Ikea Is Giving Its Employees Up To Four Months Of Paid Parental Leave

You'd be hard-pressed to find a plan this generous elsewhere in retail. At least in America.

The furniture giant Ikea is rolling out a paid parental leave plan that’s likely to be the envy of workers in the American retail space. According to Lars Petersson, the president of Ikea U.S., the guiding principle behind it is pretty simple.

“The home is our arena,” Petersson told The Huffington Post. “We think that it’s really important that people working for us get a chance to experience their home, especially when you’re welcoming a new family member.”

As of Jan. 1, 2017, all Ikea workers in the U.S. ― from corporate managers to store-level employees ― will be eligible to take three months of paid parental leave if they’ve worked a full year with the company. They’ll collect their full pay for the first six weeks, and 50 percent of their pay for the second six weeks.

If they’ve got three years at Ikea under their belt, the plan is even more generous. It offers four months of paid leave, with the first eight weeks coming with full pay, and the second eight at half pay. That comes on top of any short-term disability leave they may be eligible for.

The bottom line: With short-term disability factored in, Ikea employees will be able to spend up to six months away from work with their newborns, all without worrying about their paychecks for most of it. Until now, workers were given one week of paid leave on top of their short-term disability.

The company has 14,000 U.S. workers employed in all sorts of capacities ― driving trucks and working in its factory, behind cash registers, in call centers and corporate offices.

“The home is our arena. We think that it’s really important that people working for us get a chance to experience their home, especially when you’re welcoming a new family member.”

- Lars Petersson, the president of Ikea U.S.

Unlike other developed nations, the U.S. does not have a law guaranteeing at least some paid family leave for workers. The Family and Medical Leave Act, which was passed in 1993, only guarantees 12 weeks of unpaid time off. Without a federal mandate, offering paid leave is optional for U.S. employers.

And while it’s become more fashionable to offer paid leave, particularly in the tech sector, U.S. companies on the whole aren’t that generous with the benefit. According to the Bureau of Labor Statistics, only around 13 percent of U.S. workers in 2014 had access to paid time off when they had children, though that number has been trending upwards in recent years. Those who do have paid leave tend to be white-collar professionals, as opposed to blue-collar or hourly employees.

That puts the U.S. far behind countries like Sweden, where Ikea was founded. There, paid vacation and family leave are part of both the culture and the law. Petersson said he takes a full four weeks off in the summer ― “I take Swedish vacation; I work in America” ― and he doesn’t know many other U.S. executives who would do the same. He said Ikea wanted to make its paid leave program generous enough so that employees would actually use it.

“This is not so much to replicate anything we do in Europe,” Petersson said. “It’s just to take the values and culture ... and transform that into the U.S. reality.

Just as the program doesn’t discriminate between blue- and white-collar employees, it doesn’t discriminate between men or women, or gay or straight employees. The leave offer is gender-neutral, so paternity leave matches maternity leave, and employees who adopt or foster are guaranteed the same benefits as new biological parents. (Unlike the FMLA, the Ikea program will only cover time off to care for a new child, not to tend to a sick family member.)

Nabeela Ixtabalan, the company’s head of human resources in the U.S., said Ikea looked at research on paid leave programs in order to shape its own. For instance, the decision to offer the first half of the leave at full pay was influenced by a finding from a Boston College study on paternity leave. The vast majority of respondents in a survey said that they wouldn’t use the leave unless at least 70 percent of their salaries were paid.

“We looked at a lot of external research,” Ixtabalan said. “We asked what would people need to take it.”

The company is also introducing a sabbatical program to go with the paid leave. Employees who have seven years with the company can take off three months of unpaid time for any reason they wish, with their position guaranteed when they return. For those who have 11 years at the company, the sabbatical can be as long as six months, and for those with 15 years in, it can be a full year.

Ikea has been burnishing its reputation as a decent employer the last couple of years. In 2014, the company raised its company-wide minimum wage, but it did so in a novel way. Rather than set a national minimum, it set its wage floors store by store, tying each one to the local living wage as determined by the MIT living wage calculator. It has raised those minimums twice since then.

Petersson said the living wage initiative has worked out well so far, with the company able to withstand the higher labor costs, and employee turnover dropping. He said he frankly doesn’t know what to expect from the new paid leave program. When he was working for Ikea in Japan, he said workers took greater advantage of their leave benefits than expected when the company introduced them there.

“We don’t really know how many people [in the U.S.] will take this,” Petersson said. “We are very curious what will happen.”

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