Gates Foundation Slashes Paid Leave Plan From One Year to Six Months. Here’s Why.

After three years of offering a full year of paid family leave to parents of newborns, the Gates Foundation is cutting their offer in half. This has important implications for the public policy debate over paid family leave.

Paid family leave has bipartisan support. The policies behind how to get there in a way that is fair to parents, children, businesses and taxpayers, however, vary.

Few U.S. companies have the means to experiment with long-term paid leave plans like those touted in other developed countries like the United Kingdom, which covers the cost federally with enormous tax rates.

The Gates Foundation was one that did, along with tech counterparts like Netflix, which still offers one year to this day. What are the effects of such lavish leave policies?

Three years in, the Gates Foundation discovered that a full year of leave was hindering their efforts as an organization. They report scrambling to cover for important roles, filling gaps left by those subbing in and struggling to reintegrate employees smoothly back into their past positions upon return.

A researcher interviewed on the subject noted that “6-9 months is probably the sweet spot,” with a year really hindering a worker’s career trajectory and making it less likely he or she will even return to the workforce.

This jibes with data from countries that offer generous paid leave programs; the data suggest that longer paid leaves correlate with wider gender wage gaps, suggesting that women in particular struggle to advance in their careers under such policies.

A year of fully paid leave might sound nice, but the latest shift by the Gates Foundation underscores that even good things – like family leave – can come with tradeoffs. Every family is different, and parents have to weigh many factors when deciding how to juggle the responsibilities of caring for and providing for a new baby. This suggests the real “sweet spot” for family leave length is different from worker to worker.

Fortunately, Independent Women’s Forum (IWF) has proposed a Social Security Earned Leave plan, which allows a woman to draw parental benefits after the birth or adoption of a new baby in exchange for voluntarily delaying Social Security retirement.  This policy comes with an explicit tradeoff, but this tradeoff represents a new option for Americans who today may not have any good options for paid family leave.

This plan is a flexible, optional, budget-neutral solution that doesn’t harm the long-term value of anyone’s Social Security but allows them to access funds they wouldn’t normally have without burdening their companies or taxpayers. For small businesses that cannot afford paid leave, this could be an enormous blessing.

Paid leave is an important step towards valuing family in a way our society desperately needs -- and there is a way to do it even if you aren’t Bill Gates.



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