A Guide for Corporate Leaders on Paid Leave Policies

A paid leave policy benchmarking toolkit that connects corporate performance with evidence-based leading practice to help companies inform investment decisions in worker well-being

67% of Americans say they want the companies that they purchase goods and services from to take care of their employees and treat them well.

Paid sick days reduce the share of employees who report to work while sick, and after enacting a paid sick days law, jurisdictions saw an average 1.9% increase in employment.

Businesses report that offering paid leave improves the ability to attract talent (58%), retention (55%), employee health and wellness (61%), and employee engagement (60%).

80% of companies that offer paid family leave reported an increase in employee morale, and more than 70% reported an increase in employee productivity.

Implementing paid leave has been found to increase revenue by 4.6% and profit by 6.8% per full-time equivalent employee.

State paid sick leave laws reduced rates of infection with the flu and similar illnesses by about 11% in the first year of introduction.

Two-thirds (65%) of working parents would stay at their job if their employer offered subsidized child care, and more than 7 in 10 are now contemplating adapting their careers to be able to care for their children.

Amy Cappellanti-Wolf 

Chief People Officer

Dayforce

Offering paid leave to employees isn't just a gesture of goodwill. It's a strategic investment that can yield significant returns for businesses. In today's competitive labor market, attracting and retaining top talent requires more than just competitive salaries. According to a JUST Capital survey, providing comprehensive benefits that include PTO is among the top two priorities for nearly half (47%) of the respondents when asked what companies should do to compete for workers in a tight labor market. Paid leave policies can serve as a crucial differentiator, enhancing employee satisfaction, productivity, and overall well-being. By providing employees with the flexibility to better manage their personal and professional lives, companies can foster a happier, healthier, and more committed workforce. Moreover, paid leave can contribute to reducing turnover costs, improving morale, and establishing the company as an employer of choice for job seekers and stakeholders alike. From a business perspective, it is abundantly clear that implementing robust paid leave policies is a strategic imperative for long-term success and workplace sustainability.

Workers today are increasingly advocating for paid leave policies from their employers, citing several key factors. First, while companies may find it challenging to prioritize benefits amidst competing demands, paid leave policies are gaining traction as a crucial aspect of employee well-being. In the wake of the COVID-19 pandemic, workplaces have undergone significant transformations, with remote work becoming more prevalent and the boundaries between professional and personal life blurring. As a result, employees are seeking paid leave not only for traditional reasons such as illness or vacation but also to manage the demands of caregiving and mental health. Moreover, with generational shifts in the workforce and a rapidly aging population, more employees find themselves in the “sandwich generation,” balancing care for children, grandchildren, and/or parents simultaneously. This underscores the need for comprehensive benefits to support employees' family responsibilities.

Vicki Shabo

Senior Fellow for Gender Equity, Paid Leave, and Care Policy and Strategy

Better Life Lab at New America

By offering paid leave, companies can significantly enhance the physical and mental health of their workforce, leading to improved overall productivity. Moreover, these policies play a crucial role in promoting better family health outcomes by enabling employees to prioritize caregiving responsibilities without sacrificing their financial stability. Additionally, paid leave serves as a vital tool in reducing financial instability among employees, providing them with the necessary support during times of illness, caregiving, or personal emergencies. Furthermore, by implementing equitable paid leave policies, organizations can more actively address racial and gender inequities within their workforce, fostering a more inclusive and diverse environment where all employees have better access to support and opportunities for growth.

After Norway replaced its 12-week unpaid leave policy with 16 weeks of paid leave, many facets of new mothers’ health improved, including blood pressure, pain levels, and exercise and smoking behaviors.

Paid leave is associated with lower infant mortality rates and higher rates of vaccination, especially for families below the poverty line. 

Workers and their families lose $22.5 billion in wages each year due to a lack of paid family and medical leave.

47% of White parents, 41% of Black parents, and just 23% of Hispanic parents have access to paid leave.

