No matter what you call it - paternity leave, maternity leave, family leave, baby bonding leave - parental leave programs are increasing in numbers and necessity. So the question is, do you offer it? Chances are, there may be a few compliance risks inadvertently hiding in plain sight.
As more companies recognize the importance and implement their own parental leave policies, there’s also more room for discriminatory practices (and legal risk lying in wait). Despite best intentions, companies can be fined for non-compliance under the Equal Employment Opportunity Commission (EEOC) and Title VII.
Estee Lauder paid $1,100,000 in fines to the EEOC because it treated new fathers differently than new mothers, a parental leave discrimination lawsuit cost JPMorgan $5 million, and most recently, Microsoft is paying over $14 million to resolve a leave discrimination case in California. Luckily, these high profile cases can provide guidance around what to do (and what to avoid).
Buttoning up parental leave policies (and getting ahead of any national paid leave on the horizon) is the best course of action for companies of any size. Whether you’re crafting a new policy or auditing your existing policy, here are five must haves that address red flags in your parental leave policy to avoid lawsuits and preventable financial losses.
DISCLAIMER: THE INFORMATION PROVIDED IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.
Does your company offer more paid (or unpaid) time off to moms than dads? Or perhaps your policy tops up paid leave for pregnancy but not a bonding leave? Because the United States lacks paid parental leave, most policies only offer time off for birthing parents, or moms. But this gender discrimination, excluding dads and non-traditional families, can be a very expensive mistake that’s easily remedied by having a policy with gender-neutral language.
The EEOC requires that policies must be equitable across “similarly situated” employees, which means that birth parents, non birth parents, and adoptive or foster parents must have access to the same leave to bond with a new child. Employees covered under a company parental leave policy must have the same benefits, duration, eligibility requirements, return to work experience, and paid leave.
Is your pregnancy disability and bonding wrapped up in one maternity leave policy? Do you offer a separate parental leave policy? Not only does not having a separate parental leave policy exclude non-birthing parents, but it also can infringe on employees’ leave entitlements, like the federal Family and Medical Leave Act (FMLA). Non birthing parents that are eligible for bonding leave but there is no parental leave policy leads to inconsistent access.
Non birthing parents (and fathers) benefit from taking parental leave, but are often unable if there is only a maternity leave policy. Having separate parental leave policies can help companies comply with the EEOC’s statement to provide equitable benefits to similarly situated employees. This also aligns with any short term disability benefits that would only apply to pregnancy disability leave.
Is the policy defined in such a way that the primary caregiver will always be the person that gave birth? Sometimes this is referred to as a “default” parent, and very commonly used in many company parental leave policies. While identifying a primary or secondary parent seems harmless, predefining these definitions can get you into trouble. For example, this may mean birthing parents are always the primary parent and non birthing parents are always the secondary parent.
Primary and secondary parent language can be used to give birthing parents more time to recover from a pregnancy, but this can discriminate against those who adopt or foster while also making gender assumptions about who will be the primary caregiver. Modern families often have more equal responsibilities with both parents working. If these terms are in your policy, make sure you don’t predefine who can be a primary and who can be a secondary parent. It should be up to the employee to determine, and companies should not approve based on assumed gender (especially if using “paternity” and “maternity” leave terminology).
Do you have an unlimited PTO policy? And if so, do you allow employees to utilize the policy in lieu of a parental leave? Only 44% of workers qualify for FMLA, so relying only on leave laws leaves many employees unable to take parental leave (even under a company policy). While it may seem easy and harmless for managers to approve time off under an unlimited PTO policy and not report a parental leave, it can pose a risk as most of these policies don’t apply to all employees.
While unlimited PTO is a common culprit for underreported parental leaves, more importantly, relying on unlimited PTO could translate into “class differences.”
For example, if only salaried employees get unlimited PTO and hourly employees accrue days, hourly employees may not be able to take the same amount of parental leave. Best practice is to include language that excludes parental leave as a reason to use unlimited PTO, and be specific with the number of weeks available - especially if part of that time is taken outside of leave entitlements.
And finally, does your policy run parental leave with available benefits like Paid Family Leave (PFL)? While only a handful of states have PFL programs, not requiring employees to file for benefits they may be eligible for during a parental leave can lead to companies paying more out of pocket than necessary, especially if they provide pay. This is up to each company, but some policies use the availability of PFL as an opportunity to be strategic with exclusion such as only offering paid leave to employees in states that do not have PFL. This also can help small businesses afford to provide paid parental leave.
However, parental leave policies should not exclude certain employees based on position or circumstance. All employees should be eligible for the same amount of parental leave by federal or state law, but any paid benefit can be reduced and restricted by the availability of other paid benefits. For example, if you’re only offering paid leave to employees in states without PFL, make sure you don’t only offer it to in-office employees.
Just because someone works from home doesn’t mean they can’t take parental leave.
A well crafted parental leave policy can help companies avoid risk and financial loss. Without a policy, one off exceptions or parental leave approvals leave companies exposed. Here are a few best practices to keep in mind to wrap up your policy:
Even if there aren't any applicable federal or state leave entitlements that apply to a parental leave, having a clear written policy can help provide consistency and equitable approvals for all employees. Parento is your EEOC compliant paid parental leave solution.
