Why Virgin is giving 1 year of paid parental leave
British billionaire Richard Branson's legacy might not only include his legendary exploits, but his almost radical championing of workers' rights.
Branson's Virgin Management has taken the unusual step of allowing his employees who are new parents to take up to 52 weeks of parental leave at 100 percent pay. There are some limitations, however. According to the company's announcement, full pay is only available to employees who have worked there for more than four years, while workers with less seniority may take leave with a small portion of their pay.
The deal is also for "shared parental leave," which means it's designed for parents who split up time to take care of a baby immediately after birth or adoption. The new policy comes on the heels of the U.K.'s new Shared Parental Leave law, which as of April allows couples to stagger their parental leave across the course of a year.
While Branson's policy is indeed "ground-breaking," as Virgin Management CEO Josh Bayliss Management called it, similar arrangements are far from becoming a reality in the U.S., one of only two countries around the world that doesn't mandate paid maternity leave to new mothers.
Paid leave is actually on the decline in the U.S., according to research from the Families and Work Institute. Only 9 percent of employees at companies that pay for some maternity leave receive full pay, with the majority of companies only offering part pay. In 2008, 16 percent of women received full pay during maternity leave. Four out of 10 companies provide no pay whatsoever.
America is only one of only two countries that don't require paid maternity leave, along with Papua New Guinea. It's not hard to see why the U.S. ranks last among developed nations in providing time off for new parents, according to the Organization for Economic Cooperation and Development.
So while Virgin is making a generous offer to its employees, the company is building upon a framework that's already been set in place by the U.K. government. The U.S. is unlikely to to adopt similar leave policies any time soon. As a result, most American businesses stick to offering the bare minimum -- a maximum of 12 weeks of unpaid leave, as mandated by the Family and Medical Leave Act.
Virgin acknowledged that the new U.K. law spurred the company to reconsider its benefits.
"The introduction of the new Shared Parental Leave legislation was a great opportunity for us to review our existing maternity, paternity and adoption benefits, and offer something special to our people," Bayliss said in a statement.
With all U.K. companies required to allow employees to share up to one year of leave to take care of a new child, Virgin is taking the next step to provide an additional incentive to maintain and attract talent. That was echoed in Branson's statement in why he backed the generous policy.
"If you take care of your employees, they will take care of your business," Branson said in a statement.
Branson has made similar generous gestures to employees, such as his decision last year to create a new vacation policy giving salaried workers unlimited amounts of vacation. The policies also only apply to a small set of employees, with the U.K.'s Independent newspaper noting that it affects 140 people employed at Virgin Management's London and Geneva offices. The policies aren't available to people working at other divisions of Virgin Group.
Still, Branson's move might inspire other executives to think about how they can tailor policies to attract and keep their employees. He noted, "I'm delighted that we can offer this support to our staff so that they can enjoy parental leave to the full as we continue our work in changing business for good."