Matt Bahl

Vice President and Market Lead, Workplace

Financial Health Network

Paid parental leave disclosure across the Russell 1000 reveals that approximately 50% of companies opt not to disclose any data on the length of their paid parental leave. This lack of transparency suggests that millions of workers may not have access to paid parental leave benefits. Moreover, the data highlights disparities in leave allocation between primary and secondary caregivers, the latter of which is seen as paternity leave in many circumstances. While primary caregivers typically receive an average of approximately 11 weeks of paid leave, secondary caregivers are offered significantly less, averaging around eight weeks. However, research indicates that both primary and secondary caregivers should receive equal time off to bond with and care for their child. Similarly, a JUST Capital survey revealed that a majority of Americans (64%) believe it is necessary for companies to provide all workers a minimum of 12 weeks of paid parental leave, which highlights the need for greater transparency and equity in parental leave policies across the Russell 1000.

Paid parental leave refers to a policy whereby employees are granted compensated time off following the birth, adoption, or foster of a child. This benefit is designed to support employees in balancing their professional responsibilities with the demands of parenthood, fostering a conducive environment for employee well-being. Paid parental leave typically encompasses a specified period of leave during which employees receive their regular salary, allowing them to prioritize family commitments, and recovery from labor and delivery where applicable, without experiencing financial strain.

Read more about how the following data on paid parental leave is collected here.

Across Industry Classification Benchmark (ICB) industries, there are significant variations in leave offerings for both primary and secondary caregivers. Industries such as technology, telecommunications, and financials lead the pack with the longest average paid parental leave durations. Notably, the technology industry stands out for offering the longest paid parental leave, averaging nearly 15 weeks for primary caregivers and 12 weeks for secondary caregivers. Conversely, energy, industrials, and utilities tend to provide less leave on average to their workforce. Most other industries fall within a week or so of each other on both primary and secondary leave – approximately 10 weeks on average for primary caregivers and around eight weeks for secondary caregivers. 

Paid parental leave parity across the Russell 1000 corporations reflects room for growth against the leading practice. Almost 70% of companies either don't disclose or fail to offer parental leave parity, which indicates a significant gap for parents in the workforce and could negatively affect racial and gender equity practices within companies. For companies that do offer parity, the duration typically falls between six and 12 weeks, which falls short of the unpaid FMLA leave. In fact, half of all companies offering equal leave for all caregivers offer below eight weeks, with six weeks of paid parental leave being the most common offering among Russell 1000 companies. Only a small fraction (12%) of companies offer parental leave parity at 12 weeks or more, indicating a relatively low adoption rate across companies.

Looking at parental leave parity across industries within the Russell 1000 reveals intriguing trends that shed light on the varying degrees of support for new parents. Among technology and utilities companies that disclose the length of their paid parental leave policies, parity in leave is more common than among companies in other industries with similar disclosures. Interestingly, despite telecommunications boasting the second highest parental leave length at parity — approximately 11 weeks on average — only one third of companies that disclose the length of their parental leave within that industry offer parity, highlighting a significant gap between policy availability and equality. The technology industry leads in providing the longest parental leave parity, averaging 14 weeks. By contrast, utilities and the energy sector offer approximately six weeks on average, while other industries hover between seven and 9.5 weeks.

Paid parental leave parity refers to the principle of ensuring equitable and consistent benefits for all employees regardless of gender or family structure. It entails providing the same duration and compensation for parental leave to both mothers and fathers, as well as to adoptive, foster, and non-birthing parents and their partners. Achieving paid parental leave parity demonstrates a commitment to gender equality, diversity, and inclusion within the workplace by acknowledging and accommodating the evolving roles and responsibilities of modern families. By eliminating disparities in parental leave policies, corporations foster a culture of fairness, support, and equal opportunity, ultimately enhancing employee satisfaction, engagement, and retention.

Read more about how the following data on paid parental leave parity is collected here.

Corporate policies on paid parental leave parity have undergone notable shifts in recent years, reflecting evolving attitudes toward gender equality and family support within the workforce. There has been a significant increase in disclosure and offering of paid parental leave policies year over year, steadily rising from 12% in 2020 to over 30% in 2023. This surge in disclosure could be attributed to various global events and environmental factors, including the COVID-19 pandemic, which magnified caregiving challenges and heightened awareness of the lack of paid parental leave in the U.S., particularly during the Biden administration's push for a national leave policy in 2021 and renewed commitments in 2023. Despite the rise in disclosure, the average weeks of paid parental leave at parity have remained relatively stagnant, hovering around nine weeks, indicating a need for further progress toward the evidence-based best practice of six months.

