Increasing Access to Paid Family Leave: Challenges and Opportunities

Recent research highlights a growing paradox in the realm of paid family leave in the United States. While state programs designed to subsidize this benefit have increased access for workers, many individuals do not take advantage of it. This disengagement is often due to a combination of factors, including lack of awareness, financial concerns, and cultural expectations, according to a report released on February 26 by Moms First in collaboration with McKinsey.

The analysis focuses on three states with established paid family leave policies—New York, New Jersey, and California—where data indicated that only two out of five eligible parents utilized their allotted leave in 2022. The failure to claim these benefits resulted in parents potentially leaving between ,000 and ,000 in financial support unclaimed.

A notable finding from the survey conducted for the report reveals that approximately 60% of respondents unaware of their eligibility for paid leave cited a lack of awareness as the primary reason for not applying. Additionally, many feared repercussions on their career trajectories, with over two-thirds of those surveyed expressing concerns over job security, potential pay cuts, or career setbacks linked with taking family leave. These assessments are significant as the benefits provided by state programs typically do not cover full wages, further disincentivizing utilization.

Complicating matters, the intricate landscape of U.S. paid family leave law can be daunting for employees. Meg Shea, Vice President of Group Benefits Solutions at New York Life, points out that as states enact various regulations, understanding their implications can become increasingly challenging. Workers often face confusion surrounding how state benefits interact with short-term disability or employer-sponsored leave.

Moreover, the economic ramifications are pronounced for organizations. Dirk Doebler, founder and CEO of Parento, a company offering paid parental leave insurance, states that businesses adopting more generous leave policies are better positioned to attract and retain talent, particularly younger workers contemplating parenthood. He emphasizes the necessity of providing substantial wage replacement—ideally at least 75%—to mitigate concerns regarding financial stability during leave.

Cultural perceptions also play a crucial role in affecting employees’ decisions about taking leave. Many workers express anxiety over what their colleagues, bosses, or leadership might think of their absence. Men, in particular, are often less likely to take leave even when it’s available, driven by the ingrained notion that parenting responsibilities primarily fall to women.

The findings underscore an imperative for Human Resources (HR) leaders to become proactive advocates for employees. “Employers hold significant leverage in clarifying benefits and encouraging employees to utilize them,” said Nina Harstad, director at Moms First. She highlighted that over 70% of parents surveyed attributed their lack of knowledge about paid family leave to insufficient employer communication, even when these benefits are provided through state systems rather than company policies.

To address these issues, Harstad advocates for HR departments to enhance their understanding of applicable laws and the entitlements of employees regarding paid family leave. Furthermore, she emphasized the need for structures that promote ongoing education about available programs.

Empowering company leaders to take parental leave can also help dismantle the stigma surrounding this issue. Educating senior leadership about the benefits of time off and encouraging them to model this behavior can foster a work culture that values and normalizes paid family leave.

As paid family leave policies continue to evolve, there lies an opportunity for organizations to not only comply with regulations but to also cultivate a supportive environment that encourages utilization of these essential benefits. Addressing the barriers to uptake can lead to increased satisfaction and loyalty among employees, ultimately benefiting both the workforce and the broader economy.