In this week’s Money Minute, I explain some lesser-known facts about maternity and paternity leave.
By law, working parents in the U.S. can take up to 12 weeks of leave after the birth of a child. But there are three big catches:
The law applies to state and federal agencies, but private companies only have to comply if they employ more than 50 workers.
You must have worked at least 1,250 hours in the last 12 months. Because of that rule, only 60% of workers are eligible for unpaid family leave, including just two out of five new mothers.
Last and most soul-crushing of all -- even if you qualify for leave, you might not get paid for it. The U.S. is one of the only developed countries that doesn’t require PAID maternity and paternity leave for workers. Only a few states (California, New Jersey, Massachusetts and Rhode Island) have implemented paid family leave laws on their own, so it’s really up to individual companies to step up to the plate. Sadly, only 11% have.
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This can put new parents in a really tight spot -- do they take 12 weeks off without pay and hope they can scrape by? Or do they go back to work right away and find some way to afford (give or take) $12,000 a year for child care? Some parents choose to leave their jobs altogether if they aren’t earning enough to cover the cost of childcare, and although some dads are staying home with children, the majority of stay-at-home parents are women, whose earnings are disproportionately impacted after childbirth. Having a child costs the average high-skilled woman $230,000 in lost lifetime wages compared to women who never have children. Low-skilled women stand to lose $49,000 in lifetime earnings.
Some companies aren’t waiting for policy makers to become more generous with family leave policies. Tech companies have emerged as leaders in family leave policies -- Netflix (NFLX) just rolled out an unlimited paid leave program. Meanwhile, Google (GOOGL) offers 5 months, Reddit workers get 17 weeks and Yahoo (YHOO), which owns Yahoo Finance, and Facebook (FB) each offer 16 weeks paid leave.
What does your company’s parental leave policy look like? Drop me a note on Facebook or Twitter.
