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Ikea assembles generous paid leave platform

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in Compensation and Benefits,Human Resources

An international retailer with a significant presence in the United States has broken new ground for providing paid leave to workers who need to take time off.

Ikea, the Swedish home goods and furnishings purveyor, just introduced a paid parental leave benefit plan that covers almost all of its 13,000 U.S. employees in 44 stores, including part-timers.

Paid parental leave is the exception, not the rule, in the U.S. According to the Department of Labor, only 12% of employees have access to the benefit.

Ikea’s new policy, which goes into effect Jan. 1, covers birth mothers and fathers, as well as adoptive and foster parents.

Duration of leave will be based on tenure. Employees who have been with the company for a year will be able to take parental leave for 12 weeks. For the first six weeks, they will receive their full wages; the second six weeks will be paid at 50% of normal pay.

Employees who have worked for Ikea for more than three years will be eligible for eight weeks at full pay and another eight weeks at 50%.

For part-time workers, it’s the most generous paid parental leave program in the country. Ikea placed no hours-worked limitation on the benefit. Thus, even someone who works just a few hours per week will be able to take time off and still receive pay based on their regular part-time hours.

The company expects the policy to apply to about 11,000 employees who meet at least the one-year service minimum requirement.

IKEA joins Coca-Cola, Hilton hotels and Netflix on the list of major employers that have made part-time employees eligible for at least partially paid parental leave.

Some states and cities have already made paid parental leave the law. California, New Jersey and Rhode Island fund parental leave through a payroll tax shared by employers and employees. The District of Columbia appears ready to adopt a similar approach.

American Express on Dec. 12 announced the nation’s most generous paid parental leave benefit: 20 weeks, starting Jan. 1.

Bottom line: To stay competitive in a tightening job market, now may be the time to consider providing paid parental leave.

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