Netflix, the Los Gatos, California-based video streaming company, yesterday announced a policy of "unlimited" paid maternity and paternity leave during the first year after the birth or adoption of a child. Netflix's Chief Talent Officer Tawni Cranz outlined the policy in a blog post.

The New York Times reports:

As part of the new maternity and paternity policy, employees will receive their normal pay. They will be able to return to work part time or full time, and they may also return to work and then take additional time off, if needed.

This policy far exceeds typical such leave at corporations in the United States, where there are few federal policies aimed at working parents. The Family and Medical Leave Act of 1993 provides employees at companies of a certain size 12 weeks of unpaid leave.

“Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field,” Tawni Cranz, chief talent officer at Netflix, said in a blog post on the company’s website.

“This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.”

San Francisco and Silicone Valley have been in the vanguard of offering generous family leave, but Netflix's policy sets a new high. Benefits, including stock vesting, which can be very lucrative in the tech world, will continue during the time off.

This sounds like a wonderful benefit for Netflix employees and we'll be eagerly awaiting news of how it functions.

We also want to point out something important: Netflix seems able to afford this generous benefit. Netflix shares were $122.79 yesterday, an all-time high for the company. Some companies would become insolvent if they tried anything remotely similar. I think one thing it shows is that American companies do what they can to be fair and to hold great talent. But it does not show that all companies can afford Netflix's generosity.

IWF's Executive Director Sabrina Schaeffer commented on Netflix's new policy:

“Netflix’s new maternity and paternity policy in which they give workers unlimited leave for the first year after the birth of a child," she said, "demonstrates just how rapidly the workplace is changing to accommodate employees’ lives outside of the office — and modern technology has certainly made this possible in a way it wouldn’t have been even a decade ago.

 “Some assume such a generous workplace benefit would have serious complications. But research shows that most employees only use half the vacation time with which they’re provided. Male and female workers are eager to move up the corporate ladder, which often serves as a healthy check on abusing leave packages such as this one. IWF’s own research on What Women Want in the Workplace reinforces this idea. Controlling for other workplace attributes there is very little difference in a woman’s preference for a job if they offer 15 days paid vacation leave or 20 or 25 days paid vacation leave. Workers want some reassurance that they will have time away from the office, but are reasonable in their expectations.

 “While Netflix can afford to offer this generous leave policy, lawmakers should be careful not to use this as an excuse to institute paid leave mandates across the board. Certainly all businesses can’t compete with Netflix and mandates will lead to fewer jobs, lower wages, and less flexibility all around. The best thing for all workers is a robust economy in which there are plentiful job opportunities, which will put upward pressure on both wages and benefits.