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Offering Family Leave Isn’t Out of Reach for Small Businesses

  • Offering family leave can make a company more competitive and help with employee retention
  • While such a program comes with costs, it is also infrequently used and can be cost-effective when considering other potential expenses
  • Connecticut is in the process of rolling out a state family and medical leave program, and companies are exempt from payroll deductions if they offer a similar benefit

Starting earlier this month, Connecticut employers began making payroll deductions for the state’s new family and medical leave program, which is scheduled to begin offering benefits next year. But even though this benefit will be available to most workers in the state, small businesses can still consider whether they can set up their own paid family leave program.

Family leave provided by an employer is a fairly rare benefit, available to only about one in five U.S. employees. However, the benefit has become a much sought-after perk among employees and job-seekers, giving businesses that offer it or are located in an area with a state program more of a competitive edge.

Small business owners might believe that they don’t have the financial capacity to offer family leave, but a cost-benefit analysis may prove them wrong. Employees use the benefit infrequently, and employers may be able to minimize the expenses of providing extended paid time off through strategies such as having other workers cover for an employee instead of hiring temporary workers. Family leave can also help with employee retention, and avoid the costs of recruiting, hiring, and training new workers.

Connecticut’s family and medical leave program, which applies to any company with at least one employee, provides up to 12 weeks of paid leave for personal or family care. It is funded through a 0.5 percent payroll deduction, although employers are not required to withhold this amount if they can show they offer a comparable benefit.

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