Federal Workers To Get Paid Leave: What’s Next for Employers?

We’ve said it before and we’ll say it again, paid parental leave has gone mainstream. The Senate passed a $738 billion defense bill on Tuesday that includes a high-profile deal that grants federal employees 12 weeks of paid parental leave in exchange for creating Trump’s "Space Force." This significant benefit for federal workers continues a trend we have seen over the last few years – and may set a new standard for years to come.

Mercer’s 2018 Absence and Disability Management Survey, shows that in 2018 41% of surveyed employers offered paid parental leave, up from 25% as recently as 2015. Paid leave is becoming a vital workplace benefit, mostly because employees need and value it and employers see it as a means of attracting and retaining workers, especially in a tight labor market. This bill is likely to reinforce the decisions of employers who have begun the shift, and it will potentially provoke employers who have been reluctant to take action. 

While the paid parental leave benefit for federal employees is substantially similar to policies found in the private sector, it does include a provision that is fairly unique. The policy for federal employees includes a requirement that the employee taking the leave return to work at the end of their parental leave. If the employee does not return, the employee will be responsible for reimbursing the government for its share of medical benefit premiums paid during the employee’s paid leave. This requirement can be waived if the employee is unable to return to work for medical reasons. Private sector employers have been reticent to put teeth like this into their paid parental leave policies. Whether the federal government’s approach or something similar is replicated in private sector policies remains to be seen.

For more information on this topic, this blog post outlines where the market is moving in greater detail.

Rich Fuerstenberg
by Rich Fuerstenberg

Senior Partner, Health, Mercer

Rich Fuerstenberg is a Senior Partner and is a senior consultant in Mercer’s Life, Absence and Disability (LAD) national specialty practice. In addition, Rich is a member of Mercer’s Center for Health Innovation, focusing on innovation in ancillary benefits like life, disability, dental, vision and voluntary benefits. A consultant with Mercer for more than 20 years, Rich works with employers across the country on the design, evaluation, and ongoing management of their health and group benefit plans, with special expertise in understanding the intersection of health, absence and employee productivity. Rich is a Fellow in the Society of Actuaries, a Member of the American Academy of Actuaries and a Fellow in the Conference of Consulting Actuaries.

Register for Mercer US Health News to receive weekly e-mail updates.