Paid maternity leave for small business exists today in all fifty states. Many women have the opportunity to enjoy income replacement while home recovering from childbirth and bonding with her baby. Her employer provided this benefit without adding to direct costs.
Small businesses can offer voluntary employee benefit programs, which provide paid maternity leave for female employees. There are three important points to know about this option.
- Eligibility criteria for employers
- Employer obligations and duties
- Employee requirements and action steps
Small Business Paid Leave Eligibility Criteria
The paid maternity leave for small business eligibility criteria is laughably lax. There are no compelling eligibility criteria, which exempts employers of any size from offering this popular benefit. Any sized enterprise can easily afford to hire and retain female employees of childbearing age, while promising this entitlement.
Small businesses can offer voluntary employee benefit for maternity leave. Short-term disability and hospital indemnity insurance both make payments directly to employees for normal childbirth. Employees pay the premium themselves, so there is no direct cost to the owners. The only cost is the administration of a payroll deduction.
Eligibility starts with three or more employees, and varies by industry. Employees cannot purchase these programs as individuals, but can if two co-workers join in.
Three or More Benefits Eligible Employees
One of the most common statements made by site visitors relates to employer size. We often hear “my employer is a small business and can’t afford to offer a good employee benefits package.” The reality differs.
The eligibility criteria for paid maternity leave fit almost every small business. Those with as few as three benefit eligible employees qualify to offer voluntary employee programs.
The definition of “benefits eligible employee” has plenty of wiggle room. It does not necessarily mean that the employer is contributing towards traditional group health insurance premiums. It means any paid worker for whom they are willing to withhold a payroll deduction.
Most Industries Qualified
Small businesses in a wide array of industries qualify to offer voluntary paid maternity leave. Short-term disability is a key component making the entitlement viable. Many carriers base rates and availability on the employers industry. Therefore, the costs and access will vary.
Those in low-risk industries enjoy the lowest costs, and easiest qualifications. Low-risk industries pay the lowest rates, and carriers do not place any limitations on the policies. The rates and qualifications are the same regardless of employee size.
Those in high-risk industries may pay slightly higher premiums, have limited features, or may not qualify at all. Carriers offset the higher claims probabilities by charging higher premiums. They may also limit the length of payment periods, and avoid zero-day accident elimination periods. Many carriers prohibit sales altogether for high-risk industries.
Each carrier has differing eligibility criteria for high-risk industries.
Paid Maternity Leave Small Business Obligations
The paid maternity leave small business obligations are also laughably lax. There is not very much that they are obliged to do. The carriers do most of the heavy lifting. Once again, there are no compelling obligations precluding employers of any size from offering this popular option.
Owners simply have to complete two one-page forms, support a payroll deduction, and allow carriers to educate employees.
Complete Account Form
The first obligation is to complete two simple account forms and meet their modest expectations.
The new account form requests basic information about the enterprise such as name, address, phone number, number of employees, and tax ID number. The form also obliges them to withhold premium from employee paychecks, and forward the deductions to the carrier once per month. It also obliges the business to notify the carrier of changes in deductions.
The premium authorization form allows employees to make premium payments using pre-tax elections. Pretax payroll deductions reduce payroll taxes.
The second obligation is to allow trained benefits counselors to educate all employees, and capture their elections. Employees need to learn about how the two programs create paid maternity leave, and security for the unexpected. Most employees will have a need to protect their incomes in case of accidents and illnesses.
Small business owners must allow access to employees during working hours.
Paid Maternity Leave Employee Requirements
Employees carry requirements in order to enjoy paid maternity leave. The small businesses can offer voluntary benefits if they know about them. However, most employees and owners are completely unaware.
The media hammers away on the idea that paid maternity leave does not exist in the United States, when it clearly does. This misinformation causes people to miss out unnecessarily.
Two big requirements stand in the way. More women should ask their boss, and their co-workers should act prior to conception.
Ask Your Boss
There is a very good chance that your boss is completely unaware that paid maternity leave for small businesses even exists. Most site visitors are employees rather than owners. The owners may have no idea you or any of your co-workers are even interested.
The most important employee requirement is that somebody asks her boss for voluntary paid maternity leave. It is much easier and far more private than you think. If you do not ask, you do not get.
Purchase Prior to Conception
Another critically important paid maternity leave requirement is that co-workers attend the information sessions, and learn the need to purchase coverage prior to conception. Pregnancy is a preexisting condition and is not covered. Far too many women call our offices after conception wondering how to purchase a policy.