Large companies lack transparency on paid parental leave

Paid parental leave has become a top priority for American workers. Among American millennials surveyed by Ernst & Young, 83% said they would be more likely to join a company if it offered paid parental leave, and 38% would consider moving to another country with better parental leave policies.

Employees are increasingly demanding of employer policies, as the United States is one of the only developed countries without a national paid parental leave law. As of 2023, only 27% of U.S. private-sector workers had access to paid parental leave, according to data from the Bureau of Labor Statistics.

With such limited access, it’s no surprise that employees are actively looking for companies with better parental leave policies. What is surprising is how difficult it is for employees to get useful comparison data before accepting a job.

The lack of public disclosure of parental leave policies is particularly evident at large public companies, according to a new study by Hillary Cookler, a doctoral student and researcher at the UCLA Anderson School of Management.

A surprising lack of public transparency on paid parental leave

Cookler surveyed the paid parental leave policies of the 500 largest U.S. public companies. The list of companies was generated by S&P Capital IQ based on LTM revenue as of Aug. 20, 2024.

Cookler’s findings are available in an online database that rates 500 companies on their paid parental leave policies. The new database offers comparative data that reveals which companies are performing best. The data also highlights the broader problem of a lack of transparency in employee benefits.

One of Cookler’s most surprising findings is how little information most large companies publicly disclose about their parental leave policies. “The lack of transparency around paid parental leave is striking,” Cookler said via email.

Cookler began his survey with what potential candidates look at first: company websites. “Only 51% of the 500 largest publicly traded companies in the U.S. confirm on their website whether they offer paid parental leave,” Cookler found. “Even fewer (34%) provide details about their paid parental leave policy on their website.”

Cookler also looked at other official company sources, such as press releases. When she couldn’t find details about a company’s paid parental leave policy in official sources, she turned to unofficial sources, including online forums like Glassdoor, Indeed, or theSkimm’s #ShowUsYourLeave campaign. Her database only included data from unofficial sources if multiple sources provided consistent information.

Even with this extensive research, Cookler was only able to confirm that 72% of the largest public companies in the U.S. offer some amount of paid parental leave, and 3% offer none at all.

That means one in four of the largest U.S. companies aren’t providing even minimal transparency about paid parental leave. “For 25 percent of companies, it’s unclear whether they offer paid parental leave (it couldn’t be confirmed with certainty whether they do or not),” Cookler said.

Information on eligibility requirements was particularly scarce among the 500 largest companies. For example, some parental leave policies differentiate between salaried and hourly employees, full-time and part-time employees, or others. Some policies are available to new hires, while other companies require a period of service before accessing leave benefits.

These differences can impact the value of a paid parental leave policy. Yet Cookler found that “only 10% of companies list their eligibility and seniority requirements on their website.”

It was also difficult to find information on the length of parental leave provided by each company. Cookler was only able to determine the length of paid leave offered to the primary parent after a non-C-section birth for 64% of the 500 largest companies. She focused on this core indicator because women are more likely to take leave and generally take longer leave than men.

Even fewer companies in Cookler’s database provided details on paid leave for secondary parents. Yet the wide variation in leave for secondary parents also significantly affects the value of a policy, particularly for male partners of biological parents.

A previous study found a similar lack of transparency within the broader group of Russell 1000 companies. As of September 2022, only 60% of Russell 1000 companies disclosed a paid parental leave policy, according to a report from JUST Capital. Only 43% disclosed the specific number of weeks offered to primary parents, and even fewer disclosed details about leave offered to secondary parents.

Transparency of paid parental leave linked to quality of policy

Cookler’s online database rates each of the 500 largest U.S. public companies not only on transparency, but also on the quality of their paid parental leave policies.

Transparency measures the amount of information a company publicly discloses on its website about its parental leave policy. Quality measures the amount of paid parental leave a company provides to full-time, U.S.-based primary parents after the birth of a child without a cesarean section.

While overall transparency levels are surprisingly low, Cookler found a positive correlation between transparency and quality. “There’s a very strong relationship between transparency and the length of paid paternity leave,” Cookler said. In other words, companies that are more transparent tend to be more generous in their leave policies.

This connection makes sense from a recruiting and retention perspective. Companies that have relatively strict parental leave policies should have a competitive advantage by sharing this information with current and potential employees.

The link between transparency and quality also suggests that companies that don’t readily disclose information about their parental leave policies may have less competitive plans. Job candidates who value paid parental leave may reasonably view the lack of transparency as a potential red flag about quality.

However, the correlation between transparency and the quality of paid parental leave policies was not perfect. Nearly 30% of companies with the highest quality scores also had the lowest transparency scores.

Cookler confirmed that these companies offered extended paid leave to primary parents who were in the top quartile of their peers. Yet these companies did not even disclose the existence of a paid parental leave policy on their websites. “It’s surprising that many companies that offer this benefit don’t communicate it more openly,” Cookler observed.

Why the lack of transparency on parental leave matters

“Transparency is important and has consequences for both businesses and workers,” Cookler said via email.

For employees, the lack of accessible data on companies’ parental leave policies hinders career decision-making. “Greater transparency around paid parental leave allows workers to make more informed career decisions,” Cookler said. “For parents and parents-to-be, paid parental leave is a highly valued benefit and a key factor in evaluating overall compensation.”

The lack of transparency about parental leave policies also makes it difficult for companies to ensure they remain competitive. “Companies want to have a benchmark against other companies, but that’s not possible when so many companies are opaque about their parental leave policies,” Cookler said in a phone conversation.

Why can’t job candidates just ask about paid parental leave?

Companies that don’t publicly disclose information about their parental leave policies put candidates in a difficult position. Asking about parental leave during the hiring or interview process can be risky, especially for women.

“Women often worry that asking about paid parental leave could reveal their status as a mother and trigger discrimination,” Cookler says. A survey by theSkimm found that 60% of job seekers, mostly women, are hesitant to ask about parental leave during a job interview.

These concerns are entirely rational, given the abundant evidence of maternal bias in the workplace. Mothers are often perceived as less committed, less reliable, and less competent, regardless of their performance. The resulting negative impact on hiring, pay, and promotion decisions is so well documented that it has been dubbed “the motherhood penalty.”

But women face maternal bias even before they become mothers. When decision-makers believe a job candidate is likely to have a child in the near future, they view her as a riskier candidate. Researchers call this the “maybe baby effect.” So the consequences are real when women ask about a company’s parental leave policy during a job interview.

Companies can allay these concerns by making the details of their paid parental leave policies easily accessible on their websites and other official platforms.