Luke Lathan was planning to take three weeks off after his wife gave birth to their second child, but regretted that he couldn’t afford to take more time. Then his employer adopted a new policy that drastically changed his plans for the better.
Effective Jan. 1, agricultural biotechnology company BASF began offering eight weeks of paid parental leave to new parents – both moms and dads. For moms, the eight weeks is in addition to the six to eight weeks of paid maternity leave previously available.
Now Lathan, a diversified product manager at BASF’s Research Triangle Park campus, is looking forward to two months of supporting his wife, Melissa, bonding with their new daughter after she is born, and helping their young son, Dane, adjust to a new member of the family.
“For over two years our 2-year-old toddler has been the center of our attention,” said Lathan, 32, a former starting center on N.C. State University’s football team. “It’s going to be a rough transition for him.”
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BASF, which has about 1,000 employees in RTP, has joined an expanding list of companies in the Triangle and nationwide that have either launched or expanded paid parental leave.
“That’s a trend we are seeing at businesses large and small within our customer base,” said Skip Woody, area executive vice president at Durham employee benefits firm Hill, Chesson & Woody, a division of Gallagher Benefit Services.
Blue Cross and Blue Shield of North Carolina, based in Durham, expanded its parental leave policy to 12 weeks as of Jan 1. Duke Energy began offering paid parental leave for the first time at the outset of the year, with dads getting six weeks of paid time off. Birth mothers get 12 weeks paid time off, double what was previously available for maternity leave at the Charlotte-based utility.
In addition, last year Bank of America expanded its paid parental leave from 12 weeks to 16 weeks while Wells Fargo began offering paid parental leave for the first time – up to 16 weeks for a primary caregiver and up to four weeks for a non-primary caregiver.
Some policies also provide paid leave for employees who adopt or take in foster children.
These new and expanding policies are emerging against a backdrop of a growing economy and a low unemployment rate, which has tightened the job market considerably. Employers who adopt them say one reason they do so is to improve employee retention and make the business more attractive to new hires.
“There are a lot of major companies offering this type of benefit,” said Duke Energy spokesman Dave Scanzoni. “To stay competitive for employees around the country, and around the world really, we found it was important for Duke Energy to offer this benefit.”
The new generations that are entering the work force, they value their vacation time and their leave more so than previous generations. They are focused on the amount of time they can spend away from work.
Skip Woody, executive vice president, Hill, Chesson & Woody in Durham
Neither federal nor state law requires employers to offer paid parental leave, although the federal Family and Medical Leave Act calls for many employers to offer up to 12 weeks of unpaid leave.
A recruiting tool
Companies typically publicly announce new or expanded parental leave policies to gain maximum exposure.
“The feedback we received from social media was really positive,” said Paul Rea, senior vice president at BASF. “When we announced (the new policy) in December, we had about 46,000 people view it with close to 600 likes.”
He added: “We think this is an important step in showing that we really care about (employees’) personal situations, so when they are at work they can do great work.”
Another factor: millennials are entering their child-bearing years.
“The new generations that are entering the work force, they value their vacation time and their leave more so than previous generations,” said Woody. “They are focused on the amount of time they can spend away from work, pursing the things they are passionate about and being with their family.”
Fara Palumbo, chief human resources officer at Blue Cross, said that internal surveys and requests from employees factored into its new policy.
One of the employees pushing for an upgrade was Emily Swartzlander, 37, who gave birth to her second child in August 2015. She appreciated the eight weeks of paid maternity leave the insurer offered at the time – which was quite generous compared to the three weeks of paid leave available from her former employer when she had her first child – but went to her boss armed with statistics backing her contention that Blue Cross should expand its offering.
Among other things, she pointed to data from the National Partnership for Women & Families that showed that paid leave can improve worker retention and therefore save employers money in the long run by reducing turnover.
Rich Fuerstenberg, a senior consultant at Mercer, a human resources consulting firm in New York, backs her up. “There is good statistical data that shows the year in which a female employee is most likely to leave her current employer is the year after she gives birth,” he said.
Swartzlander said she and her husband don’t plan on having any more children – “We have always said we don’t want them to outnumber us” – but that didn’t deter her from advocating for an even better policy.
“I really wanted to make a difference for other mothers and fathers,” she said.
Not for all sectors
Despite the number of high-profile companies adapting and adopting parental leave policies, most employers don’t offer paid parental leave.
Among tech companies where the competition for the best employees is fierce, paid parental leave is so common that companies that don’t have it “stick out like a sore thumb,” said Mercer’s Fuerstenberg. Indeed, Netflix upped the ante for employers in 2015 when it announced that new parents could take up to a year off with pay.
At the same time, however, he pointed out that paid parental leave has yet to make major inroads in industry sectors such as hospitals and retail that are low-margin businesses that rely heavily on labor.
“If you don’t have enough people managing cash registers or nurses on the floor of the hospital, that can be really bad for business,” Fuerstenberg said.
Some companies distinguish between maternity and paternity leave, offering more paid time off for mothers, while others take a one-size-fits-all approach. Blue Cross and Blue Shield is among the latter, providing up to 12 weeks of paid leave for mothers and fathers alike.
“Essentially, we felt that it was really important for parents to bond with their child, regardless of which category of parent you are,” said Palumbo of Blue Cross.
Bank of America has found that expanding its paid parental leave didn’t have a significant financial impact, said Jim Huffman, U.S. benefits executive. That’s because, although the bank does bring on temporary workers when necessary, every effort is made to work out ways that other team members can cover for a new parent on leave.
Meredith Archie, a senior communications consultant with Duke Energy in Raleigh, learned of Duke’s new parental leave policy just a few days after giving birth to a baby girl in mid-December. Since the policy kicked in as of Jan. 1, she’s now able to take 12 weeks of paid time off without having to exhaust her vacation time and sick leave for the year – which is what she had been planning to do.
“I’m happy that I can be home at this moment and really focus on my daughter and getting to know her and (having) this time to bond with her,” said Archie, 31.