How Maternity Leave Works: The Employer’s Guide

All your questions about maternity leave answered, plus learn how a supportive policy boosts productivity, helps retention and increases company loyalty.

Maternity Leave Small Business

Maternity leave is becoming more of a topic of interest for workers and businesses. Expectant mothers aren’t the only ones interested. New hires looking to plan their families often consider a maternity leave policy or benefits as a reason to join a company. Even those who aren’t anticipating the need for maternity leave look more favorably on companies that support employees and family.

For businesses, maternity leave ⁠— either paid or unpaid ⁠— may seem like an expense. But a maternity leave policy can have strong benefits for business in addition to drawing in talent. It can help with productivity, retention and even company loyalty. Smart business owners know these can be a great value for the company.

What is maternity leave?

Maternity leave refers to the period of time when a mother stops working following the birth of a child. When an employee is expecting, the employer can expect to receive time off requests. Maternity leave can start before the child is born if the mother requests it or has complications in her pregnancy; or it can begin after birth.

For small- to medium-sized businesses, maternity leave can cause complications for the company, as well. Covering workload and shifts can be difficult, but more and more employers are seeing the benefit of providing a maternity leave benefit as generous as they can afford.

Is maternity leave required by law?

For the majority of women in the workforce, maternity leave is not required by law. Although the Family and Medical Leave Act (FMLA) provides job-protected leave for workers in the event of a birth or placement of a child in adoptive care, 40% of women do not qualify under the law for maternity leave. This could be due to the size of the organization (business with less than 50 employees are not covered) or due to their length of service on the job.

Employees are entitled to paid family leave in the District of Columbia and five states: California, New Jersey, Rhode Island, New York and Washington. The amount of leave time available and the rate of pay varies by state. Businesses should check any mandates in their location for guidelines.

How long is maternity leave?

The length of leave is established or businesses covered under Federal or State family leave guidelines. For federal FMLA, 12 weeks is the maximum. States with guidelines differ.

In California, qualifying mothers can receive up to 52 weeks of leave (partially paid) for the birth of a child. New York’s short-term disability insurance can provide up to 26 weeks of partially paid leave for mothers. Other states have similar programs.

For the remainder of women in the US, their employer’s leave policy determines how much, if any, leave they’re entitled to when they give birth. It’s a best practice to create a maternity leave policy that sets leave time allowances, whether the employee will be paid, and if a maternity leave letter is required.

The Society for Human Resource Management (SHRM) reported in 2017 60% of employers offer 12 weeks of maternity leave; 33% offer longer leaves. These can include paid and unpaid time off. The study also found 81% of companies offered mothers some type of gradual return to work after the birth of their child. This could mean part-time hours or shift changes in the short term.

When does maternity leave start?

Leave can start before the child is born if the mother wants to prepare for the birth, or after. Complications of pregnancy may dictate when a mother will begin her leave. For women who work for a company with 15 or more employees, the Pregnancy Discrimination Act offers some job protection in the event of a complication. These employees should be treated like any worker with a temporary disability.

The economics of maternity leave

The United States is the only developed nation that does not mandate paid maternity leave. In some countries, like Finland, new moms are paid for up to three years after the birth of their child. In the UK, they can receive up to 39 weeks of paid maternity leave. In the US, it’s estimated only 16% of private-industry workers have access to any type of paid maternity leave.

The cost of taking time away from work for the birth of a child can have a direct impact on the amount of leave time requested and used. Over two-thirds of all mothers and 40% of households with children under 18 are run by women who are the primary breadwinner. Some data puts 25% of women return to work within 2 weeks of the birth of their child: likely for economic reasons.

While 70% of women report taking some time off after a birth, 16% report they take only 1 to 4 weeks; about half take at least 5 weeks of leave and 25% take nine weeks or longer. The remaining one-third of mothers don’t take any time off, returning to work almost immediately after the birth of their child.

Is maternity leave paid or unpaid? 

For the majority of women in the US, maternity leave is unpaid. Only a handful of states mandate maternity leave pay. From private companies, about 35% offered some type of paid maternity leave in 2018, according to the Society for Human Resource Management.

For many companies, paid maternity leave is a benefit worth pursuing. In a tight applicant market, turnover is costly – some estimates put it at one-fifth an employee’s annual salary. The cost of several weeks or months paid leave can be a bargain in comparison. One study revealed new moms who took paid leave were more likely to return and stay on the job 9 to 12 months after their leave ended than their non-paid counterparts. First-time moms were more likely to return to their employer if their leave was paid, as well.

What is a maternity leave letter and is it required?

A maternity leave letter is not required by law, but many companies use them to document an employee leave request so they can determine how work will be redistributed during the absence and when the mom plans to return. Employees may voluntarily offer them to document their request. The letter generally outlines how much leave the new mother anticipates they will need and when the company can expect them to return to work. Some new mothers offer suggestions on how to allocate their work load in their absence, as well.

Whether you receive a formal maternity leave letter or a verbal notification, it’s a best practice to document what has been requested. Send a written acknowledgement of the letter, if received, or work with the employee to create a leave request document that outlines when they anticipate they’ll begin taking time off and when they expect to return. Documenting the leave request provides business with a timeline that helps redistribute work and allocate any pay provided.

Why maternity leave is so important

The US workforce is ever-growing and without new workers to fill the jobs of the future, business will grind to a halt. Children make that happen. When workers have the job-protection they need, and even some form of compensation, they can start their families with confidence.

In addition to helping workers, maternity leave (paid and unpaid) helps employers. It can boost morale and productivity as well as labor force attachment. Mothers who receive maternity leave return to their original employer and are more likely to stay there.

Reducing the high cost of turnover and the associated training costs for new hires are another benefit of a maternity leave policy. A maternity leave policy can be a powerful attractant to job seekers. With talent at a premium, every benefit an employer provides helps their chances of hiring the best quality candidates.

The bottom line? Maternity leave is good for workers and for business. A maternity leave policy attracts and retains employees and helps mothers take the time they need so they can come back to the job ready to work.

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