Why Netflix just offered the most generous parental leave policy in the country

Netflix has announced that it will be offering employees unlimited paid parental leave of up to a year after one gives birth to or adopts a child. Netflix joins other tech companies that offer generous family leave packages, in stark contrast to what most American workers receive from employers. Hari Sreenivasan learns more from Sarah Jane Glynn of the Center for American Progress.

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    The decision by Netflix, the video streaming service, to grant up to a year of paid leave for new parents generated big interest among workers today. The new and unusual company policy will apply to mothers and fathers of newborns or newly adopted children.

    Hari Sreenivasan in our New York studios has more on this story.


    Netflix employees will be able to determine their schedules for up to a year after having a baby. A few other tech giants have also set a new standard in recent years. Google provides more than four months of paid leave for biological mothers. Apple offers a similar amount.

    But for most new parents, it's a very different story. Just 12 percent of private sector employees in this country have access to paid family leave through their job.

    Some context now on the Netflix policy and whether others will follow suit at all.

    Sarah Jane Glynn studies these issues and advocates for greater leave as the director for women's economic policy at the Center for American Progress.

    So, how big of a deal is this Netflix announcement?

    SARAH JANE GLYNN, Center for American Progress: Well, it's a huge deal, in that this is the most generous policy that I'm aware of any American company offering for new parents that work for them.

    But you're right to note that only 12 percent of workers currently have these types of voluntary policies through their employers, so while this is a tremendous boon for people who are lucky enough to work for Netflix, the majority of the work force is not going to be impacted by it.


    Netflix is already in a specific category. It's an enormous company. It's in the tech sector, where it's actually pretty competitive to try and recruit people. But what's the ripple effect likely to be on an auto manufacturer or an iron plant somewhere else in the country?


    Well, I think there's a couple of really interesting things to keep in mind here.

    One is, as you noted, tech companies are known for offering these very generous leave policies. And part of the reason why they do that is because they have recognized this is a really effective way to recruit talent and to retain that talent.

    One of the reasons that Google expanded their parental leave policy was because they noticed that they were losing so many talented women from their work force. And once they expended the maternity leave, their retention rate increased by 50 percent.

    It makes really good economic sense for these large companies who can afford to offer these kinds of policies to do so. My fear is that these very big companies that have a lot of money can afford to offer very, very generous policies to their workers, but smaller businesses and businesses that don't have that same kind of bottom line oftentimes struggle to offer voluntary policies like this.

    So that's part of why we have been arguing that we need to have a national standard and we need to have a large-scale national paid family leave program, like you see in every other advanced economy in the world, so that we're not expecting individual businesses to have the foot the bill entirely on their own.


    And so how would something like that get funded? I can hear small businesses around the country watching this saying, well, OK, where is that money going to come from? If there is a national plan, if it's not coming out of my pocket, it's coming out of whose?


    Well, one thing that's great now is that we can look to three states that have already implemented these types of policies.

    California has had a family leave program in place for over a decade now. And they were followed by New Jersey and now most recently Rhode Island. And in those states, employers aren't expected to pay into it. It's a very, very small payroll tax. You're talking about, in New Jersey, less than $50 a year for the average worker to fund this type of program.

    And then the wages are there for you when you need them. So like every social insurance program, it requires very, very small premiums to be paid, but the payoff is huge for folks who need to utilize them. And I would also like to note that the policies I mentioned aren't just for new parents. Those also cover other types of family caregiving, which I think is really the next space that we're going to see movement in our country, because certainly new parents need time off to care for babies, but, as our population ages, people also need time off to care for their other family members as well.


    And there seems to be a couple of different distinctions when we talk about family leave. Sometimes, it's just for biological mothers. Other times, it's for mothers only. This seems a bit more broad. Is that reflecting a different trend?



    And I think it's really important to note that what Netflix is offering to their workers is very, very different, in that it offers the same amount of leave to biological birth mothers, to adoptive parents and to fathers. And that's something that's very, very different.

    And I think it's really important and is definitely responding to a need. One thing that we have seen, particularly among millennial men who are becoming fathers for the first time, they're reporting being involved with their children's lives is incredibly important to them. They're very, very invested in trying to figure out ways to balance work with family and to be there for their children in ways that perhaps their parents weren't able to be there for them.

    So I think that this is the new face of this movement. It's going to be men who are arguing, dads need this leave, too. It's not just about mothers, but it's about all types of families.


    Considering that other countries have been doing this for some time, considering that are a few companies that have some data, what are the outcomes? Do employees — is it actually possible to prove that this retains employees, that they're happier, that they work longer or are more productive?


    So, all of the data that we have on paid leave shows that it makes people more likely to return to work. It makes them more likely to return to that same job and that same salary that they held before they had a baby.


    It makes people more productive and more devoted to their companies, because, frankly, they don't have to worry so much about how they're going to make ends meet. So it really is a win-win for employers and for families. You know, there's very, very few arguments that actually fly to argue against this. All right, Sarah Jane Glynn from the Center for American Progress, thanks so much.


    Thank you.

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