Parental leave: strategies for the 1990s - Special Report - New Incentives for a Changing Work Force

Parental leave: Strategies for the 1990s

Congress may soon mandate parental leave. Here's how some innovative companies are already handling the issue.

On Capitol Hill, battle lines are drawn over the Family and Medical Leave Act, with a long list of supporters--including co-sponsors Sen. Christopher Dodd (D-Conn.) and Rep. Patricia Schroeder (D-Colo.)--pitted against many U.S. business interests and President George Bush.

The legislation, expected to go to the floors of both houses for a vote early this year, would require employers to give unpaid family leave to parents of newly born, newly adopted, or seriously ill children. (The bill also would provide leave for workers with ill parents, and for employees with a severe illness.)

Similar bills

Both the Senate and the House versions would grant 10 weeks of parental leave to both women and men. The major difference between the two bills is that the Senate version covers any company with 20 or more employees, while the House bill is aimed at employers with 50 or more workers.

Supporters of the proposal say mandated leave is necessary since most employers don't offer time off for infant care. Currently, employers must comply with the federal Pregnancy Discrimination Act, which says they can't treat pregnant women differently than anyone else who's temporarily disabled.

"Unfortunately, most employers don't provide their employees with leaves for temporary disabilities," says Judy Auerbach, congressional science fellow in the office of Rep. Schroeder. "People too often lose their jobs because of pregnancy, childbirth, or some illness."

Hearings reveal bias

Congressional hearings provided a forum for employees who had lost their jobs after taking leave. Atlanta secretary Beverly Wilkinson worked until the day before her son was born, then took five weeks of unpaid maternity leave and two weeks of vacation. The day before she was due to return to work, she received a phone call from her supervisor who unceremoniously told her that her job had been eliminated.

"I was stunned. I felt betrayed. I had invested five years of my life in that company," Wilkinson told a House hearing on parental leave.

Studies reveal a widespread lack of family and medical leave policies. * Barely half of U.S. companies offer unpaid maternity leave for working mothers, according to a survey by Catalyst. * Only a third of women in companies with 100 or more employees are eligible for unpaid time off, U.S. Bureau of Labor Statistics data show.

Cost fuels debate

Cost is the major focus of debate. The General Accounting Office estimates that, at most, the law would cost employers $236 million annually. That amount is to continue health benefits (a legal requirement) for employees on unpaid parental leave.

The National Federation of Independent Business and others in the business community contend that the price tag would be higher if the costs of training employees to fill vacancies and of lost productivity were counted in. Small businesses would be hard hit. Opponents of the legislation predict many would be forced into bankruptcy.

What's more, critics say, such legislation may actually backfire, hurting those it's intended to protect. Companies might be reluctant to hire women of childbearing age because of the cost of these mandated benefits.

But the bill's supporters claim that's unlikely since the coming labor shortage will make employers even more dependent on women workers.

Today, the real question, say some experts, is not whether there is a need for parental leave, but what shape these policies should take--paid or unpaid, weeks or months off, mandated or not.

Facing a groundswell of political support for parental leave, employers--large and small--may soon find that they have no choice but to provide time off for working parents.

"It's inevitable that almost all companies will offer parental leave," says Karen Geiger, vice president and director of career development for NCNB Corp. in Charlotte, N.C.

Corporate solutions

Those who want to design their own family leave policies have some good examples to follow.

A leader in this area is Merck & Co., Inc., the Rahway, N.J.-based pharmaceutical giant that repeatedly shows up on lists of the best places for working women and parents. There's a good reason why. Merck offers six weeks of paid maternity leave and up to an unparalleled 18 months of unpaid leave for mothers and fathers. Benefits continue and job security is promised.

Only a few Merck employees have taken the full 18 months off; the average leave is slightly more than four months. Another option at Merck: Employees can initially come back on a part-time basis.

"By encouraging this, we let a person spend time with her child, but we also get an employee back on the job faster," observes Art Strohmer, executive director for human resources for Merck.

