U.S. Maternity Leave Benefits Are Still Dismal (Forbes)

By Heidi Brown

May 4, 2009

Cindy Lobel had worked as an assistant professor of history at Lehman College in the Bronx for two years when she had her son Ben. Like many professional women, after giving birth, she got three months' leave--unpaid--from Lehman, which is part of the public City University of New York.

"I would have loved to stay home with him for a year, but there was no way we could afford it," says the Brooklyn mom, who's married to an online technology-news editor. Instead, she was able to stay home for her allotted 12 weeks by cobbling together a partially paid leave using the 20 sick days she had accrued at the college. Now, the professor is hoping she--and her son, now 8-months--don't get sick any time soon.

Lobel's situation is all too common here in the U.S. Under the 1993 Family and Medical Leave Act, which passed after 10 years of legislative wrangling, working women are granted 12 weeks' unpaid time off to care for a newborn or adopted child, with the guarantee of the same job when they return. To qualify, they must have been employed for at least 12 months at the same firm before the time off and have worked a minimum of 1,250 hours during the same period.

What makes this law so unhelpful for many working women is that companies with fewer than 50 employees are exempt from abiding by it--meaning that these smaller firms are not obligated to grant any time off to care for a newborn (or sick family member). Although many large companies, such as Wall Street outfits and telecommunication firms, offer some kind of paid-leave package, more than half of U.S. companies employ fewer than 50 people.

The statistics are revealing. A 2008 report from the Families and Work Institute indicated that 16% of companies with at least 100 employees provide full pay during maternity leave. This is down from 27% in 1998. Even for those who get some compensation during maternity leave, the norm for most women tends to be a patchwork of unused sick or vacation days.

And since the majority of women can't afford not to work for a full three months, they also tend to return to work sooner than the law dictates. Perhaps that's why in May 2008, the U.S. Census Bureau reported that 55% of first-time mothers were working six months after giving birth. In the early 1970s, only 25% were working 6 months after childbirth.

Some women are marginally fortunate. Paige DeLacey, 41, was a human resources executive at Gap Inc. in San Francisco for 15 years. She had two children while at the apparel company, with no paid leave from her employer. Instead, California has a state program that pays benefits, so DeLacey got six weeks' disability pay for each child, which made it possible for her to remain out of work for a total of four months. (She kept her vacation time for future use--in case she or her children got sick.)

To date, there are three states that offer paid-leave programs--California, New Jersey and Washington. The benefit plans are structured in a similar way: A small amount is deducted from the paycheck of nearly every working resident of the state. When a resident takes leave to care for a child or family member, a percentage of the person's wages is paid out as disability benefits. For California, the amount is 55%. In New Jersey, workers pay out 0.09% of their paycheck and can receive up to two-thirds of their weekly salary for six weeks. In Washington state, starting in October of this year, residents are entitled to up to $250 per week in disability payments for five weeks.

Still, against the backdrop of the rest of the developed--and still developing--economies throughout the world, American women's maternity leave looks positively paltry.

The U.S. and Australia are the only developed economies in the world that provide no paid maternity leave. France, Singapore and Austria all offer four months' paid maternity leave benefits, and Germany offers 14 weeks. In the U.K., a woman receives 90% of her salary for up to a year off with her baby. Swedish mothers hit the jackpot with 480 days off at 80% of their salary, followed by their counterparts in Serbia and Denmark with a full year off at full pay. Even in Gambia, Somalia and Vietnam new mothers receive at least three months' paid maternity leave.

In the U.S., which is second only to Japan among the highest corporate-tax rates in the world, employers balk at the extra expense of paying an employee who's not working. On Feministe, a popular blog for women's issues, "Dan," who described himself and his wife as entrepreneurs, remarked that too often, employers have to ante up for more employee benefits. "It seems like everything in our society is something that the employer is expected to magically provide," he says. "And then we wonder why unemployment is through the roof and the economy is crashing!"

In fact, generous maternity benefits can be a win-win for business owners, female workers and their infants. DeLacey, who was responsible for 10,000 Gap employees and is now head of talent for Landor Associates, a global brand-consultancy, points out that it can cost some companies, such as law firms, up to $100,000 in recruitment and training costs to replace a highly skilled professional woman who leaves her job after deciding she cannot afford child care or wants more time at home after she gives birth or adopts. DeLacey advocates that companies offer more flexibility to new moms, allowing them to work a few days a week at a partial salary after their maternity leave.

"Engagement pays back," says DeLacey, explaining that women who receive good maternity benefits are more likely to return to their jobs and show loyalty to their employer. Studies also have shown that women who receive paid maternity leave breastfeed longer, potentially helping to boost infants' immune systems. Plus, more time at home allows babies to develop stronger emotional bonds with their mothers.

There is hope on the horizon. The legislatures of five other states are currently examining their own version of California's employee-funded arrangement, which may help convince companies that the benefits won't come out of their bottom lines. In March, President Barack Obama created the White House Council on Women and Girls, which is tasked with ensuring that all government agencies include the welfare of females when formulating policy; one of its priorities will be to evaluate and develop "policies that establish a balance between work and family."

Even for Lobel, the history professor, things are looking up. Her union recently negotiated a new contract that includes eight weeks of paid maternity leave--it was the most difficult point to agree on--and because she qualifies to be grandfathered in, she will be paid retroactively.

Click here to see how maternity benefits compare across 180 countries