Parental Leave in a Startup

How Parental Leave Works in a Startup

How to provide parental leave in a startup is a challenging question for many business owners. Some states have guidelines, but these mainly apply to large workforces. In most US States, startups with fewer than 50 employees are left to make up their parental leave policies.

Unfortunately, startups, and their employees, must recognize that they're not Facebook or Google and cannot afford to offer generous paid parental leave benefits, with endless time off.

As Roxanne Petraeus, CEO of Ethena, said while writing the company's "early-stage" parental leave policy, "The 'Take all the time you need,' 'We're family here' platitudes don't translate to the real world and kick the hard, honest conversations down the road. I'm all for unconditional love and support, but at work, pretending like we don't have constraints puts colleagues in a worse situation than just accepting upfront that we have to consider business needs too."

For startups, parental leave is a struggle between compassion and the harsh reality of the company's financial constraints. Hopefully, this article will offer some guidance for startups formulating their first parental leave policy.

What is a Parental Leave Policy?

A parental leave policy allows employees to take time off for a newborn or newly adopted child. The policy might also include ill family members and other personal challenges.

Traditionally, parental leave (maternity leave) was only given to female employees giving birth. Some companies offered time off for secondary caregivers (paternity leave), but this was usually no more than a week or two.

Companies now recognize that both parents, no matter their gender, need time off to recover and spend time with a new addition to the family.

How to Write a Parental Leave Policy for a Startup

Most startups overlook writing a parental leave policy until the first employee steps forward to announce they are expecting. But founders should be aware that parental leave takes a lot of time and consideration.

Here are some points to consider when writing a parental leave policy for a startup.

Be Inclusive

The first thing startups need to consider is that the "traditional" family unit no longer exists. Modern families include same-sex couples, single parents, adoption, and surrogates, to name a few examples.

Keep in mind that the primary caregiver might not be the birth mother, and therefore your parental policy should not discriminate against those whom a family designates that role.

Startups also need to consider that parental leave should also apply to employees with ill family members and spending valuable time with partners or children serving in the armed forces.

Paid & Unpaid Parental Leave

Startups should consider a combination of paid and unpaid leave. For example, your policy might include a certain amount of fully paid time off and unpaid time off with benefits.

Meaning, employees don't receive their salary during the unpaid time off, but they still get their full benefits package, including health insurance, to continue caring for their loved ones.

Leveraging State Policies

Startups should also consider how they can leverage State-sponsored programs to offer employees the best parental leave benefits while minimizing the financial burden.

For example, California has a Paid Family Leave policy so employees can claim 60 - 70% of their weekly paycheck for up to eight weeks. By leaning on State programs, startups can compete with larger organizations and offer more generous parental leave packages.

How Much Time is Enough?

The current trend for startups is approximately 12 weeks of fully-paid parental leave for primary caregivers. Some companies offer fewer weeks for secondary caregivers, while others use a blanket policy that allows the same time off for any caregiver.

Once employees complete their parental leave, startups might also want to allow parents to work from home. After 2020, many companies continue to allow employees to work from home, even in cities where restrictions no longer exist.

Startups should seriously consider allowing employees to work from home for as long as they need, especially if they live with an infant or ill child.

Delegating Responsibilities

Another reason startups must implement a parental leave policy as early as possible is to streamline the handover of responsibilities. It's one thing when an employee falls pregnant, and you have months to plan a handover, but what happens in more urgent situations, like illness or death in the family?

As part of a parental leave policy, startups must include how to provide seamless handovers with minimal downtime. It might be an idea for department heads to discuss and formulate handover procedures that make the most sense for their teams.

Startups also need to consider procedures for hiring temporary staff, keeping in mind that some positions might require different outsourcing or working with freelancers.

Connecting With Employees on Parental Leave

While it's best not to contact employees on leave, startups should consider a "check-in" procedure. Employee check-ins should not be used to inform them about the email they forgot to send or anything else they might have done wrong.

Connecting with employees on parental leave could be a weekly call from HR or team lead to keep them up-to-date and find out if they need guidance or support.

These check-ins are especially helpful shortly before an employee's return to ensure a seamless transition into their day-to-day responsibilities. Also, consider giving employees the option to opt-out of any contact while they're away.

Revising Parental Leave

A startup's parental leave policy should be reviewed and revised regularly. During parental leave revisions, decision-makers should ask the following questions:

• Is our parental leave policy in line with competitors?
• Does our policy discriminate?
• What feedback have you received from employees who have taken parental leave? Were there challenges they experienced that the company needs to address?
• Do handover procedures work efficiently? How can they be improved?
• Is there new State or Federal legislation the company needs to consider?
• How can we improve our parental leave policy to benefit both the company and its employees?

Final Considerations for Parental Leave in a Startup

Hopefully, this article has demonstrated that parental leave is not something that decision-makers should "kick down the road," as Roxanne Petraeus puts it.

Parental leave is a balancing act of what employees need vs. what the company can afford.

There is a lot of careful thought and planning to prepare a startup for the inevitable parental leave scenario. Parental leave is not about deciding how many weeks your company offers employees but how your startup survives when a vital team member is unavailable, often for months.