Employers bump up paid parental leave as they try to hold on to workers

As the labor market tightened in 2018, U.S. employers turned to one benefit in particular to attract and retain workers: paid family leave.

After Starbucks Corp. and Walmart Inc. extended paid time off to hourly workers in January, at least 18 more large companies followed suit. As a result, an estimated 4.8 million people had access to more generous paid leave benefits this year, according to data compiled by PLUS, a paid leave advocacy organization.

Many employers, like General Mills Inc., increased the amount of paid time off available to new moms and added the benefit for new dads, too. Paid time off to care for a sick relative or loved one is also on the rise, the survey found.

The U.S. remains the only high-income country that fails to provide paid family leave, and companies typically have extended such benefits only to salaried or full-time workers. This year, that started to change. In addition to Starbucks and Walmart, H&M, Dollar General Corp. and Darden Restaurants Inc. extended their policies to cover more classes of workers. Now more than half of the 57 largest employers tracked by PLUS offer the same amount of leave time to all classes of employees. About a dozen now say they offer paid caregiver leave, up from just two in 2017.

“When a few big companies implement a policy there’s a little bit of follow the leader,” said Annie Sartor, an advocacy director at PLUS. “They’re leveling up.”

They’re also getting pressure from their employees. Millennials, now the biggest demographic in the U.S. workforce, have pushed for paid family leave as they age into parenthood. At H&M, union members worked for two years to get paid family leave for part-time workers; their new contract, signed earlier this month, includes the expanded coverage.

“When employees demand it companies have to respond, especially when unemployment is so low,” Sartor said.

Workers aren’t alone in advocating for better family benefits. Earlier this year, Microsoft Corp. announced that it would require the companies it contracts with to provide their employees at least 12 weeks of paid time off at the birth or adoption of a child, establishing the influence a big company can exert over its business partners.

Even so, most employees — 83%, according to the Bureau of Labor Statistics — don’t have access to paid family leave. The federal Family and Medical Leave Act guarantees 12 weeks of unpaid leave for certain workers at larger firms. California law extends unpaid leave to smaller employers as well, and provides for partial pay through the California Paid Family Leave law. However, for a variety of reasons, lower-paid workers are the least likely to take advantage of family leave.

The policies at many major employers don’t cover large swaths of workers. Contract workers in particular, who make up nearly 7% of the workforce, are still largely excluded, though that too is under scrutiny: Google employees recently lobbied the company’s chief executive demanding more generous coverage for the tech giant’s contractors.