PARENTAL LEAVE: HOW LONG IS ENOUGH TIME?

As companies and countries institute policies enabling paid parental and family leave benefits, are they asking themselves: How long is enough time or how long is too long? This question was discussed at the 2020 Colloquium on Global Diversity, which was held in Washington, DC from February 27-28th. At this session on parental leave, two U.S. companies with best practice parental leave benefits were juxtaposed against two European countries’ mandated leave policies.

With the U.S. standing alongside Papua New Guinea as the only countries in the world without a federal paid maternity leave policy, many large U.S. companies have engaged in a type of parental leave arms race to attract and retain young employees. Among the companies with longer paid leave programs, Dow Jones offers up to 20 weeks paid parental leave and Deloitte provides 16 weeks of paid family leave which can be used to cover a broad range of life events beyond the birth or adoption of a child, such as caring for an ailing parent or sibling.

Since implementing its policy in 2016, Deloitte has found that women increased the duration of their leave, while participation of male employees also increased, although the duration was not yet at the level of women. This increased usage resulted in lessening employee turnover, which was the goal of the program overall.

Juxtaposed with the policies of U.S. corporations are the policies in place at the federal level throughout Europe. Throughout the 28 European Union countries, the average length of maternal and paternal leave combined is 98 weeks. This may sound attractive to U.S. workers, but what are the consequences of such lengthy parental leave policies?  

In Germany:

·        66% of mothers tend to shift to part-time work after child birth, while only 5.8% of fathers do so. Part-time jobs are perceived as “career-killers” by the majority of employees;

·        Women who take more than one year of parental leave earn on average 10% less per hour than women who did not take time off for parental leave;

·        Motherhood is still seen as an expression of a lack of career ambition; and

·        The longer women are away or work part-time, the more difficult it is to catch up with career ambitions due to decreased visibility, shrinking networks, tech innovations and organizational changes.

 Meanwhile, Poland, has the highest length of combined maternal and paternal leave at an average of four years (of which 71 weeks are paid), while offering an additional monthly stipend per child for families. As in Germany, these generous family benefits have had a negative effect on women in the labor market as well as on the nation’s economy.

First, fewer women with children re-entered the workforce as a result of the subsidies. Secondly, the long gap made it difficult for women to wished to re-enter the labor market. For those able to do so, remuneration tended to be lower. Finally, the shortened career and lesser wages result in a lower pension.

To see more about the 2020 Colloquium, please go to www.globewomen.org/globaldiversity.