If California's new governor can deliver on his proposal to offer 6 months of paid parental leave, it would be the most generous policy in the US

  • California Gov. Gavin Newsom announced this month he would make six months of paid parental leave, to be split between two parents, a priority for the state but has yet to determine a funding plan.
  • Aside from health benefits, research has found that paid parental leave benefits employees’ careers.
  • The US remains the only developed country without a federal paid family leave policy, but large American companies have competed for talent by offering increasingly generous benefits.
  • This article is part of Business Insider’s ongoing series on Better Capitalism.

California’s new governor, Gavin Newsom, grabbed national headlines earlier this month when an unnamed staffer confirmed with the New York Times that Gov. Newsom’s budget proposal would include a plan for six months of paid parental leave for all Californians.

The United States is the only developed country without a paid parental leave policy, and only six states and Washington, DC have a current or upcoming family leave policy that could be used either for a new child or a sick family member – those states are California (six), Washington (12 in 2021), New York (10, increasing to 12 in 2021), Massachusetts (12 in 2020), Rhode Island (four), and New Jersey (six).

Newsom’s proposal, still in its nascent stage, will split those six months between two parents. Newsom’s chief of staff, Ann O’Leary, told Calmatters on Wednesday that could mean two parents each take three months, or one takes four and the other two. That is, Newsom’s proposal at this stage is for 12-16 weeks of paid parental leave for the primary caregiver, and 8-12 for the secondary caregiver.

Even with that qualifier and even with a lack of a budget or payment plan, any significant increase would be worth noting.

Americans want paid parental leave, but many don’t have it

Paid parental leave is popular among Americans. A 2016 Pew poll of 6,000 Americans found that 82% said mothers should have paid leave following birth or adoption, and 69% said fathers should have the same benefit. (Interesting to note, however, is that the large majority of those in favour of either benefit said employers should pay for it, rather than federal or state governments.)

That is not the norm. Pew found that the US was the sole country of 41 developed countries around the world to not have a paid parental leave policy.

The United Nations’ International Labour Organisation found that even a decade ago, a third of its 167 member states offered “at least 14 weeks of leave at a rate of at least two-thirds of previous earnings, paid by social security, public funds or in a manner determined by national law and practice where the employer is not solely responsible for payment.”

As it stands now in states with paid leave policies, the state is obligated to cover any weeks an employer does not, and even employees who took advantage of their employer’s benefit can use the state’s benefit.

Big corporations use it to compete for talent

With the combination of a lack of a federal policy for paid parental leave and the rising demand for the benefit among millennial parents, America’s biggest corporations have either added a policy on vastly improved on an existing one in the last several years as a way to attract talent.

With help from the career site Glassdoor, we identified large companies whose American employees rate their parental benefits highly. This is not at all an exhaustive ranking of companies with the most generous policies, but is a look at big-name corporations across a variety of industries that are competing for talent. We defined “other” as a parental leave for the secondary caregiver. Most companies give extra benefits to mothers who gave birth.

Notable parental leave benefits large US companies tableShayanne Gal/Business Insider

How employees benefit from paid leave

When discussing the benefits of parental leave, there are physical, emotional, financial, and career components.

After giving birth, a mother typically needs six to eight weeks for her body to return to its pre-pregnant state, according to Stanford Children’s Health. And regardless of whether a mother gave birth, used a surrogate, or adopted, a baby’s brain goes through rapid growth in its first year, and a healthy bond with a caregiver during this period has lasting positive effects on a child’s development.

The nature of this bond is important to all types of parenting situations, and is why parental leave, and not just maternity leave for birth mothers, has become the standard way of considering a leave benefit. Related, of course, is the importance of establishing a bond with an adopted child in the weeks following the adoption, regardless of age.

There are also the expenses that accrue around a newborn: clothes, diapers, potentially formula, furniture, doctor’s visits, and accessories that ensure the baby’s health and safety. Losing a parent’s income for a newborn can become a heavy burden.


Read more: Most people in America want paid parental leave – here’s the real reason the US is the only developed nation that doesn’t have it

Then there’s the benefit to new mothers who do not want to be forced with a choice between having a child and having a career. In a 2012 study conducted by Rutgers University’s Center for Women at Work, researchers found that American women who took advantage of a paid maternity leave were “far more likely” than mothers who hadn’t to be working nine to 12 months after giving birth, and were 39% less likely to use public assistance and 40% less likely to use food stamps.

What’s next?

The main problem with even the most generous paid parental leave is that benefits cater to white collar professionals. It’s why, for example, Microsoft garnered attention throughout the tech world for its policy of requiring American contractors and suppliers to offer 12 weeks of paid parental leave – that means Microsoft’s US corporate benefit is extended to manual laborers.

President Donald Trump included a proposal for six weeks of paid leave in his 2018 budget, but so far there’s been no progress. As for now, governors across the country, like Gov. Newsom in California, will continue to find ways to make their own policies, the same way America’s biggest companies are.

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