Breeze Logo

U.S. paid parental leave vs. the world: Why are we so far behind?

Reviewed by
Read time
6 mins

America made a lot of forward strides during the pandemic. We developed vaccines that have saved many millions of lives, learned that we could rely more on technology like video-conferencing and telehealth to stay connected with customers and healthcare providers, and we saw that the productivity of U.S. workers improved in a work-from-anywhere environment.

One area that American businesses have not progressed post-pandemic is paid parental leave. Though the number of organizations offering paid maternity leave increased during the pandemic, that boon was short-lived.

Sadly, according to a study by the Society of Human Resource Management (SHRM), the number of organizations offering paid maternity leave dropped to 35% in 2022, down from 53% in 2020. This is despite the fact that, according to SHRM, paid parental leave is a close second to healthcare for benefits desired by employees in 2022 (82% to 80%).

Why does the U.S. lag in paid parental leave?

There are several reasons why so many employees in the U.S. are left without paid parental leave benefits.

First, even though the majority of males in the workplace indicate that paid paternity leave is very important for them when deciding whether to accept an offer of employment, the vast majority of companies still choose not to recognize that. In our society today, the term “we’re pregnant” is a good indicator of how pregnancy and child-rearing are viewed as a partnership by millennials and their younger counterparts.

And, though this is a matter of opinion, many researchers and female workers point to the workplace still being male-dominated, pushing a benefit seen as being primarily for new mothers further down the list of benefits companies are willing to pay for.

Another factor in paid parental leave not being offered by the majority of U.S. companies is there not being legislation in place mandating that this benefit be offered. It took years for maternity coverage to become a mandatory health insurance benefit, but there is no national policy concerning paid parental leave, and only a handful of states have moved forward with any legislation requiring companies to offer this benefit.

[ Report: Unpaid maternity leave would empty savings for 3-in-4 women ]

Why aren’t more companies offering paid parental leave?

Though human resource executives and staff in America are aware of the statistics showing the disparity between how many employees want paid leave vs. how many companies offer it, this doesn’t necessarily mean employers don’t want to provide this benefit.

A couple of roadblocks are preventing businesses from offering paid parental leave.

One roadblock, particularly for small businesses, is cost. Though many small companies view their employees as “family,” they don’t have the cash flow needed to add a paid leave benefit.

Many small businesses find it difficult enough to offer affordable health insurance coverage to their employees, and when they do enroll in a program, they often find themselves shopping for a new one a year later because of painful rate increases.

Companies also face pressure to offer other traditional benefits, such as short-term and long-term disability insurance, group life insurance, and dental insurance. Retirement plans are also a must-have, according to employees and employers.

Besides cost, even large employers with multi-employee HR teams find parental leave programs difficult to manage. Because there are no mandates in place that standardize paid leave programs, each company must develop its own paid leave plan and devise a system to manage it. Faced with the complexity and cost of creating a paid leave plan leads many employers to “back burner” it as they struggle with managing and maintaining existing benefit programs.

[ Related: Top 10 employee benefits for working parents ]

Benefits of offering paid parental leave for employers

Employers have much to gain by offering paid parental leave. Let’s look at two of the best reasons employers should be rolling out paid parental leave programs.

To acquire & retain top talent in a competitive hiring landscape

The Great Resignation, retirements during the pandemic, and normal competition between companies have led to a near free-for-all when it comes to hiring top-tier talent. Employees are in the catbird seat and often entertain multiple offers before settling on a new company.

During their evaluation of potential employers, paid parental leave is of significant importance to recruits. One survey by Deloitte found that 77% of employees said that whether a firm offered paid leave, and the length of it, had some bearing on where they chose to work.

Retaining good employees is also positively impacted by offering a paid parental leave program. Employers who respond to their employee’s requests for this benefit prove that what is important to their workers matters, and that the company is willing to invest in their people.

To champion & support working parents

All employees deserve kudos for all they do, but maybe none as much as working parents. If you’ve ever been a working parent or know someone who has, you know that the demands of being a new parent often require superhuman strength to handle learning to juggle a career and a growing family.

Companies that acknowledge this are not only earning greater loyalty from their employees with growing families but also keeping them in the fold when they are ready to return to work instead of looking for a new employer that has paid parental leave benefits.

[ Related: How much does it cost to have a baby? ]

The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.

— Published October 25, 2022
Related Articles

Set up an inclusive paid parental leave plan with Breeze!

(Seriously, it's a breeze.)