2024 Pay or Play Affordability Percentage

The Need for Paid Family Leave

While the Biden administration proposed 12 weeks of paid family leave, the plan was altogether abandoned after facing Congress. The United States of America is only one of seven nations that doesn’t provide paid maternity leave. The only federal statute regarding parental leave is the Family Medical Leave Act (FMLA) which allows 12 weeks of unpaid leave for new parents. Employees are eligible for this leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.

Effects of Maternity Leave on the Workforce

Research from companies and countries that provide paid leave show that women who receive paid leave were more likely to return to their job post-birth. A recent Women in the Workplace report stated more than one out of four women in the U.S. are considering taking a step back from their career or leaving the workforce altogether in wake of the pandemic and lack of paid leave and support. To compare, countries with paid leave see an economic boost when parents, especially women, rejoin the workforce. Conversely, corporate America is looking at record numbers of women leaving the workforce.

Benefits of Introducing Paid Paternity Leave

About 90 out of 187 countries offer statutory paternity leave. The number of men taking advantage is on the rise. COVID-19 sparked the urgency for companies to figure out how to better support employee well-being and paternity leave became a hit. McKinsey-McGill University interviewed 130 new fathers and their partners, over 10 countries about extended paternity leave and the following key points were identified: 

Improved Interpersonal Relationships

All the participants agree they were happy they took the leave and would do so again in the future. 90% saw an improvement in their relationship with their partner. This result was unsurprising as recent research shows a positive correlation between paternity leave and greater relationship stability. Studies also see a decrease in maternal postpartum-depression outcomes by having the partner present and participating in childcare.

Reduced Gender Wage Gap

Taking paternity leave also reduced the gender wage gap in individual households. It increased a mother’s wages short-term and helped to increase financial well-being in the household long-term. 9,000 families in a study were observed for a year before childbirth and again later when the children were about 4 years old. Researchers found that mothers’ incomes rose about 7% every month that a father spent at home on paternity leave.

Reinvigorated Work Ethic

20% of the new fathers interviewed mentioned feeling concerned about paid leave presenting them with a career setback but felt that, in the end, the benefits outweighed the risk. The men that took the paid paternity leave felt appreciation towards their employers. Once returning the work, fathers felt energized, more motivated, and considered staying with their companies longer. Overall, the experiences reported from extended paternity leave were positive.

In the United States, studies indicated only about 25% of fathers take more than a week off after a child is born. The majority of American fathers only take a single day off.

When looking at the research from companies and countries that provide paid family leave, the benefits seem to outweigh the costs.