Many businesses are now limiting or eliminating paid parental leave after increasing it during the outbreak.
The percentage of companies offering paid maternity leave fell from 53% in 2020 to 35% in 2022, according to a survey on employee benefits conducted by the Society for Human Resource Management. And just 27% of employers—down from 44% in 2020—now offer paid paternity leave.
“A lot of these firms are now trying to get back to pre-pandemic norms,” Michelle Long, a policy analyst with the charitable Kaiser Family Foundation, stated.
Many businesses expanded their offers during the epidemic above and beyond what was necessary by state law, but as the economy has changed, Long said, “purse strings have tightened.”
According to data from the National Conference of State Legislatures, there is currently no federal paid leave program, and only 11 states and the District of Columbia provide the benefit, which is primarily paid for by payroll taxes.
“This is a very, very expensive offering, particularly for small and medium-sized companies,” According to Johnny Taylor Jr., president and chief executive officer of the Society for Human Resource Management, some businesses may pay wages for both the employee on leave and a substitute at the same time.
“The game is changing a little bit,” he added, adding businesses are scaling back on previously robust paid parental leave plans as the job market softens.
How to get ready in case your paid parental leave is lost
If you intend to expand your family, Taylor advised, it’s crucial to understand the specifics of your employer’s parental leave policy, whether you’re a current employee or reviewing job offers.
“Oftentimes, the temptation is to take a job with the highest salary without factoring in things like their paid leave offering,” said he. He advised asking for an overview of the entire benefits package when you are interviewing.
He advised prospective parents to examine the benefits and drawbacks before using up all of their paid vacation days for the year, even though taking vacation time for parental leave is another choice.
“Nurturing a new baby is not a vacation,” Taylor said. “If you spend all your vacation time doing that, you’re going to burn out.”
Future parents should also think about combining benefits or taking paid leave separately, Nicole Sullivan, a certified financial planner and co-founder of Prism Planning Partners in Libertyville, Illinois, recommended.
“Fully understanding and coordinating all company benefits is another major help — things like flexible spending or dependent care accounts and medical benefits,” she said.
“Many companies have benefits open enrollment in November, so it’s a good time for parents and parents-to-be to review,” Sullivan added.
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