Creating Benefit Equity With Paid Family and Medical Leave

As paid leave programs expand across the country, one issue is increasingly coming into focus for employers and HR leaders: benefit equity. It’s not just about meeting legal requirements anymore, it’s about creating a leave experience that meets the evolving expectations of your workforce and supports your broader goals for retention, engagement and inclusion.

The Cost of Inequity

Recent data shows that 26% of employees have quit their job due to dissatisfaction with their benefits and nearly a third of women say they would turn down a job offer if parental leave is inadequate.¹ Meanwhile, 78% of employers believe their employees are satisfied with their benefits — yet only 59% of employees agree.² In fact, only 28% feel their workplace is equitable.³ These gaps in employer perception and employee access are costing organizations talent and trust.

A Fragmented Leave Landscape

Despite growing demand, access to paid leave remains uneven. Only 27% of private industry workers have paid family leave, or PFL, and 45% have short term disability, or STD, coverage.⁴ At the same time, more than a dozen states have implemented paid family and medical leave, or PFML, programs — each with different rules, benefit amounts and job protections.

This complexity leaves employers facing an intricate challenge: how to deliver a consistent and fair experience for employees across locations, income levels and job types.

Where Inequities Arise

In many cases, PFML benefit maximums result in lower income replacement for higher-wage earners. Employees in PFML-mandated states may access generous benefits, while employees in other states may need to rely on accrued paid time off or receive no paid leave at all. And when PFML isn't integrated effectively with the Family and Medical Leave Act, STD and company leave programs, it can lead to confusion and inconsistent outcomes.

Practical Steps to Create Equity

So, how can HR teams turn these challenges into opportunities? It starts with being intentional.

• Step 1: Define your benefits philosophy. Your philosophy should guide decisions and trade-offs. Are you aiming to equalize access regardless of geography or align only with legal minimums?
• Step 2: Assess your offerings. Understand what benefits are available, which benefits are being used and where potential gaps exist. Gather and listen to employee feedback, then weigh costs and impacts holistically.
• Step 3: Coordinate strategically. Consider top-off strategies to increase wage replacement for higher-wage earners through employer-sponsored leaves or STD. Also evaluate programs for potential duplication of benefits or that may need to be adjusted or ended.
• Step 4: Communicate clearly. Only 31% of employers believe PFML provides sufficient income.⁵ Help employees understand how their benefits work together. Clear and frequent communication can help set expectations and ensure benefit utilization.

Execution Matters

Equity isn’t a one-and-done effort. It requires continuous evaluation and refinement. Many employers find value in partnering with a private PFML carrier to streamline integration, improve the claims experience and reduce administrative burden. These partners can offer faster adjudication, consolidated communications and coordinated benefit management — all of which help provide a more equitable experience.

The Business Case for Equity

Investing in leave equity pays off. Retaining just five employees can save a company roughly $200,000 in turnover costs.⁶ More importantly, equitable benefits improve employee well-being, engagement and loyalty, which help create a culture where everyone feels supported.

In today’s competitive talent landscape, having compliant leave programs is no longer enough. Employers must take the lead in designing benefit strategies that reflect employee needs, while reducing disparities and promoting fairness because equity in leave isn’t just the right thing to do, it’s a strategic business decision.

Need help keeping track of evolving laws? Visit our PFML page for helpful resources. For questions or to discuss how The Standard can help support your leave and PFML administration, contact a representative near you.