In lieu of national paid leave policies for American workers, employers are often the primary decider of how much paid time off their employees get, leaving no guarantee that
And yet, it seems a majority of employers want to
"There's been heightened visibility around leave since the COVID-19 pandemic turned the world upside down," says Alex Henry, group benefits leader at WTW. "Over 50% of employers are looking to make a moderate or extensive change, which means they're doing more than just checking the compliance box for city or state laws."
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Henry points to employee attraction and retention being at the center of these changes, with employers feeling insecure about whether they can hire and keep the best talent. According to WTW, only 20% of employers felt they could out-compete other businesses in their industry, and talent is key to a company getting ahead, underlines Henry.
As a result, one-fifth of companies that provide parental leave plan on increasing the length of their programs. Twenty-five percent of those who offer bereavement leave plan to expand their program, with a majority focusing on increasing duration and what reasons are deemed valid for coverage. Paid caregiver leave is gaining popularity, with 25% of companies currently having a policy in place, and another 22% planning to offer it in the next two years. If this trend sticks, nearly half of employers will soon offer a caregiver leave policy. Notably, the famed federal paid family and medical leave law — which would give caregivers leave to take care of loved ones — has not gotten past Congress and was cut from Biden's Build Back Better Act last year.
"This is a benefit that used to be almost exclusive to the tech industry, professional service firms and maybe some finance firms," says Henry. "Now we're seeing a lot more penetration of caregiver leave, which goes beyond caring for a newborn child during parental leave."
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General PTO policies are due for some changes as well: 16% of employers plan on offering unlimited PTO to employees who are exempt from overtime laws, mainly those in the executive, administrative and professional spaces. Another 23% of employers plan on upping the number of days off provided.
While Henry reiterates that compliance isn't the number one driver of these changes, the data points to employers finding it harder to remain compliant with state and city requirements, especially if their workforce is primarily remote. Over 20% of employers plan on outsourcing the management of leave programs, and 54% of employers plan on hiring a new administrator in the next two years.
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This frustration isn't likely to dissipate anytime soon. For example, if an employer has workers in California, they will have to be compliant with the state's paid sick leave policy which offers five days of leave. If the same employer has workers in New York, they must also ensure those employees receive up to 12 weeks of paid leave at 67% of their average weekly wage. Henry emphasizes that it's likely easier to have a leave policy that expands past these laws.
Henry is confident employers are ready to build more attractive, inclusive leave policies rather than continuing to revise their policies each time a new law enters the picture. And that's likely the smartest strategy in the long run.
"That's what really stood out to me: this isn't just about checking a box, but about exceeding competition," says Henry. "If employers aren't looking at the programs holistically as they look to attract and retain talent, they're going to be left behind."
