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Why Companies Are Cutting Paid Parental Leave Policies Post Pandemic

After increasing paid parental leave benefits during the pandemic, many companies are now rolling back policies blaming inflation and the possibility of a looming recession.
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By Wyndi Kappes, Associate Editor
Updated August 25, 2022
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The pandemic undoubtedly has made some big changes in the workplace. Many of those changes, from remote work to better benefits, have provided much-needed relief and help for parents. Unfortunately, as COVID-19 cases wane, so do these integral benefits.

According to a new employee benefits survey by the Society of Human Resource Management (SHRM), organizations have largely rolled back their parental leave policies to pre-pandemic levels after beefing them up during 2020. Only 35 percent of employers are now offering paid maternity leave beyond what is legally required, down from 53 percent in 2020, and only 33 percent of employers are offering paid paternity leave, down from 44 percent in 2020.

So why the cutbacks? Some large companies like Hulu blame inflation. By reducing parental leave benefits, they are shoring up resources and money to prepare for a looming recession. What is frustrating about this reasoning for so many parents is that the number of employers providing paid vacation and paid sick leave has increased. According to the SHRM survey, 99 percent of employers offer paid vacation and 96 percent offer paid sick leave—both up 1 percent since 2020.

It seems like, once again, the needs and priorities of parents in the workforce have been left in the dust. In just a short period of time, organizations have forgotten that many parents still are struggling to find and afford childcare, educate their children and bond with their babies. Even if they are seemingly being left behind by companies, moms and dads across America are making their needs known. Eighty-two percent of employees surveyed identified paid parental leave as “very important” or “extremely important.”

Studies have shown that paid parental leave benefits parents, companies and the American economy as a whole. The Center on Budget and Policy Priorities (CBPP) points to the many established benefits in a 2021 report.

“Providing new parents with paid time off to care for newborns or recently adopted children contributes to the children’s healthy development, improves maternal health, supports fathers’ involvement in care, and enhances families’ economic security,” CBPP notes. “Paid medical and caregiving leave lets workers care for themselves and loved ones when ill or injured and reduces financial insecurity and stress during those times. Paid leave benefits businesses by improving retention and productivity, and can boost labor force participation.”

While the United States has made huge strides over the past 20 years to improve paid parental leave—nearly twice as many companies offer parental leave now as they did in 2005—this step backward is not acceptable. For many, a lack of paid parental leave means either no leave or going into debt to take it. We can’t continue to penalize parents for growing their families and being there for their children.

If you are passionate about advocating for federal paid parental leave, consider getting involved with organizations pushing for change like the Chamber of Mothers, Paid Leave for the US and Paid Leave for All. You can also read more about one mom’s account of why paid parental leave Is so important here.

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