This CEO is on a mission to fix paid parental leave policies

When new parents bring a baby into their family, it can be a transformative time filled with new challenges and adjustments. But what they shouldn't have to think about is how much time they can afford to take off before returning to work. 

Yet for the majority of working parents, this is a top concern, and one they're often on their own to figure out. The U.S. does not have a federal family leave policy, leaving employees to cobble together their time off using a workplace policy, disability time, or state leave programs. This combination typically pays only a percentage of a worker's total income. While UNICEF recommends new parents are given 24 weeks of time off after birth, or around six months, the average new mother takes just 29 days. 

"It's a very complicated landscape — it's a mess of regulations, making it difficult for people to apply [for paid leave]," says Dirk Doebler, founder and CEO of Parento, a paid family leave insurance provider. "It's also just too large of a pay cut for the vast majority of people. If they don't have sufficient income, they have to go back to work too soon, which obviously undermines a lot of the benefits of parental leave in the first place." 

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This stress can impact every area of a new parent's life, from their financial wellness, to their mental and physical health. That doesn't end once an employee goes back to work: Finding affordable child care is often such an insurmountable hurdle; it pushes people out of the workforce altogether, deepening their financial stress. 

"These policies ultimately force people out of the workforce, or to take a step back from work, forcing these families into worse financial situations," Doebler says. "It has significant societal harms and harms the employee directly." 

At Parento, Doebler and his team work with organizations to implement paid leave programs that have a high ROI for both employees and a business's bottom line. An ideal policy should be a minimum of 10 weeks, though Parento pushes for 12 weeks. Leave should also be gender-neutral, and allow for parents to use their time intermittently. Making leave accessible before birth also has positive impacts on health outcomes. 

"We want to reduce stress: Our policies are gender neutral by default, and we also tell companies to offer leave intermittently, because you never know what the situation is for the partner at home," he says. "Helping people with flexibility based on their household needs is critical." 

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To mitigate the financial stress many new parents grapple with, Parento encourages employers to cover an employee's salary up to 75%, rather than the 60% offered through state leave programs. While their ultimate recommendation would be 100% paid time off, a partial salary at this rate can be a workable balance for an employer's budget, and an employee's financial picture. 

"Seventy-five percent is a good balance between what employees need and can actually afford to take home, versus what companies' budgets might dictate," he says. "But we always recommend full pay so you're not undermining the purpose of the leave." 

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Doebler says employers are often receptive to offering these policies, but get hung up on the cost of implementing a fully-paid leave policy that spans months at a time. A cultural shift is needed to get more employers on board. This is fortunately well-underway, Doebler says. 

"When we have those conversations with companies, people quickly become internal champions because they see the value and importance of what we're doing," he says. "You're going to have an employee who's gone for three months, and there will not be much of a business impact while they're out. It will be hugely beneficial when they come back."