managers Need to Know

When an employee’s family grows, they face numerous challenges. They need to prepare their home, stock up on essentials, arrange medical appointments, and most importantly, figure out how to take time away from work to be with their new family member.

For some employees, this process is straightforward—simply notifying their manager or HR team can set things in motion. For others, however, navigating leave can be a much more complex and stressful experience.

The ease of this transition largely depends on the policies their employer has in place. If the organization provides paid parental leave, employees can focus on their family without financial strain. But without such a policy, they may find themselves struggling to balance the demands of new parenthood and work obligations on their own.

Paid parental leave is the key policy that makes this transition smoother. This blog post delves into the specifics of paid parental leave, explores current trends shaping its adoption, and provides actionable tips for employers looking to create a new paid parental leave policy. We also invite you to read our quick guide for implementing a new parental leave policy.

What is a paid parental leave policy?

A paid parental leave policy provides employees paid leave when they add a child to their family. The idea behind paid parental leave policies is straightforward: employees with a new child get paid time off. But policies take their unique shape from the companies creating them.

It’s important to note that parental leave goes beyond maternity leave. A paid parental leave policy sometimes encompasses maternity leave, carving out leave options for mothers in addition to other caregivers. Other times, a paid parental leave policy leaves the idea of maternity leave behind, providing the same amount of leave to all parents.

One company, for example, may provide 12 weeks of time off at 100% pay to all new parents. Another may provide eight weeks of fully paid leave to birthing parents and four weeks of partially paid leave to non-birthing parents.

Paid parental leave policies of all shapes and sizes are on the rise throughout the U.S. In fact, parental leave was the top benefit among leave options being added by employers in 2024, according to AbsenceSoft’s 2024 Leave and Workplace Accommodations Forecast Report.

Why offer a paid parental leave policy?

Paid parental leave policies are becoming a popular benefit for a number of reasons. An increasing number of employees and job seekers view paid parental leave as an essential element of their compensation.

There’s a reason why these policies make such powerful recruiting and retention tools. Often, workers can access no other paid leave beyond what their employers offer. The federal Family and Medical Leave Act (FMLA) provides job-protected leave for covered individuals with a new child, but the leave is unpaid.

The conspicuous lack of a federal paid leave policy for new parents has far-reaching consequences. For employees whose employers lack a paid leave policy, many will take FMLA leave upon welcoming a new child. But they’ll opt to take fewer than 12 weeks or utilize their PTO to ensure they are getting at least partially paid for their leave.

In practice, this means that many fathers, especially, refrain from taking leave, in order to preserve cash flow. Although fathers are eligible for up to 12 weeks of FMLA for the birth or placement of a child, 70% of fathers take ten days or fewer for paternal leave, according to the U.S. Department of Labor. It’s an understandable choice — most families cannot afford to go without a paycheck.

That’s why, when an employer provides paid parental leave, it’s a significant boon for parents. Unless their state has a paid leave law pertaining to parents, they may not be able to take time off work, or take enough time. Having access to paid leave ensures that parents get time to recover from birth and adjust to life with a new child.

Ensuring that employees get time with their newborn is vital not only to the parents’ health but the child’s health as well. The World Health Organization recommends a minimum of 18 weeks of paid leave maternity leave. Although we have yet to see those recommendations implemented federally, many employers are adopting policies that allow new parents to take the paid leave they need.

Which states mandate paid parental leave?

As companies catch on to the importance of paid parental leave, some states are following suit. As of November 2024, there are 13 states with paid family leave programs on the books. These states include:

Although each state has its own policy and set of qualifications, most provide paid parental and family caregiving, as well as temporary disability. To see which states offer paid parental leave and other leave laws, check out AbsenceSoft’s Leave Law Lookup.

You’re familiar with the basics of paid parental leave policies — you know what they are and a little about how they might work. The reality is, however, that paid parental leave policies are very diverse. Consider how a few employers have built their own policies.

Credit rating agency Moody’s offers 16 weeks of paid parental leave to all its employees following the birth, adoption or surrogacy of a child, according to media reports. Molson Coors provides 16 weeks of paid maternity leave and four weeks of paid paternity leave. At Uber, employees get a minimum of 18 weeks’ fully paid parental leave — in one or two blocks over a rolling 12 month period.

While policy particulars vary company by company, trends in parent-focused offerings emerge among industries. According to a recent report from the Best Place for Working Parents, employers in the business and information and in the finance and insurance industries are leaders in implementing parental leave policies.

Tips for creating a paid parental leave policy at your organization

While paid parental leave policies vary widely from organization to organization, they should all include a few standard elements.

Paid parental leave policies should clearly define eligibility. Policies should explain the events that allow someone to take parental leave. Virtually all parental leave policies include parents with newborn babies. Some policies make room for employees who have adopted a child — including older children — or who have received a new foster placement.
Policies must define how much time off parents receive. They should also state how long new parents have to use this leave; many policies require parents to use their leave within the first year of a child’s life.
Policies should state how parents can use their leave. Do employees have to take their leave all at once? Or can they use it in chunks? If the latter is true, the policy should specify the minimum amount of time an employee can use. (Can an employee take parental leave day by day or week by week?)
Policies must be clear about how much pay employees receive while out on leave. The policy should inform employees that they’re getting 100%, 80%, or 50% of their pay.

As the policy takes shape, employers should be sure to use inclusive language. This approach will make sure companies don’t run afoul of federal anti-discrimination laws. It will also go a long way in establishing support for employees entering parenthood, regardless of their sexual orientation or gender identity.

Employers should consider, for example, using non-gendered language throughout the policy. While maternity and paternity leave are still common terms, employers can use more inclusive language in creating similar policies. Employers may create a parental leave policy that features different leave options for birthing and non-birthing parents, for example. Or they may use the terms primary parent and secondary parent to a similar effect.

As employers draft new paid parental leave policies, they should strongly consider working with both consultants and counsel to write a policy that reflects their company values and provides employees the benefits they need.

Manage your paid parental leave policy with AbsenceSoft

Once you’ve written your paid parental leave policy, it’s time to implement it. While these policies provide immeasurable benefits to employees, they can be tricky to administer, as they add yet another layer of complexity to leave management.

What’s worse, if you’re used to outsourcing your leave management, third-parties won’t administer your company policy for you.

With a platform like AbsenceSoft, however, you can add your own unique company policies into our system, alongside state and federal leave laws. That way, you can manage everything in one place.

To learn more about how AbsenceSoft can streamline your approach to leave management, schedule a demo today.