Managing Employee Maternity and Paternity Leave in Your Small Business

By Jaimy Ford

3 min read

What would you do if an employee announced today that he or she is expecting a baby and will be taking leave in several months? Would you know the law as it pertains to your business? Would you panic? Would you be prepared to grant maternity or paternity leave?

It’s hard to imagine being without a key player on your team for any length of time. Plus, you may not think that you can afford to keep the employee on staff and hire a temporary worker to cover for the new parent during his or her leave. But life happens, and it’s important for any small-business owner who employs others to prepare for the inevitable.

Which Laws May Apply

Before you make any decisions as an employer, you need to fully understand the laws related to maternity and paternity leave. They include:

  • Family and Medical Leave Act Companies with more than 50 employees are required to provide women and men 12 workweeks of unpaid, job-protected leave for the birth and care of a child in its first year (or during the first year of the child’s placement by adoption or foster care into the employee’s home). FMLA also covers the continuation of group health insurance under the same terms and conditions as if the employee had not taken leave.
  • Pregnancy Discrimination Act — The law, which applies to companies with 15 or more employees, forbids discrimination based on pregnancy in the workplace, including hiring, firing, pay, job assignments, promotions, layoff, training, benefits, such as leave and health insurance, and any other term or condition of employment. In addition, employers must allow pregnant workers to perform their jobs for as long as they are able. If a pregnant employee goes out on leave for a maternity-related condition, her employer may not require her to stay off the job (and unpaid) until her child is born, nor may the employer prevent her from returning to work for a set period of time after childbirth.
  • Americans With Disabilities Act — The act prohibits discrimination against people in the workplace because they’re disabled. The ADA, which applies to businesses with 15 or more workers, defines a disability “as a physical or mental impairment that substantially limits a major life activity.” Normal pregnancies aren’t protected by the law, but pregnancies with complications may meet the definition of a disability.
  • State laws — Laws vary from state to state. To find out which ones applies in your state, review this table published by the National Conference of State Legislatures.

Now, if you are sighing with relief because those laws don’t apply to your small business (many employers are exempt), think about the non-legal implications of failing to offer maternity or paternity leave to your staff.

Two of your priorities should be to retain talent and to preserve the investment you’ve put into recruiting, hiring, and training employees. Granting maternity or paternity leave to staff allows you to do both. Supporting staffers and offering then work-life balance are two keys to building loyalty.

What’s more, the U.S. Small Business Administration reports that abuse of such policies is much lower than expected, and 90 percent of workers return to their jobs after taking leave. So, don’t risk losing valuable staff. If possible, figure out a way to offer hard-working employees leave.

How to Handle an Employee’s Leave

Follow these steps to effectively manage an employee’s maternity or paternity leave.

  • Create a policy. Decide whether you want to create a one-size-fits-all policy or create a customized plan for each employee. If you choose to create a standard policy, draft it and provide a copy to staff members. In the policy, tell employees what procedures they need to follow and how to claim any benefits.
  • Plan for the leave. Discuss with the employee how you’ll cover his or her workload. Plan tasks that he or she can do ahead of time and those that someone else will need to tackle. You also may need to reprioritize projects so that the employee can finish key assignments before his or her leave.
  • Be flexible. It’s hard to find work-life balance as a new parent. Allowing a mother or father to return part-time initially or to work from home are often great options and may allow employees to get back to work in some capacity much sooner than otherwise.

One final tip: When you hear the news that someone on your staff is about to become a parent, congratulate the employee with genuine enthusiasm. If you start to panic or rush to discuss work-related logistics, you could upset the person. Employees who feel supported are more likely to work their hardest before and after the baby arrives.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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