21 May 2018

The Case Against Mandating Maternity and Paternity Leave

In many ways the tech industry serves as the one to push the boundaries of the workplace. From in-office amenities, gym memberships, catered lunches, and a variety of other benefits the tech industry leads and others follow. The one benefit that seems to have the most traction at the moment is mandated maternity and paternity leave.

But there’s a point where constantly trying to push the bar eventually contradicts other pieces of advice often given to tech companies. The most common one, especially within the startup world, is to keep your burn rate low. This has been applied to both startups and individuals looking to bootstrap a startup.

The logic makes perfect sense. Whether you already have a startup or you’re in the process of building one, money will be tight and must be managed accordingly. Despite this advice there’s still a lot of momentum within the industry to not only mandate paid time off for new parents but also increase the amount of time off they’re given.

How do we expect the number of startups to increase and succeed when they’re told to keep burn rates low while also bordering on mandating such an expensive benefit? A mandate such as this essentially sets a price floor for burn rates. This is now a fixed cost taken on by a startup in a stage where they’re often trying to prove a market need for their business.

How often have we heard jokes saying that once a startup stops stocking their kitchen with coconut water and snacks the writing is on the wall? I’ve been there myself. When one of the first signs of money problems within a company are snacks, how much earlier would they have had to cut back with the possibility of paying an employee, full-time, for months off work?

One great aspect of technology is its increasing ability to allow anyone to create a business. The barriers to entry for entrepreneurs and small businesses should be as small as possible and tech enables this in many ways. While the intentions behind this effort are genuine, mandating yet another benefit is a step backwards.

Assuming the government doesn’t mandate this at a federal level I imagine that eventually this will be yet another way companies compete for talent. There are already a handful of companies with generous maternity and paternity leave policies even without government intervention.

Maybe there will be a compromise between employers and employees to provide a reduced paycheck while on leave. I’m not 100% sure and without government intervention, I’m sure many different ways of handling this stage in life will arise. But in an industry that advises on keeping burn rates low, how can we expect companies to follow that advice with such a large financial burden looming overhead?


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