NCNB Corp. might seem, at first glance, like the last company that would accommodate working mothers. This large banking company has a reputation of expecting employees to do the Herculean. Indeed, Fortune magazine last year named NCNB's Chairman Hugh McColl Jr. as one of "America's toughest bosses."

Still, this hard-charging company drew up a new policy in response to a 1985 employee survey that found that people wanted longer parental leaves and an option to work part time.

NCNB now offers six months of unpaid parental leave--for either a newborn or an adopted child--for mothers and fathers. If employees want to come back before six months are up, they can "phase in" --work on a part-time basis.

Since the program started in 1987, very few people have stayed out the full six months, says NCNB's Geiger. About a fourth of the people on leave take off the first two months, work part time the next two, and are back on the job full time by the fifth month.

"The reason why we try to be so flexible is simple: The work force demands it," she says.

Despite its hard-driving reputation, NCNB seems to have a soft spot for children. "At 3 months old, babies are smiling and responding to a parent," says Geiger. "Forcing someone to return to work right then can be a heart-wrenching experience for that person."

Southern New England Telephone Co. offers employees up to one year of job-guaranteed unpaid leave to care for a newborn or newly adopted child, and medical leave for serious health conditions, including disabilities related to pregnancy and childbirth.

IBM Corp. recently introduced a policy offering employees up to three years of unpaid leave for a "serious reason," including the care of a new child or a sick relative. Employees continue to receive company-paid benefits and are assured a job at the end of the leave. According to IBM officials, the move was made to respond to changing employment demographics, to help employees balance work and family life, and to bolster employee loyalty and increase productivity in a competitive market.

Small-employer solutions

Parental leave hasn't won unanimous applause. Many small businesses say that such leaves are simply an economic impossibility.

"I have a staff of 15 people. I can't afford to hire a replacement for someone who takes off for five months. Sure, big companies can work around this, but what about us little guys?" argues a small furniture retailer in New York, who asked not to be identified. "I don't want to sound like the bad guy, but women aren't being realistic."

While such concerns about cost are valid, they may be overblown, says Sarah Mulady, director of employee assistance programs at Champion International Corp. in Stamford, Conn. There are solutions for businesses of all sizes, she maintains.

"We're sympathetic to small employers--in fact, we have over 100 facilities with anywhere from five to 200 employees. Our solution is to train people to do multiple jobs. That way, people pick up the slack during absences--whether the person who's absent just had a heart attack or a baby."

Champion International offers up to six months unpaid parental leave to employees in all corporate locations.

Loretta King, owner of a 50-person office supply company in College Station, Tex., agrees teaching workers more than one job is key to making leave policies work.

"For every job in our company, at least two people are trained as backups. If an employee does need to be gone, it's less disruptive for us," King told a congressional hearing on parental leave. "Any business can absorb employee leaves with little or no disruption of their normal operations if they just plan ahead." King allows employees to take up to three months of unpaid parental leave with guaranteed jobs and benefits.

Adds NCNB's Geiger: "Managers at our small branches do complain about our policy. I tell them to be creative. There are people in a community who want to work part time. It may take extra effort to find them, but they are there."

As NCNB is learning, if a leave policy is to work, it must have the support of everyone from the chairman down to the first-line managers. Whatever a company's policies and benefits might be, often it's an employee's immediate supervisor who decides how much time--if any--can be taken off.

Gauging response

Whether or not Congress passes a family and medical leave bill next month, next year, or next decade, parental leave is clearly an issue that's here to stay.

"If companies want to recruit and retain good people, they'll have to offer such a policy," Detroit attorney Henry Saad, a specialist in labor law, told human resource executives at a conference last June in Boston. "After the smoke clears, almost all U.S. employers will let employees take time off to care for a newborn.

"People in 20 years will wonder why we wasted time talking about parental leave."

COPYRIGHT 1990 A Thomson Healthcare Company
COPYRIGHT 2004 Gale Group