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Maternity leave costs

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The United States is one of the 5 countries found not to provide paid maternity when a study of 168 countries was conducted. The only other developed country not to provide this benefit is Australia. That makes the situation here in the United States unique. So what are the costs associated with maternity leave that might prevent companies from offering such a benefit?

First, looking to the laws on maternity leave, we find two distinct policies that are in place protecting employees who find themselves pregnant. The first one is the Pregnancy Discrimination Act of 1978 and secondly is the Family and Medical Leave Act of 1993.The Pregnancy Discrimination Act of was put in place to help prevent against discrimination of pregnancy, childbirth, or other related medical conditions. It is applicable to businesses with 15 employees or more and includes state and federal jobs as well. The Act states that you a company cannot refuse to hire a woman based upon the physical condition of pregnancy, or pregnancy related conditions. If that employee needs modifications to their job due to limitations of the pregnancy or conditions that are hazardous to the employee during pregnancy, modifications should be made in the same manner that they would be made for other employees that may be physically disabled.

Employers must hold jobs open for employees for pregnancy-related absences for the same length of time they would for other employees that are sick or on disability leave.They must be permitted to work as long as they wish up to the pregnancy and return to work without predetermined time limits imposed. Health insurance provided by companies must include pregnancy related expenses with the same types of cost structures as other medical conditions. Benefits provided must be available to any pregnant woman, and cannot be determined upon marital status. Bottom line, pregnant employees need to be treated the same as other employees with physical limitations or disabilities.

The Family and Medical Leave Act of 1993 is one of the United States labor laws that allows employees (both male and female) to take unpaid leave due to any serious health condition or to care for a sick family member, or for the birth, adoption, or foster care of any new family member into the home. The Act provides up to 12 weeks of unpaid leave - job protected. This means that employer must be reinstated to their previous position, or one that is equal in pay, responsibilities and benefits. This law also provides protection against retaliation for taking such leave, such as loss of benefits or job termination. This law is mandated for businesses with 50 or more employees that live within a 75 mile radius. The employee must have worked for the company for at least 12 months and a total of 1250 hours during that 12 month time period.It also applies to state and federal jobs.

The costs associated with these laws include higher insurance premiums where insurance is provided. Costs for replacement of personnel while on leave, or overtime costs for those filling in as well. If you were to provide a paid maternity leave program it would add the cost of the employee as well. There are several payment plans for providing paid maternity programs. You can provide a 100% paid leave, a 50% paid leave or any other percentage variation amount. The length of time of leave paid can vary greatly from 3 weeks to up to a full year. Some of the costs can be subsidized through federal government monies or through employee payment programs.

Additional costs that may not directly impact the balance sheet include employee satisfaction, turnover rates, health related risks, employee loyalty, and fixing errors that may take place by less qualified replacements.

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