Though family and medical leave is covered for some workers under the Family and Medical Leave Act (FMLA), the program provides eligible employees with up to 12 weeks of unpaid leave per year. Only 56% of American workers are eligible for FMLA, and low-wage earners are even less likely to be eligible – only 38% of workers earning less than $15 per hour meet the eligibility requirements compared to 63% of workers earning more than $15. 

While JUST Capital regularly collects data on paid parental leave, we do not yet collect regular data on broader paid family and medical leave policies. Our exploratory research on this metric on the 100 largest Russell 1000 companies indicates that 53% of companies disclose offering paid family and/or paid medical leave. Some 11% of companies disclose only paid family leave, which covers circumstances like family emergencies, major life events, and caregiving responsibilities, and 37% disclose only paid medical leave. Common themes emerge from these disclosures. For example, paid medical leave often includes coverage for short or long-term disability care/insurance. That coverage tends to transition from fully paid disability leave to partial pay over time. In general, short-term disability paid leave coverage is more prevalent than long-term coverage. For companies offering paid family leave, common lengths include one or two weeks, signaling an emerging standard in these offerings.

Paid family and medical leave refers to a comprehensive benefit provided by corporations that enables employees to take time off from work for various family and medical reasons while receiving compensation. This inclusive policy typically covers a range of circumstances, including caring for a newborn or newly adopted child, supporting a family member with a serious health condition, or attending to one's own medical needs. Paid family and medical leave offers employees financial support during times of personal or familial crisis, allowing them to prioritize their well-being and family obligations without sacrificing their livelihood. The following section primarily addresses paid family and medical leave beyond parental leave, which is often a separate policy.

 
Read more about how the following data on family and medical leave is collected here. Note that this data reflects exploratory data collection for the 100 largest companies by U.S. employment size.

Paid time off (PTO) encompasses a designated allotment of time during which employees are compensated for absences from work. This inclusive policy combines vacation days and personal days into a single bank of time that employees can use at their discretion for various purposes, including rest, relaxation, personal obligations, or unforeseen circumstances. PTO provides employees with flexibility and autonomy in managing their work-life balance while ensuring that they receive compensation for time away from work. 

Read more about how the following data on paid time off is collected here.

PTO policies across the Russell 1000 exhibit broader adoption, with the overwhelming majority of companies (88%) disclosing that they offer some PTO. However, when it comes to transparency around what the offering entails, the numbers drop significantly. Just over 28% of companies disclose the amount of PTO days that are available to their employees. Compared to paid time off offered under other policies, including paid sick leave, companies tend to be more generous with PTO. The most common company offering is a policy with between 15 and 19 days of time off annually. The second most common offering is unlimited PTO; nearly 7% of companies embrace the concept of providing employees with flexibility in managing their work-life balance. While there's no specific consensus on the recommended number of days, nearly every company that discloses its PTO policy offers more days than what is indicated by Bureau of Labor Statistics data for private sector workers, which suggests that the bureau’s guidelines lag emerging consensus among company leaders about what workers need.

Across industries, the Russell 1000 companies reporting on the number of PTO days most commonly offer between 15 and 19 days annually. But while this amount of PTO appears to be a common offering, the length of PTO even within a single industry varies substantially. In industries like consumer staples and financials, companies’ policies range from providing between one and nine days of annual PTO to offering unlimited PTO. Longer lengths of paid leave are more commonly found in certain industries, like technology and telecommunications, both of which have a relatively high percentage of companies with unlimited leave policies. 

Unlimited PTO continues to be an emerging practice across the Russell 1000. Unlimited PTO offers unparalleled flexibility for scheduling vacations or time off, making it a significant asset for recruitment efforts. In organizations with unlimited PTO policies, fostering a supportive culture where managers encourage and facilitate leave-taking is crucial. Employees should have a clear understanding of what is considered appropriate within the company's culture regarding time off. Additionally, it's important to note that unlike traditional policies, unlimited PTO often does not include payouts for unused accrued days upon leaving a position.

JUST Capital’s latest data, featured in the 2024 Rankings of America’s Most JUST Companies, shows that 64 companies (or 7%) among the Russell 1000 offer an unlimited PTO policy, a 58% increase since 2020. While most employers continue to offer fixed-allocation PTO, there is evidence to suggest that employees are interested in receiving access to unlimited PTO. A 2019 MetLife survey found that such policies tend to be among the emerging benefits that interest employees the most, with 72% of participants expressing interest in an unlimited PTO policy. Employers with these programs may be more competitive in attracting potential employees by offering a valued time-off benefit that promotes trust and flexibility in the workplace. 

