For many small or micro businesses, the thought of offering parental leave can be a sore spot. The challenges of managing extended absences—combined with the costs and operational disruptions—often discourage the implementation of a parental leave program. This is even more common in environments where every employee is essential and resources are scarce, which is often the case for small businesses. Yet, the lack of an intentional parental leave policy can significantly affect employee satisfaction and retention.
Paid parental leave is the third most requested workplace benefit, perk, or incentive, and 60% of workers would leave their job to find a role that offers better employee benefits. There’s an opportunity for clear parental leave policies on employee retention and satisfaction, even for small and micro businesses. However, small businesses, particularly those with fewer than 300 employees, feel the impact of parental leave more acutely due to their limited resources.
The inability to backfill positions can lead to disruptions in day-to-day operations and a decline in long-term productivity. But when small businesses do not offer paid parental leave, they face a higher risk of losing employees to larger organizations that provide more robust family support. That’s why 70% of employers are looking to add or expand their paid parental leave policies despite the challenges.
To help small businesses successfully offer and manage parental leave, we’ve designed a Small Business Guide to Paid Parental Leave.
This guide is designed to help small, lean teams manage parental leave effectively, ensuring both the business and its employees are supported when a team member takes leave. It includes best practices to analyze and audit existing offerings, strategies to afford paid parental leave, and tips to manage talent while supporting parental leave.
Here's what you need to know.
While not all small companies may be ready to navigate the complex terrain of leave policies, it’s still important to understand the differences between leave laws and paid leave.
Leave Laws: While the Family and Medical Leave Act FMLA applies only to companies with 50+ employees within a 75-mile radius, other state-specific laws, like PDL and CFRA (California Family Rights Act) in California, still impact smaller companies. These laws provide job protection and health insurance continuation but do not mandate paid leave, proving the need for businesses to understand the differences and implications for their operations.
Paid Leave: Even if your small business doesn't fall under any federal or state leave law requirements, employees are still eligible to apply for existing paid family leave programs. Unfortunately, these existing paid leave programs are limited to just a handful of states. Check out our free PFL Guide to see if your state has paid parental leave!
Only 27% of employees currently have access to paid leave, which leaves most employers without a way to fund paid parental leave.
Implementing effective parental leave policies in small businesses entails more than just creating guidelines; it demands a management approach that is supportive and adaptable. Here are some strategies to consider:
Currently, only 15% of employers with fewer than 100 employees provide paid leave options, but that doesn’t mean that small businesses can’t afford to offer paid parental leave. Parento helps businesses of all sizes manage and afford paid parental leave.
The Parento program is a comprehensive suite of products that includes:
Every company, regardless of size, has the capability and responsibility to offer paid parental leave. Implementing a thoughtful policy supports your employees during critical life events and enhances your company's reputation as a progressive and caring workplace. By adopting flexible and scalable policies, like Parento, small businesses can offer equitable and supportive benefits that foster a more inclusive and motivated workforce. Embrace the opportunity to make a substantial difference in the lives of your employees and the success of your business by offering paid parental leave.
