Tech Companies Offer Great Perks, Just Not For Everyone

Courtesy of Netflix.
When Netflix announced a generous new paid parental-leave policy for its employees last week, featuring up to a year of paid time off, it was lauded by many. Unfortunately, the policy leaves out a segment of the company's workforce.

The new policy does not apply to Netflix employees who work in the DVD distribution centers around the country. “[The DVD team] is run as a separate operation with separately reported financial results,” company spokesperson Marlee Tart said in an e-mail.

The recent cascade of announcements from the tech sector about enhanced parental leave policies — from Netflix to Facebook (17 weeks paid for all parents) to Google (18 weeks for birth mothers) to Microsoft (12 paid weeks for all parents and 20 for birth mothers) — seems to indicate a cultural shift when it comes to the notoriously stingy state of parental leave policies here in the U.S. But, while Silicon Valley is boosting benefits for tech talent, its low-wage workers, even some within these same companies, aren’t seeing the same treatment. Microsoft’s retail store employees, like Netflix’s DVD team, don’t qualify for the new parental leave benefits either. Adobe is an outlier among these tech companies. On Monday, it announced changes to its maternity leave policy, expanding it to up to 26 weeks for all full-time employees, including hourly workers, a spokeswoman for the company confirmed via email.

From a bird’s eye view, it's not too surprising so few companies are offering such benefits. Just 12% of American private sector workers have access to paid family leave at all, which makes having a child in this country a serious financial burden.
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Just 12% of American private sector workers have access to paid family leave at all.

“Having a baby today is one of the leading causes of poverty in our country,” says Kristin Rowe-Finkbeiner, executive director and CEO of MomsRising, a national advocacy organization for family economic security. “Most people think they have access to paid family leave, and when they find out they don’t, it’s a rude awakening.”

In fact, the only U.S. law covering parental leave is the Family and Medical Leave Act (FMLA) which guarantees up to 12 weeks of unpaid, job-protected leave for full-time workers at large companies. FMLA covers less than 60% of the American workforce. The U.S. is one of only three countries in the world — and the only developed nation — to have no guaranteed paid maternity leave.

So, why do some companies see paid parental leave as a valuable investment, and others don’t? “Certainly the attraction and retention needs of a large retailer are different from a technology-based firm competing for limited and highly-skilled talent,” says Jim Hoff, senior partner at Aon Hewitt, a firm that consults with large companies on benefit practices.

Take Wal-Mart. The largest private employer in the country offers paid parental leave, but only to its salaried employees, according to company spokesperson Randy Hargrove. “We provide 90 days paid maternity leave if you’re eligible to receive benefits,” Hargrove says. The company also offers 14 days paid leave for fathers and adoptive or foster parents. When asked about parental leave benefits for hourly employees, Hargrove said they could use FMLA. Of the nearly 1.4 million Wal-Mart employees, at least 600,000 are hourly workers. Which means more than 40% of the workforce may have benefitted from recent hourly wage increases, but they aren’t eligible to be paid if they need to take time off when having a child.
Courtesy of Wal-Mart.
Target, another of the country’s biggest employers, does not comment publicly on its parental leave policies, according to a company spokesperson. Anonymous employee comments on the website Glassdoor suggest that, like at Wal-Mart, Target's hourly employees are only eligible for unpaid leave in accordance with FMLA, while salaried employees may be eligible for between six and 12 weeks of paid leave. It’s unclear from Target’s annual report what percentage of the company’s 347,000 employees are salaried and therefore eligible for parental leave benefits.

Target is not alone in treating the subject as taboo. Wholesale retailer Costco, which has a reputation for generous benefits, had no comment on its parental leave policies when we reached out this week. And Starbucks, which refers to even part-time employees as “partners” and trumpets perks such as education reimbursement, doesn’t mention parental leave policies anywhere on its website and did not respond to our request for comment.

Hoff says that large retailers still might change their ways. “[C]ompanies of all sizes and in all industries are constantly evaluating how they might evolve their benefits and programs,” he says. And lately, leave policies are more often described as good for businesses’ bottom lines. “It’s a good retention tool, and there is evidence that paid parental leave increases the chances that mothers (or fathers) will return to work later,” Hoff adds.

Just don’t expect the low-wage retail sector to change as quickly as the tech industry. “While I don't expect we’ll see an immediate push from large retail employers to make significant changes to their policies, I suspect they’ll continue to strategically consider smaller changes,” Hoff says.

To non-parents and the small slice of Americans who have always had access to paid parental leave, this benefit might seem like just another work “perk.” But consider this: The U.S. has one of the highest infant mortality rates in the developed world, and studies show that guaranteed maternity leave substantially lowers those rates.

The U.S. has one of the highest infant mortality rates in the developed world.

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“This policy would save dollars in our health care industry, not to mention lives,” says Rowe-Finkbeiner. MomsRising and other groups continue to press for legislative action on this issue, pointing to strong support of paid-leave legislation from both Democrats and Republicans. Meanwhile, three states — California, New Jersey, and Rhode Island — have passed some form of a paid family-leave law on their own.

California’s law, which pays new parents up to 55% of weekly wages for six weeks off of work through a state disability insurance program, isn’t nearly as generous as the policies being implemented by tech companies, but it’s a starting point.

“If we can ensure that more workers have job protection and have enough wage replacement to provide for their families, then we are more likely to see low-wage workers taking family leave and accessing paid-leave benefits,” says Mariko Yoshihara, the legislative counsel and policy director for the California Employment Lawyers Association (CELA).

And the more people who can take paid family leave, the better for all of us, says Rowe-Finkbeiner. “Studies show that when there’s access to paid family leave, moms are more likely to rejoin the labor force after they give birth and are less likely to need government entitlement programs. [This] saves taxpayers significant dollars and boosts our economy by giving families more income,” she says.

Editor's Note: We updated this story to include information on Adobe's new maternity leave policy, after the announcement was made on Monday, August 10.
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