Paid parental leave is a hot topic in Washington right now, but companies nationwide are actually the ones leading the way in providing or expanding time off benefits to their employees.
Corporate tax cuts and other tax reforms have fueled the latest expansions in paid leave benefits for potentially millions of workers nationwide.
A tsunami of companies (big and small) have announced $1,000 bonuses, higher salaries, and new education benefits as a result of tax cuts. A handful of employers have also decided to pass tax savings on to their workers by offering or expanding paid time off for moms and dads (and adoptive parents)..
Here are five companies that expanded their parental leave benefits because of tax cuts:
1. Chipotle – Hourly managers and salaried employees will be eligible for additional paid parental leave.
2. WalMart – Providing full-time hourly workers 10 weeks of paid maternity leave and six weeks of paid parental leave. It’s also offering to full-time hourly and salaried employees $5,000 of adoption benefits per child.
3. CVS – Offering four weeks of fully paid parental leave for full-time employees (hourly and salaried) beginning April 1. Previously only women received paid benefits and only at a partial pay rate.
4. Lowes – Expanding benefits package to provide up to 10 weeks of paid maternity leave, two weeks of paid parental leave, and $5,000 in adoption assistance.
5. Starbucks – Expanding parental leave policy to include non-birth parents with up to 6 weeks of paid leave when welcoming a new child. Starbucks already offers six weeks of paid leave to new birth mothers employed at its stores and even more to those in corporate positions.
Although 90 percent of workers have access to paid time off, only about 16 percent of full-time workers have paid family leave according to the Bureau of Labor Statistics.
In a strong economy that is creating new job opportunities, employers will add or expand benefits to retain good workers or attract new ones – boosting access to paid leave. In this case, employers are responding to tax cuts by reinvesting in their workers and adding desirable benefits.
Not every employer can afford it though. For those who can’t, government can play a role in helping workers gain access to paid time off without creating a costly new entitlement program.
Proposals such as this one from IWF recommends allowing workers to collect a small measure of Social Security benefits early and then defer their retirement in the future. Other proposals include creating personal care accounts or tax-beneficial savings accounts, as well as providing tax incentives to employers who offer paid leave benefits.
Government mandates are not a good solution though. They impose new costs on employers and employees or that could erode current benefits provided by private employers. These plans can backfire on women by keeping their paychecks low, removing their flexibility in the workplace, and limiting their career advancement.
Unfortunately, states are increasingly turning to this option to solve the problem of workers who don't have parental leave.
For more background on paid leave and the wrong approaches to solving it, click here.