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Ikea Is Giving All US Employees Paid Parental Leave, Should You?

By George Khoury, Esq. on December 07, 2016 | Last updated on March 21, 2019

In a move that is being applauded, Ikea has announced that all US employees will now be eligible for paid parental leave after one year with the company. Ikea employees at every level, from entry level hourly store employees to those in the US corporate offices, will now receive paid maternity/paternity leave for up to three months, with the first half at full pay and second half at 50 percent of their pay. If an employee has been with the company for over three years, it increases to four months, with full pay for two months and half pay for two months. Ikea employs nearly 14,000 people in the US.

This replaced their prior policy that only provided 5 days off, and then allowed the mother to take an additional 8 weeks of disability. Under federal law, the FMLA (Family Medical Leave Act) only requires employers to provide unpaid time off. Certain states also have laws that require employers provide maternity leave.

Benefits Are Costly

Many small businesses cannot afford to keep up with large, generous employers like Ikea or Netflix when it comes to offering time off and benefits. Under state and federal law, the requirements are usually different for smaller employers. However, you should be aware of the minimum legal requirements and of your potential obligations under the law.

Generally, the best talent is going to go to the highest paying employer. Employers seeking to attract the best and most dedicated employees may find that just meeting the legal requirements for parental leave, or other benefits, is insufficient. Ikea's hope in making the move to increase their new parent leave policy, in addition to attracting top talent, is to increase their employee retention rate. After all, training new employees is costly.

Better Benefits Make Employees Happier

Offering vacation, sick leave, and parental leave, as well as other benefits, such as health and retirement, can really impact an employee's willingness to commit to long-term employment. By offering benefits that provide employees with long-term stability, you provide an employee with an incentive to stay with your company. By contacting an experienced business attorney, you can make sure you avoid costly mistakes.

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