IKEA announces generous parental leave policy for all workers

Only 12 percent of private-sector workers in the United States have access to paid parental leave through their employers. The scope of IKEA's plan, and its availability to lower-wage hourly workers, is especially rare.

The Sweden-based furniture company IKEA announced Monday that its 13,000 salaried and hourly workers in the US will see their parental leave benefits generously expanded, in some cases doubling to four months.

Starting Jan. 1, the leave benefit will apply to both mothers and fathers, and include adoptive and foster parents. Those who have worked for IKEA for more than one year will get three months of parental leave, with the first six weeks fully paid, and an additional six weeks paid at 50 percent of a worker's base wage. 

Those who have worked for IKEA for three or more years will get up to four months of paid leave, the company said. While on leave, these workers will earn 100 percent of their base wage for the first eight weeks and 50 percent for an additional eight weeks. This is on top of the six to eight weeks of paid disability leave the company offers to all workers, and IKEA’s move in 2015 to raise the average minimum hourly pay for its US workers to $11.47. This was a 10 percent bump in IKEA’s average hourly wage, and $4.62 above the federal minimum wage, as The Christian Science Monitor reported last year.

“Our co-workers are our most important resource, which is why we continue to invest in helping them reach their dream,” Lars Petersson, IKEA’s US president, said in Monday’s announcement.

IKEA’s move, particularly inclusion of part-time workers, is unusually generous among US companies, especially retailers that can easily replace their low-skilled workers. (IKEA’S home country of Sweden has some of the most progressive leave policies on the planet, with new parents eligible for 480 days – or about 15 months – of leave at 80 percent of their pay.)

In the US, unlike in the rest of the developed world, new mothers and fathers are not guaranteed any paid time off. The only other countries with no nationally guaranteed leave for parents of newborns are Suriname, Papua New Guinea, and several small Pacific island nations, according to World Policy Center, a nonprofit policy researcher.

So it’s up to US employers whether they want to offer the benefit or not. Paid family time is available only to about 12 percent of private-sector workers, according to the federal government, and the length of that paid time off varies widely. What's more, such benefits are mainly accessible to high-earning workers who need them least.

Without a federal policy, and uncertainty about the potential of a comprehensive one under the incoming administration, American workers are left to rely on the generosity of their employers. In the last couple of years, some companies have made great strides in the paid leave arena. Video-streaming service Netflix now offers unlimited time off to new parents during the first year of a child’s birth or adoption to its salaried workers, with a lower level of benefits available to hourly staff. Microsoft, Etsy, Adobe Systems, Hilton Hotels, and Chobani yogurt are among other companies that have recently expanded paid leave benefits for new parents.

States also are starting to implement parental leave policies locally, funding them through different mechanisms, including payroll taxes. New York State passed a new law this spring giving all new parents 12 weeks of partially paid leave. California, New Jersey, and Rhode Island have passed similar legislation. Washington, DC is considering a bill that would guarantee 11 weeks of paid family leave for new parents, plus eight weeks leave to care for a sick parent or grandparent.