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Should a Small Business Offer Paid Parental Leave

Despite passing the Family and Medical Leave Act (FMLA) in 1993, which allows employees to take 12 weeks of unpaid leave from their work before returning to their position, the U.S. is the only developed nation not to guarantee their working mothers salary during the time they take off from work after a childbirth. Not to mention the fact that exemptions apply to some small businesses, entrepreneurs are faced with the decision of whether to honor their employees with the time and money they require to take care of their child during the first months and years of their life. While it may not make sense for all small businesses to offer paid time off to their employees, particularly during the early stages of a company, there are a few things to consider when dealing with a mom and her newborn.

Payment Guarantee or Case-by-Case Basis

The main question you will have to answer with regards to parental leave is whether you want to set up a universal policy that guarantees payment to all new mothers or if you prefer to offer compensation on a case by case basis. This will depend on several factors, including your status as a company, the size of your company, your relationship with your employees, and the mission of your company. When dealing on a case-by-case basis, you may only offer compensation to your most valuable employees. A good baseline to work off of could be: if you would pay for this employee to continue their education, you should be willing to pay for them to take parental leave.

Post-Leave Treatment

Another issue arises when you have to consider a policy for bringing a new parent back into the office. Many employers start new mothers back part-time, which has proven to be a more successful means of promoting employee satisfaction. But of course, not all small businesses can afford for an employee to take even more time off work when they’ve already missed 3 months of the year while the business is in the middle of on an important project. Whatever the case, there needs to be a plan in place that enables a smooth transition, which could mean having another employee continue to offset the work load from a newly returned employee.

How to Avoid the Issue Altogether

While there’s no surefire way around the issue of offering paid parental leave, you could consider mentioning to your employees upfront that they will not be offered paid time off during certain times of the year if your business is heavily seasonal. Implementing a hard policy that applies to all employees will be the best way to keep everyone happy and avoid confrontations when the issue comes up.

Published: March 14, 2014
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Angela Cordle

Angela Cordle is the EVP of Tarkenton Financial, a leading insurance marketing firm based in Atlanta, Georgia. In this role, she serves as the Human Resources Director, overseeing the provision of HR services, policies, and programs for the company. She also serves as a BizCoachingOnDemand.com consultant, bringing practical and experiential knowledge of HR best practices to small businesses.