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Should Small Businesses Offer Paternity Leave

Q. Should small-business owners offer five days of additional vacation for paternity leave when male employees have a new addition to the family?

A. First, let’s discuss “must,” and then we’ll consider “should.” If an employer has 50 or more employees, the business may be subject to the Family and Medical Leave Act (FMLA). FMLA requires that parents of a newborn or those adopting or fostering a child receive up to 12 weeks of unpaid time-off to care for and bond with the child if the parent has been with the company for at least one year and has worked at least 1,250 hours in the preceding 12 months. If your head is spinning, you are not alone. If you think your company should comply with the FMLA, we strongly suggest seeking the advice of counsel or a qualified HR person. Now onto the “should.” The reason to offer any benefit, not mandated by the government, is to attract and retain the best people. Obviously, it is a judgment call, but we suggest considering the following questions:

  1. What can you afford? Paternity leave, whether it is paid or unpaid, comes with a cost. Make sure that you understand the cost. In doing your calculation, remember that there may be some degree of adverse selection. That is those who expect to use the benefit will be attracted to your company. Those who don’t expect to use it are more likely to be indifferent. Therefore, you may end up with more than your fair share of expectant fathers. Make sure that you understand the cost and that you can afford the expense.

  2. What do your employees value? Now that you understand the costs, consider the benefit side of the equation. Surveying employees is a useful way to get a sense of the things they value most. You only have so many dollars to spend on benefits, make sure you are offering those benefits most appreciated by your employees.

  3. Does your company’s culture and environment help you attract and retain the talent you need? One of the benefits, which will be difficult to quantify, but which should not be ignored is the impact on your company’s culture. We asked Rush Paul, an experienced HR consultant, to comment. Rush advises that, “Employees are attracted to join and stay with companies whose values are consistent with their own and where the employee believes he or she can be successful. If the values you seek to reflect in your employment brand include an effective work/life balance, don’t forget the men in your company. If being identified as a diverse and inclusive organization is important, create policies that are as gender neutral as possible. In either case, including a paternity leave policy is part of the equation. As you create your paternity policy, be sure to plan for how you intend to address adoption, same-sex partners, leave before birth or adoption (not just after), and additional unpaid versus paid leave.”

  4. What do competitors offer? If other organizations, with which you compete for employees, offer this benefit, it may be something that employees expect. If you don’t offer it, you will be at a competitive disadvantage when it comes to attracting and retaining employees.

Unfortunately, there is no definitive answer to this question. It’s a judgment call that, depending on your circumstances, could go either way. But, the four questions above will help to refine your thinking.

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