How to plan for children if you don’t get paid parental leave benefits

Having ramped up paid parental leave during the pandemic, many companies are now cutting or slashing popular employee benefits.

In 2022, the proportion of organizations using paid maternity leave fell to 35% from 53% in 2020, according to the Society for Human Resource Management’s Employee Benefits Survey. And less than a third, 27%, now offer paid paternity leave, up from 44% in 2020.

“Many of these firms are now trying to return to pre-pandemic norms,” ​​said Michelle Long, policy analyst at the nonprofit Kaiser Family Foundation.

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During the pandemic, many companies have expanded their offerings beyond what the law requires, but now “the wallets have tightened” as the economy has shifted, Long said.

There is currently no state paid leave program, and only 11 states and the District of Columbia offer the benefit, which the National Conference of State Legislatures says is typically funded by payroll taxes.

“This is a very, very expensive proposition, especially for small and medium-sized businesses,” said Johnny Taylor, Jr., president and CEO of the Society for Human Resource Management, explaining that some companies could pay wages to the furloughed employee while also providing replacements .

However, as the job market weakens, “the game is changing a bit,” he said, and companies are cutting their previously improved paid parental leave policies.

Whether you’re a current employee or considering job opportunities, it’s important to know the details of your company’s parental leave policy when planning to expand your family, Taylor said.

“Often there’s a temptation to take the highest-paying job without factoring in things like paid vacation time,” he said. If you’re interviewing, ask for an overview of the company’s full benefits package, he suggested.

While using vacation time for parental leave is another option, he urged prospective parents to weigh the pros and cons before using up the paid days off for the year.

“Raising a new baby isn’t a vacation,” Taylor said. “If you spend your whole vacation time doing this, you’re going to burn out.”

Intended parents might also consider coordinating benefits or taking separate paid vacations, suggested Nicole Sullivan, a certified financial planner and co-founder of Prism Planning Partners in Libertyville, Illinois.

“Fully understanding and coordinating all of the company’s benefits is another important help — things like flexible spending or accounts for dependent care and medical benefits,” she said.

“Many companies have open enrollment for benefits in November, so it’s a good time for parents and expectant parents to check,” Sullivan added.