Doing The Right Thing On Family Leave Can Be Hard For A Small Business

Last Week Tonight Family Leave

A few weeks ago, I watched the great report Last Week Tonight did about the sorry state of family leave for new parents in the United States. I found myself nodding along, thinking the situation should improve. Soon after, our own small business, Third Door Media, found itself having to create a family leave policy for the first time. I’m happy with what we did, but it’s a lesson about how difficult doing the right thing can be for small or even large businesses, when there’s no strong federal program or law.

As an introduction, I’d encourage everyone to watch the Last Week Tonight report:

In its failure to legally mandate paid time off, the US is matched only by Papua New Guinea. Yes, we are one of only two countries in the world that don’t provide paid time off for new mothers. It’s shocking.

Soon after the report, the issue of family leave came up for our company. Someone on staff is expecting. We didn’t have a policy in place, because we’ve never needed to have one before this. We wanted to get something in place, and we wanted one that would be generous to our employees.

The challenge for us is that our company is virtual. We have almost 50 people spread across nearly 20 states, each with a dizzying array of business regulations that can drive our VP of Finance Katie Gausepohl crazy trying to keep up with it all. Sidenote: there’s another entire post on how hard it is to be a virtual business when there are often inconsistencies across states.

The easy solution would be to do nothing. The US federal law mandating 12 weeks of unpaid leave doesn’t apply to us, as we’re under the 50 employees limit.

Doing nothing wasn’t an option for us. We wanted to do the right thing. Moreover, in California, any of our employees would automatically get the right thing, because they’re covered by the California Family Rights Act. Mother or father, they get 55% of pay for up to six weeks. Importantly, the company itself doesn’t pay for this. Employees do, through small contributions made from their paychecks into a common insurance fund.

If we did nothing, some of our California employees would get nice benefits while the rest of our company would get no family leave. Thus began more work to figure out a solution. By the way, a nice resource on all this is the Legal Aid Society-Employment Law Center page about family leave. It also has a good “Know Your Rights” worksheet (PDF). But even despite all its hard work, you’ll still see how figuring this out is difficult.

In the end, we decided that all our employees who are new parents, mother or father, would get 55% of their salary for up to six weeks. That matches what California does. If an employee isn’t in California, then our company will pay the benefit, rather than the state. We also pledged that if other states had different coverages, we’d match whatever was necessary to bring the compensation for employees up to the same level.

This was a harder option for our company to take. It’s a more expensive option, too, as our first employee who will claim under this policy isn’t in California, so our business will underwrite the cost. We’re a small company, but it was the right thing to do. Our people aren’t just employees; we’re all part of a greater Third Door Media family. Who wants a member of their family debating whether they can afford to spend time off with their newborn?

Apparently, there’s a renewed push to improve the federal law governing family leave. I think that’s great and would help the US catch up with the rest of the world. But I sure hope it addresses the inconsistencies across states. It’s great to talk about doing the right thing, but it shouldn’t be such a struggle for companies small and large to figure out how to do it.

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