Should You Offer Paid Leave for Hourly Workers?

Paid leave for hourly workers

More and more companies are offering paid leave for hourly workers. Should yours offer it, too?

According to the Pew Research Center, a majority of Americans are in favor of paid leave following the birth or adoption of a child, with 82 percent saying mothers should receive this benefit and 69 percent saying fathers should, too.

While benefits like these aren't uncommon among salaried workers, providing paid leave for hourly workers is something of a different question — and one the New York Times reports is being raised increasingly often.

Should your business make these offerings available to hourly workers? Here's what you need to know.

Recent Trends

The issue of paid child care has attracted more attention of late as the percentage of homes with children under the age of 1 and both parents working has steadily risen. While 20 percent of infants lived in a home where both parents worked in 1976, by 1986 that figure had jumped to 39 percent, according to Pew. In 2016, 50 percent of infants lived in homes where both parents worked.

At the same time, perhaps surprisingly, alongside rising percentages of families with two working parents, the workforce participation rate has declined, as the New York Times notes. Employers are finding it more challenging to attract and retain solid workers, especially at the hourly level. Providing paid leave for salaried and hourly workers makes such organizations more attractive as employers, potentially providing a competitive advantage.

Hourly workers, who generally have the greatest need for a steady income, have also been the segment of workers least likely to have access to paid leave. But according to the New York Times, recent announcements that Walmart and Starbucks now offer paid leave for hourly workers suggest that the situation may be changing.

Some companies have long offered the same paid leave for hourly workers and salaried employees, while others are starting to. IBM gives 20 weeks paid leave to the birth mother and 12 to the other parent. Amazon gives 14 weeks and 6 weeks, respectively. PepsiCo offers 10 weeks and 4 weeks.

Walmart is offering 16 weeks and 6 weeks, available across both worker classifications. Starbucks, on the other hand, offers paid leave to hourly workers, but not as much as it does for salaried staff. Salaried workers receive 18 and 12 weeks, respectively, while hourly workers will now receive 6 weeks.

Offering Paid Leave

So is paid family leave a benefit you should consider offering to your employees? As of January 1, 2018, if your business is based in California, New York, New Jersey or Rhode Island, you don't have a choice, as Consumer Reports notes. Workers in those states can take leave that's paid for by an insurance program funded through a special tax on companies and employees. Washington state and Washington, D.C., will see similar laws go into effect in 2020.

But beyond the legalities, is paid family leave a benefit your business should make available?

Some small businesses simply can't afford to offer 100 percent pay for multiple weeks, while others view paid leave as imperative — something parents need to receive.

Nearly all parents would like the opportunity to stay home with their new children, and the ability to do so is likely to help increase employee satisfaction and retention. Workers who don't have to divide their attention between work and family priorities will likely be more efficient and productive on the job, too.

In the end, the cost savings from lower turnover and higher productivity thanks to paid leave may end up covering some of the expense.