Netflix’s Paid Parental Leave Policy Reflects a Sad Reality Facing Working Families
At the beginning of August, Netflix announced that it would grant its employees “unlimited” parental leave during the first year after a child’s birth or adoption. After the initial praise, though, a darker side of the announcement was revealed: only “salaried streaming employees”—the roughly 2,000 white-collar workers who work in the company’s streaming division—will be covered by the new policy. Employees of Netflix’s DVD distribution centers, meanwhile, will not receive the benefit of paid parental leave.
A few have asked whether or not Netflix’s paid parental leave policy will set a new standard in the American workplace. Unfortunately, the exclusion of its lower-paid workers from the policy already reflects a harsh reality facing U.S. workers: paid family leave is a rarity, and when it is offered, the recipients are much more likely to be high-wage earners.
As the figure above shows, only 12 percent of private sector workers in the United States receive paid family leave, a number that puts us behind our international peers. (Among the 34 OECD nations, for example, the United States is the only nation that does not mandate paid maternity leave.) Which workers receive paid family leave is heavily determined by how much they earn—just like Netflix’s policy. While 23 percent of workers at the top of the wage distribution have access to paid family leave, only 4 percent of workers at the bottom receive the benefit.
A much higher portion of workers are covered by unpaid leave as a result of the Family and Medical Leave Act of 1993 (FMLA), which grants 12 weeks of leave per year (26 weeks if the family member being cared for is a service member) to workers in companies with 50 or more employees, provided they have worked at least 1,250 hours at the company over the previous 12 months. Under the FMLA, 85 percent private-sector workers have access to unpaid family leave. Importantly, unpaid leave is a protection extended to a significant amount of low-wage workers in the private sector—three-fourths (75 percent) of workers at the bottom of the wage distribution receive unpaid family leave.
Though there is still a disparity between high- and low-earners who have access to unpaid leave (93 percent versus 75 percent), the FMLA shows that federal policy is an effective method of ensuring that a majority of workers have access to leave. However, unpaid leave is not enough: for many workers, taking unpaid time off means sacrificing necessary and vital income.
Taking time off to properly care for a new baby or to assist an ailing parent shouldn’t mean risking financial jeopardy and it shouldn’t be a luxury afforded only to high-earning workers. We need legislation that will provide workers across the wage distribution—not just those at the top—with paid family leave so that working people like the employees of Netflix’s DVD division don’t have to choose between taking care of their families and paying the bills.