Do I Need a Parental Leave Policy If I Have a Small Team?
What happens when an employee tells you they’re expecting—and you don’t have a leave policy in place? Cue the panic. In this episode, we’re breaking down everything you need to know to confidently respond and support your team when it’s time for parental leave.
We’ll get into the basics of what’s legally required (spoiler: not much at the federal level), the states that do mandate paid leave, and the key decisions you need to make if you’re ready to offer more than the bare minimum. Whether you’re starting from scratch or looking to upgrade your current policy, you’ll learn how to design a plan that supports your employees and your business.
We also talk strategy: when to supplement state benefits, how to structure a phased return, and why a modern, inclusive policy is a powerful recruiting and retention tool. If you’ve been putting off writing a parental leave policy or just don’t know where to start—this one’s for you.
What you’ll hear in this episode:
[2:10] What is paid parental leave—and what’s required?
[4:35] Why most small businesses don’t fall under FMLA
[6:25] How state-mandated paid leave works (and where it’s required)
[9:40] Should you supplement state programs or offer your own plan?
[12:05] Business case for offering more than the minimum
[14:50] How to respond when you don’t have a policy yet
[17:25] Step-by-step to create your own leave policy
[20:00] Inclusive practices: moving away from “primary caregiver”
[22:15] Modern options: phased returns and flexibility
[24:30] Final takeaway: support your team through life’s big transitions
Resources
Learn more about federal leave laws: DOL on FMLA
See if your state mandates paid family leave:National Partnership State Paid Leave Laws
Read It Instead:
Picture this: An employee walks into your office (or sends you a Slack) and says, “I’m having a baby.” You’re thrilled for them—but inside, you’re scrambling because… you don’t have a parental leave policy. Now what?
If you’re a small business owner or startup leader, you’re not alone. Most small companies don’t think about paid parental leave until they have to. But planning ahead doesn’t just keep you compliant—it helps you build a stronger, more loyal team.
Here’s everything you need to know to get ahead of the curve and create a parental leave policy that supports your people and your business.
What Is Paid Parental Leave, Really?
Paid parental leave is job-protected time off for employees to care for and bond with a new child—whether that’s through birth, adoption, or fostering—while still receiving some or all of their pay. It applies to all parents, not just birth moms.
There’s no federal law that requires private employers to offer paid parental leave. The Family and Medical Leave Act (FMLA) only guarantees up to 12 weeks of unpaid leave—and it only applies if you have 50+ employees within a 75-mile radius. Most small businesses are exempt.
As of April 2025, 13 states and Washington, D.C. have paid family leave laws, including California, New York, Washington, and Massachusetts. These state programs typically replace 60–80% of an employee’s wages for a set number of weeks and are funded through payroll taxes.
📌 Even if your state mandates paid leave, your work isn’t done. These programs often only cover part of an employee’s wages—meaning your team could still be taking a pay cut unless you choose to supplement.
Check if your state requires coverage:
👉 National Partnership’s State Paid Leave Laws Guide (PDF)
Why Offer Paid Leave If You’re Not Required To?
Let’s be real—offering paid parental leave can feel like a big lift when you’re bootstrapped or just getting by. But the ROI is there.
It’s a Hiring and Retention Advantage - Job seekers (especially Millennials and Gen Z) care about values-aligned workplaces and inclusive benefits. A thoughtful parental leave policy can help you win top talent—and keep them around. According to SHRM, 70% of employees say paid family leave is an important factor when considering a new job.
It Builds Loyalty - Supporting your team through major life moments builds trust, engagement, and emotional loyalty—something a competitor’s bigger salary offer may not be able to buy.
It Reduces Burnout and Turnover- Giving new parents time to adjust to their new normal means they come back more focused and less likely to quit.
Don’t Have a Policy Yet? Here’s What to Do.
If someone just told you they’re expecting and you’re scrambling—take a breath. You’re not behind. You’re just getting started.
Step 1: Lead with Empathy - Start by congratulating them, then share that you’ll work together to create a plan that works for both of you.
Step 2: Understand the Legal Requirements- Does FMLA apply? What are the state laws based on where they work (not where your company is based)?
Step 3: Create a Temporary Plan -Decide how much time you can offer, whether you’ll supplement any state benefits, and how health insurance and PTO will be handled.
Offering paid parental leave isn’t just about compliance—it’s a leadership decision. When you support your team through the biggest transitions in life, they show up stronger, more engaged, and more committed.
That’s what being the world’s greatest boss is all about.