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Tech Companies Adopt Generous Parental Leave: Should Others Follow?

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By Casey C. Sullivan, Esq. on August 11, 2015 11:58 AM

Forget Alphabet or Moore's Law or artificial intelligence: when it comes to big news in tech, families are taking center stage. Less than a week ago, Netflix announced a new, generous parental leave policy, giving new parents as much paid time off as they need. Then Microsoft followed suit, announcing that employees could take five months of leave. Yesterday, Adobe caught up, offering over six months of paid leave.

Apparently, parental leave has become the new hot commodity when it comes to recruiting and retaining top talent and proving one's commitment to employees and family. Should your company follow suit?

Rare, but Growing Leave

The new, expansive policies are gaining headlines because they are unusual. Netflix is offering a "take as much time as you need" approach to parental leave. New parents can spend as much time as they want out of the office during the first year after the birth or adoption of a new child. At Microsoft, all new parents will now get three months of paid leave. Birth mothers can take an extra eight weeks of paid disability, plus two weeks of short term disability before birth. Adobe trumped Microsoft with an extra month of paid leave, though both still look stingy next to Netflix.

Next to everyone else, however, these policies are unprecedented. While paid parental leave is becoming more common, it's still very rare. Only 20 percent of U.S. companies offer any paid parental leave beyond what is required by disability or state laws, according to The Wall Street Journal. That is up from just 14 percent in 2014. As Netflix and co. are undoubtedly aware, the relative rarity of such policies makes them an important tool in recruiting and retaining talent. Hopefully they will help redress the longstanding gender disparity in the industry as well.

Good in Name, but in Practice?

Generous parental leave often goes under utilized. The "take what you need" approach can subtly pressure workers into taking less, whether it's parental leave or vacation time. Workers may feel that the policies are in place in name only -- that a new mother who took four months or a year of paid leave would not be able to return to a similar position when the leave ends. This is particularly true when it comes to leave for new fathers, who cite negative career consequences as one of the main reasons for taking little or no paternity leave.

Finally, when it comes to legal consequences, generous policies are not always the panacea that press releases may make them out to be. First, as with any benefit program, companies considering expanded paternal leave will need to balance that leave against their overall business goals. Secondly, courts may interpret those policies as legally binding terms of employment, potentially leading to future litigation. Of course, for many companies, the recruiting, retention, and P.R. benefits are enough to outweigh any risks.

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