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How Parental Leave in the U.S. Compares Internationally

According to Pew Research, the U.S. stands alone among developed nations in its parental leave policies. Compared to 41 of the world’s largest nations, only the U.S. mandates no paid parental leave at all.

The next lowest nation – New Zealand – mandates 8 weeks of parental leave. Estonia, by contrast, requires over a year of leave. However, paid parental leave offerings are not necessarily as clear-cut as they appear; specific requirements can vary tremendously. For example, some countries – like Israel, Ireland, Switzerland, and New Zealand – allocate all paid leave to mothers alone. Other nations include paternity leave for fathers as well, though – on average – fathers account for less than 20% of parental leave taking.

Reimbursement rates can also vary between countries. Many countries reimburse at or near 100% of average earnings, but others may reimburse only at reduced rates – less than 30% of average earnings, in some cases.

It may surprise some people to realize that the U.S. mandates no parental leave, given the otherwise generous allowances made by the Family Medical Leave Act (FMLA, which turns 25 years old this year). The keyword in this discussion is “paid.” The FMLA does indeed require employers to allow new parents to take up to 12 weeks off, but that time will be unpaid, and it is subject to restrictions for which many U.S. workers don’t qualify. One nice thing about the FMLA, however: near gender parity. Men and women take nearly equal amounts of parental leave under FMLA provisions.

Unpaid leave can put a strain on new parents. Out-of-pocket costs for childbirth alone can hit thousands of dollars in the U.S. Yet, the Urban Institute reports that household income typically falls by 10% at the point of childbirth and doesn’t recover for months.

Certain states have passed parental leave requirements, but these too tend to be less generous than other countries. California, for example, passed the California Paid Family Leave Act in July 2004 that provides workers up to 6 weeks of leave paid at 55% of their wages, funded by the workers themselves, and increased the “wage replacement rate to approximately 60 to 70% (depending on income)” for claims starting January 1, 2018 or after (State of California EDD).

In this environment, U.S. employers typically set their own policies based on employee recruitment and retention goals. In environments where it’s difficult to recruit qualified talent, generous leave policies can entice new workers and promote loyalty of the existing workforce. That may be why, for example, Netflix offers up to a year of parental leave, Amazon up to 20 weeks, and Google up to 18 weeks. However, more than 40% of medium-to-large companies don’t offer parental leave benefits at all (outside of FMLA requirements).

 

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.

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