Unlimited parental leave may not be best

Some hail Netflix for generous benefit, but questions arise

New parents have a lot of things to worry about — building routine, bonding with their child, finding time to sleep.

This week, Netflix may have piled on some more.

The Los Gatos streaming video company announced a new parental leave policy Tuesday that promises unlimited paid time off for new moms and dads within the first year of bringing a child home.

In the United States, the only leading economy in the world that doesn’t guarantee paid maternity leave, that amount of time and flexibility is practically unheard of. In the days that followed, bloggers and pundits lauded the change as “revolutionary” and “game-changing.”

But, experts said, it also saddles new parents with the added pressure and uncertainty of navigating an openended policy in an industry — and in a company — where productivity is paramount and lagging behind could jeopardize your job.

“With these unlimited time-off benefits, it’s kind of a nebulous benefit that can lead to a lot of uncertainty,” said Bruce Elliott, manager of compensation and benefits for the Society of Human Resource Management. “There’s a concern about what kind of perception (the amount of leave employees take) will have in the workplace. Will this have an impact on their career? An impact on their mobility? It all plays a role.”

This might lead to parents taking less time than they actually need or not giving the child their full attention during that time, focusing instead on answering e-mails or staying plugged in to the goings-on at the office, parental leave consultant Lauren Wallenstein said.

“What Netflix has done here has the potential to be a really beautiful, thing because it enables parents to have the best of both worlds,” she said. “But when you’re home you’re answering e-mails and taking calls, the quality of the leave will be compromised.”

Netflix’s high-performance culture is widely known.

A digital slideshow in which CEO Reed Hastings describes the company’s culture went viral in 2009, due in part to its unflinching candor about Netflix’s willingness to fire people.

The company, it said, holds workers to extremely high standards and regularly axes average or below-average employees. It also fires those whose skills are rendered irrelevant by evolving technology.

A new parent contemplating taking a full year of paid time off will know this, Wallenstein said, and it might freak them out.

“I would be very careful about utilizing this benefit as a newcomer to the company,” said Wallenstein, who runs the Los Angeles consulting firm Milk Your Benefits. “I feel like long-term employees who are a little more established might feel more comfortable taking as much time as they need, but someone just starting out? It would probably be difficult to take the full year off, despite the policy as written, without the potential of leaving a bad taste in managers’ mouths.”

Taking 6 months

Her recommendation for Netflix workers would be to take six months of leave all at once — no parsing, no paring and no ducking out on sporadic Mondays or Fridays for the remaining half of the year.

Elliott agreed that a concrete policy allowing six months of paid time off for new parents is ideal, but said most workers probably won’t volunteer to take that much time. The pressure on American workers to perform, particularly at companies like Netflix, can’t be understated, he said.

That’s why, on average, workers in the United States use only about 75 percent of the vacation time they are allotted, he said.

Netflix’s approach to parental leave mirrors its vacation policy: workers are allowed unlimited paid time off, which the company says it does not track.

At digital notepad company Evernote, which offers a similar vacation policy, managers had to start offering employees a cash incentive to take time off. Employees are given an additional $1,000 to take at least a week of vacation.

Mathias Meyer, whose German company Travis CI has about a third of its workforce in the U.S., said in an e-mail that when his firm instituted unlimited vacation, it seemed as though workers were trying to outdo each other in how few days they could take. This wasn’t what he wanted, so the company switched from an ambiguous “unlimited leave” policy to mandatory minimum vacation time, which, he said, “removes ambiguity.”

Netflix declined to comment on the policy this week beyond Chief Talent Officer Tawni Cranz’s blog post that said the new policy would give employees “flexibility and confidence.”

More than 2,100 fulltime workers and anyone hired by the company’s streaming division will be eligible for the unlimited parental leave, effective immediately, spokeswoman Marlee Tart said.

“We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances,” Cranz wrote, noting that the benefit is also available to adoptive parents. “Parents can return part-time, fulltime, or return and then go back out as needed. We’ll just keep paying them normally, eliminating the headache of switching to state or disability pay. Each employee gets to figure out what’s best for them and their family, and then works with their managers for coverage during their absences.”

About 260 part-time and temporary employees who work in the company’s DVD division — where discs are sorted and shipped to customers — will not be eligible for the benefit.

Federal law mandates that employers with 50 or more workers must allow new parents 12 weeks of job-protected leave to care for a newborn, but there is no mandate that companies pay workers during that time. According to the Bureau of Labor Statistics, just 13 percent of workers had access to some kind of paid family leave.

Other policies

It’s unlikely Netflix’s announcement will push many other companies to offer an unlimited year of paid parental leave, experts said, noting that its impact will likely be greatest among tech companies, where lavish benefits already extend beyond what most other companies in the U.S. offer, and in pushing parental leave into the national conversation.

Just a day after Netflix announced its change, Microsoft increased its maximum paid leave for new mothers from 12 to 20 paid weeks. New fathers will now be able to take up to 12 paid weeks, instead of four. The company said the policy had been in the works for a while and that the timing was merely a coincidence, but Elliott guessed it probably pushed up the announcement to land after Netflix’s.

Workers at Google receive up to 12 weeks of paid “baby bonding time,” while birth mothers are eligible for up to 18 weeks of paid maternity leave. Child care centers, nursing rooms, $500 “toward baby bonding” and a free premium membership to child care booking service Care.com also come standard.

Apple employees can start their maternity leave up to 4 weeks before the baby is due and continue on paid leave for up to 14 weeks after the baby is born; non-birth parents are eligible for up to six weeks paid time off.

At Facebook, parents receive four months of paid parental leave, a $4,000 “new child benefit” for each kid born or adopted, subsidized day care, access to on-site nursing rooms, breastfeeding workshops and family classes.

Wallenstein said the added perks of on-site child care and monetary bonuses are nice, but having a generous timeoff policy is the most important benefit a company can offer new parents. Netflix seems to agree.

“Experience shows people perform better at work when they’re not worrying about home,” Cranz wrote of Netflix.