For small businesses and startups determining what employee benefits to provide your employees requires balancing a tricky combination of regulatory compliance, allocation of limited resources and marketplace competition. However, business owners may be surprised to learn that Social Security, unemployment insurance, worker’s compensation and unpaid family or medical leave are among the very few employee benefits that are often mandatory under federal law.
Absent a specific law in your state, most employee benefits in the United States are subject to employer discretion. Among these voluntary benefits is paid maternity leave. Unless you conduct business in one of three states--California, New Jersey and Rhode Island--that require paid family leave, your business is not required to guarantee paid maternity leave.
But paid maternity leave is gaining steam as one of the important benefits to ensure that your business can remain competitive in the marketplace. A survey of startup companies ranging from seed stage to post-IPO indicated that more than half of companies as early as Series A offer paid maternity leave and 100 percent of later stage companies (Series D to post-IPO) offer paid parental leave. Below we explain why paid maternity leave is a rare benefit in the United States, but why you may need to think about offering it earlier in your business’s life cycle to attract and retain top talent and even to improve your bottom line.