Paid sick leave is a workplace policy that provides employees with compensation for time off due to personal illness, injury, or medical appointments. Paid sick leave policies ensure that employees can prioritize their health without worrying about loss of income. By offering paid sick leave, corporations demonstrate their commitment to employee well-being, workplace productivity, and public health. This policy not only supports individual employees in maintaining their health and productivity but also contributes to a healthier and more resilient workforce overall.

Read more about how the following data on paid sick leave is collected here.

Paid sick leave performance across the Russell 1000 varies considerably, with only 11.5% of companies disclosing an explicit paid leave policy — one that’s separate from a general pool of PTO. Among those that do, the majority tend to offer between five and nine days of paid sick leave annually, closely followed by companies that offer 10 days or more. Interestingly, the most frequently occurring practice is providing 10 days of annual paid sick leave, which aligns with many state and federal policies. Notably, about 1% of companies stand out by offering unlimited PTO specifically for sick leave, reflecting a more progressive approach to employee well-being and flexibility. Overall, while there is a range of practices, the prevalence of policies offering around 10 days of paid sick leave suggests a common standard emerging across industries within the Russell 1000.

Across industries, companies are employing a range of paid sick leave policies, as indicated in this graph. Notably, five out of 11 ICB industries stand out for offering unlimited leave, with the consumer discretionary industry leading in the highest percentage of companies explicitly providing this benefit. Companies within every industry offer five to nine days of paid sick leave each year. Interestingly, the technology industry emerges as a frontrunner in this category, with most companies that provide paid sick leave data offering between five and nine days. 

Dependent care policies are a vital benefit for empowering employees of all backgrounds to thrive professionally while caring for their loved ones. Though dependent care policies take a variety of forms, some of the most commonly offered policies include backup dependent care and subsidized routine dependent care. Backup dependent care is a specialized employee benefit provided by corporations to support employees when their regular child care or eldercare arrangements are unexpectedly unavailable. Backup dependent care programs may include access to emergency childcare centers, in-home care services, reimbursement for temporary care arrangements, or additional time off. Subsidized dependent care refers to financial assistance or incentives to employees to help cover the costs of routine childcare or eldercare services. This assistance may come in the form of direct subsidies, vouchers, or reimbursement for qualified dependent care expenses. Subsidized dependent care initiatives aim to alleviate the financial burden associated with childcare or eldercare, enabling employees to access high-quality care for their dependents while balancing their work commitments.

Read more about how the following data on backup dependent care is collected here and how subsidized dependent care is collected here.

Dependent care benefits are increasingly recognized as vital resources for working families responsible for children or elderly relatives. JUST Capital polling found that more than one-third (36%) of Americans say that either they have, or they know someone who has, left a job or switched to part-time work in order to provide childcare for their families. Policies like emergency backup care offer reassurance to employees navigating unforeseen childcare or eldercare challenges. Subsidized routine dependent care policies alleviate financial strain, allowing employees to access quality childcare or eldercare services at an affordable cost. When companies integrate these offerings alongside living wages, paid parental leave, and time-off policies, they cultivate a supportive environment for the more than 40% of employed Americans with dependents.

JUST Capital’s 2023 Americans’ Views on Business Survey found that while the overwhelming majority (86%) of Americans find investing in expanded child care benefits important, only 37% agree that companies are doing well – a 49 percentage point divide. Our data shows that just under one-third of Russell 1000 companies (32%) offer some form of dependent care policy, with 10% of companies offering both subsidized routine dependent care and emergency backup dependent care. Among the companies providing one type of dependent care support, backup care policies tend to be more common.

After layering paid parental leave, the share of companies offering these care benefits sees a small drop, with 29% of Russell 1000 companies offering some dependent care policy in combination with paid parental leave. Providing care benefits alongside paid parental leave ensures comprehensive support for employees, addressing both immediate dependent care needs and long-term family well-being.

JUST Capital

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Dayforce

Our purpose is to make work life better – for our customers, their employees, and our own teams at Dayforce. It’s the reason we come to work every day. It’s the “why” for all of us at Dayforce. We bring this to life through our commitment to help organizations around the world operate with confidence, realize their workforce potential, and unlock more value.

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