Paternity Leave

October 18, 2018

 

Q. Should Small Business Owners offer paternity leave when male employees have a new addition to the family? 

 

A. There are certain situations where employers must offer paternity leave—it’s a government regulation. There are other situations where an employer should offer paternity leave—it’s beneficial to the business. First, we’ll explore “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 you head is spinning you are not alone.  If you think your company may need to comply with the FMLA, we strongly suggest seeking the advice of counsel or a qualified HR professional. It is entirely possible that you will be required to offer paternity leave.

 

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:

 

  • 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.

 

  • 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.

  

  • 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. Today, employees want to work for companies that share their values. This may include employer sponsored time to give back to the community, for example, time to work on a Habitat for Humanity project. It may include the employer donating money to selected humanitarian projects or providing opportunities for employees to do so. Leave for new or expectant parents may well be a part of this equation. Assess your situation. Make sure that your policies create the kind of culture that will be attractive to prospective employees. 

 

  • 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. Some believe it is a moral imperative—it is just wrong not to offer this benefit. We tend to be more pragmatic. First, you must obey the law. Do what you must do. If you are not required to offer paternity leave, figure out what you should do. 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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