Design Element 3
WHAT DURATION OF LEAVE WILL BE OFFERED, AND AT WHAT PAY?
Decisions to Be Made
Consider the duration of leave and the rate of pay replacement you will offer.
- How many days / weeks of leave will you offer?
- Will you offer different lengths of leave based on caregiver status?
- What rate of pay will you provide over the duration of leave?
How to Approach These Decisions
Examine historical patterns of leave at your company as a starting point
- How long have employees typically taken in unpaid leave upon the birth of a child or for a medical issue?
- Note: this is likely less than the time employees would ideally take, since the absence of pay often limits the leave employees can afford to take. Also, note employees often use all of their vacation days and PTO when they require family or medical leave
Consider expert recommendations such as:
- The International Labour Organization:
- Maternity leave - minimum 14-18 weeks
- Paternity leave - no specific recommendation
- The American Academy of Pediatrics:
- Maternity leave - minimum 6-8 weeks
- Paternity leave - minimum 6-8 weeks
Consider what other companies offer
- For sector-level benchmarks of parental leave length, refer back to "How Does Your Sector Compare?"
- Compile a list of main competitor policies, where publicly available
- Consider both industry competitors and competitors for talent, if these groups are separate
- Determine how you aspire to compare: At the market median? Matching the front-runner(s)? Becoming the frontrunner?
For birth mothers, determine how paid parental leave and short-term disability will work together
- Review short-term disability program details to understand your legal obligations and options
- If employees are eligible for disability benefits, the programs will either need to run concurrently or in succession
- In some cases, disability insurance can cover part of wage replacement with employers covering the remainder
Determine what pay rate your company can offer
- Most companies offer 100%, but others offer a portion of pay
- Employees, especially fathers, may be less likely to use PFML if the pay rate is lower than 100%
- 86% of fathers reported they would not use parental leave unless it paid 70% of their salary
- 45% said they would only take leave at 100% of normal pay
- Because leave duration and pay are interrelated determine what combination best balances the needs of your employees with your business economics
- See "Estimate the Potential Costs" for a labor cost estimation calculator
REAL COMPANY EXAMPLES
Company A: Saw offering PFML, in part, as creating a competitive advantage in talent recruitment. It decided to exceed its competitive group's average offering by 2 weeks.
Company B: Analyzed what new mothers at the company were taking in unpaid leave and spoke to mothers to confirm this was the optimal number of weeks to offer. For equity, offered fathers the same number of weeks (excluding disability).
Company C: Determined the number of weeks that would feel "right and fair" and made it feasible for the business by offering 100% pay for the first several weeks, and a portion of regular pay for the remaining weeks.