San Francisco is now the first city in the U.S. to offer fully paid parental leave to new parents. The debate over fully paid parental leave has gained momentum in a similar manner the issue of minimum wage hike did across the country. This move for paid leave will offer new fathers and mothers to spend time with their newborn or newly adopted child.
Under this new mandate, all new-parent Californian workers are eligible for fully paid time off for six weeks. The employees in California are already entitled to receive 55% of wage for up to 6 weeks. This policy receives its coverage from public disability insurance. The burden of rest 45% is covered by employers.
The advocates for this issue suggest the measure is necessary because there are parents who cannot afford to lose paychecks to take time off following an adoption or birth. Few government entities and big league corporations already offer such employee benefits. But for startups and smaller businesses, this issue emerges out as yet another costly mandate, which they surely cannot afford. The move consists of various implications for the startups in the city, a majority of which offer generous policies to employees already. Smaller businesses are going to get a tough time due to the implementation of this policy. They certainly cannot carry the costs on their shoulders.
Paid Parental Leave Policy
Director of Human Capital Services at TriNet, Jackie Breslin says the mandate will have mixed influence on Californian startups. According to her, it will differ from the influence of this policy on smaller businesses in California. Her company handles payroll, human resource, et al for a number of startups in California among 12,000 clients of TriNet. She says the startups in San Francisco should introduce formal policies for parental leave even if they have been providing policies for unlimited time off already.
“There will be clients and companies that need to change their policies. I think that even clients that are doing something for parental leave will have to increase something.”
Startups in California, which do not have provisions covering the policy of paid parental time off, may have to outsource resources from other employee benefits for this mandate.
“That will be a true budgetary impact.” She notes.
For instance, in some companies, fully paid parental leave could mean cutting off perks like massages and free lunches or providing a lower amount of reimbursement for education. For a number of startups in San Francisco, especially bigger and well-established ones, the impact of this policy will be minimal. This is because they already provide similar policies to their employees.
Recently, Twitter CEO Jack Dorsey announced fully paid parental leave policy of 20 weeks for his employees. Multinational giants such as Netflix, eBay, and Facebook, though not headquartered in San Francisco city, offer generous policies for parental leave to their employees.
Outside the universe of venture-backed, well-established startups, this decision welcomed by the Board of Supervisors of San Francisco city carries heavy controversy.
Dee Dee Workman, Vice President of Public Policy at San Francisco Chamber of Commerce supported the arguments offered by small business owners.
He said, “They don’t necessarily have the resources, they can’t absorb the increases in cost, and they feel like it’s kind of relentless, it is one thing after the next.“