Most employers aren’t touching paid leave, for now

In recent weeks employers including Zoom and Deloitte made headlines for reducing paid family leave benefits.

Offerings that were previously considered industry-leading appear less so with the changes. Certain Deloitte employees will see their paid family leave cut in half, from 16 weeks to eight weeks. Zoom reduced its leave from 22 weeks to 18 weeks for most birth mothers (though that’s still more generous than what the average US company offers).

“This is something that typically cycles as the labor market gets tighter,” Craig Copeland, director of wealth benefits research with the Employee Benefits Research Institute, said of recent rollbacks. “When employers are really having to compete for workers, they’re more likely to enhance benefits. When they don’t have to, they’re more likely to cut back on them.”

While US employers have been in “low-hire, low-fire” mode for months, the April jobs report showed hiring picked up more than expected last month, suggesting that the strategy Copeland described may not be as relevant for some companies. And the parental leave reductions don’t seem to reflect a wider trend—at least not yet.

Few employers plan to pull back on leave. Most employers plan to maintain their current levels of paid leave over the next year, according to a recent survey from the consulting firm Marsh McLennan Agency (MMA).

Some 86% of firms surveyed in January and February said they had no plans to increase or decrease vacation or paid time off over the next year, while 93% said the same of sick leave.

Part of the reasoning here may have to do with the growing prevalence of state-level laws that now mandate employers provide a certain amount of paid leave to their workers. More than a dozen states have enacted paid family and medical leave laws, while 18 states require private sector employers to give workers sick leave.

Given that many companies now employ workers across different jurisdictions, this evolving legal landscape “adds to the challenge of backing off on those benefits or removing those benefits,” Nicole Delimitros, MMA’s SVP of strategic partnerships & initiatives, said.

The companies that intend to keep current levels of leave in place may also be doing so to retain current employees, Delimitros added. Retention, she noted, was the top focus for HR professionals surveyed by MMA, with 50% reporting that they were prioritizing this, followed by engagement (46%) and leadership development (43%).

Retention may prove important not only for employees who are already growing their families, but also for younger workers who are planning to have children one day, Gord Frost, a global rewards solution leader with Mercer, said. “That’s a big milestone in your life, and you want to work for an employer that you think is going to support you.”

To that end, most employers are keeping in place not only paid time off, but also other family benefits like childcare and fertility or family-building support, the survey found.