If your small business has fewer than 50 employees you aren’t required to offer paid parental leave, or any leave at all. However, offering parental leave to new and growing families does wonders for employee morale, productivity, and loyalty. While six-plus weeks of paid leave may not be financially feasible for many small businesses, with careful planning, you can design a plan that accommodates parents and employers alike.
The Family Medical Leave Act (FMLA) states that businesses with 50 or more employees are required to offer 12 weeks of unpaid, job-protected leave to care for newborn or adopted children. FMLA exempts businesses with fewer than 50 employees. Yet, even unpaid leave costs small businesses money, considering contractor wages and the extra hours involved in spreading the work to other employees. However, experts say crafting a parental leave plan that helps new parents is worth the effort and expense.
“When employees return from leave, they have a higher engagement level, which means higher productivity,” says Carrie Ahmad, vice president of People for Turning the Corner LLC, a consulting firm for small businesses and job seekers based in Boulder, Colorado. “They also tend to stay with the organization longer because it stood by them.”
To design a plan that works for your business, consider one or some combination of the following benefits:
Telecommuting and flexible schedules
Employees appreciate flextime or the option to work from home, Ahmad says. “If the employee can work from home or work half days, he or she can continue to bond with their child and the employer can keep moving forward,” she says.
One Turning the Corner client offered eight weeks of partially paid leave followed by a period of telecommuting. The employee gradually eased back into full-time work over a 13-week period. Flextime and telecommuting provide a good compromise when the employer can’t afford to lose an employee for 12 weeks.
Short-term disability insurance can cover a portion of an employee’s income during maternity or paternity leave at little cost. Employers can either pay for the coverage themselves or offer plans to employees as an optional benefit.
Project Frog, an architectural design startup based in San Francisco, offers a generous paternity leave program that combines company- and state-paid wages (up to 55 percent of weekly wages). When platform design manager Justin Mikecz took leave to bond with his first child, he received 75 percent of his salary for six weeks.
Under California’s Paid Family Leave program, Mikecz had up to one year to use those six weeks. “I often worked four-day weeks to take at least some of the burden off my wife,” he says.
Paid time off
Some companies allow employees to use their accrued Paid Time Off (PTO) to cover a portion of unpaid leave. Other companies require that an employee exhaust PTO before using any disability benefits or unpaid time. This option comes at a lesser cost to the employer, but leaves the new mom or dad with virtually no paid time off if either parent or child gets sick.
Giving employees the opportunity to stay home with their baby is a wonderful benefit that’s becoming more in demand. With financial ingenuity, you can design a family leave plan that both the employer and employee can afford.
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